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TMI Blog2017 (12) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... al are that the assessee was engaged in the manufacture of craft paper and also providing certain services. The dispute in the present appeal arises with respect to certain contracts entered into by the assessee, amongst others with Rampur Distillery and Holosticks India Pvt. Ltd. being in the nature of commission agency contracts also involving, in some parts, supervision of transportation of goods in certain circumstances. The terms of contracts as extracted by the Tribunal in the impugned order are quoted herein below:- "8. As regards, the services provided to the two customers, we find that in respect of Rampur Distilleries, the appellants have been appointed as commission agent from 01.09.1999 by an appointment letter and the same arrangement was continued by another letter dated 10.07.2000. The relevant clause in both the appointment letters read as under:- 1. Products: Product means Extra-Neutral Alcohol (ENA) as Rectified Spirit of the specification set out here to as amended from time-to-time by Rampur Distillery at it sole and absolute discretion and such other product as may be agreed upon time-to-time. 2. Appointment " Rampur Distillery hereby appoint Tehri Pulp & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LERY. 3.1 The Representative shall determine that the transport is transporting the goods from RAMPUR DISTILLERY's factory at Rampur or such other place of dispatch as RAMPUR DISTILLERY may intimate from time to time to the REPRESENTATIVE. 3.2 In case of any disturbance in the dispatch of goods due to any inability of REPRESENTATIVE's part to affect the transportation, the representative shall inform the customer. 3.3. The Representative shall keep track of and co-ordinate the dispatches once the goods leave the factory of RAMPUR DISTILLERY until the time the goods reach the customer. 3.4 The representative shall not do any act, deed or thing or omit to do any act, deed of thing which may prejudicially affect the reputation or credit of RAMPUR DISTILLERY, or which may infringe upon any law or rule framed there under, or any local order passed by any duty constituted Authority in this behalf. 3.5 The Representative. i) Shall co-ordinate the dispatches from RAMPUR DISTILLERY's factory in such a manner that the dispatches in one region are dispatched at the same time in order to enable RAMPUR DISTILLERY to consolidate its dispatches and effect economies in tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall not do any act, deed or thing or omit to do any act, deed or thing which may prejudicially affect the reputation or credit of HIL, or which may infringe upon any law or rule framed behalf. 3.3 The Commission Agent shall not vary the terms of payments for the supplies made, without the prior consent of HIL. The payments shall be made in such manner as may be specified by HIL from time to time whether by means as HIL, may specify in this behalf. HIL reserves the right to specify different terms and conditions for different customers. 3.4 It is understood that the schedules given by the Commission Agent on behalf of the customers shall be subject to the confirmation by HIL. HIL will not accept any liability for schedules placed by the Commission Agent which have not been confirmed by HIL. 4.1 In consideration of the services rendered by the Commission Agent under this agreement HIL shall pay to the Commission Agent a commission, to be notified from time to time, on the sale of the product made by the Commission Agent. The commission may be reimbursed from time to time at the sole discretion of HIL. HIL reserves the right to vary the commission from time to time as mutually ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the said activities taken together lead to the conclusion that the assessee was providing 'clearing and forwarding service' as defined under the Act. Responding to the aforesaid submission, learned counsel for the assessee submits, the issue what constitutes 'clearing and forwarding service' for the purpose of the Act is no longer res integra. The said issue has been specifically dealt with and decided by the Supreme Court in the case of Coal Handlers Pvt. Ltd. Vs. CCE reported in 2015 (38) STR 897 (SC) wherein the Supreme Court has specifically dealt with the issue in the following terms:- "9. Significantly, the Revenue accepted the aforesaid decision in the case of Larsen & Toubro (supra) and did not file any appeal there against. Even otherwise, we find that the Larger Bench of the Tribunal in the said case has rightly interpreted the definition of 'clearing and forwarding agent' contained in Section 65(25) of the Act. Notwithstanding the aforesaid dicta of the Larger Bench, learned Senior Counsel appearing for the Revenue submitted that judgment in Prabhat Zarda (supra) has not been overruled entirely, as is clear from the reading of para 11 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract sometimes as one and sometimes as the other. The fact that a person describes himself as a forwarding agent is not conclusive: and it is a question of fact to be decided according to the circumstances of each case whether a person, normally carrying on business as a forwarding agent contracts solely as agent so as to establish a direct contractual link between his customer and a carrier (or possibly with several carriers, each undertaking a different part of the transit), or whether he contracts as principal to carry the goods, the customer appreciating that he will perform the contract vicariously through the employment of sub-contractors. The nature of the carriage, the language used by the parties in describing the role of the person concerned, and any course of dealing between the parties will be relevant factors. Persons property described as shipping and forwarding agents frequently act as carries themselves with respect to part of the carriage, for example, by performing collection and delivery services between the customers' premises, their own depots, and warehouses, docks and carriers' depots. In such cases they would have the rights and duties of carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s found that such a person is providing the services which are connected with the clearing and forwarding operations, then whether such services are provided directly or indirectly would be of no significance and such a person would be covered by the definition. Therefore, we have to see as to what would constitute clearing and forwarding operations. As is clear from the plain meaning of the aforesaid expression, it would cover those activities which pertain to clearing of the goods and thereafter forwarding those goods to a particular destination, at the instance and on the directions of the principal. In the context of these appeals, it would essentially include getting the coal cleared as an agent on behalf of the principal from the supplier of the coal (which would mean collieries in the present case) and thereafter dispatching/forwarding the said coal to different destinations as per the instructions of the principal. In the process, it may include warehousing of the goods so cleared, receiving dispatch orders from the principal, arranging dispatch of the goods as per the instructions of the principal by engaging transport on his own or through the transporters of the principa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice', under Section 65(19) of the Act w.e.f. 01.09.2009. The Judicial Member further found that the assessee had not rendered any service in respect of receiving goods or warehousing those goods or receiving the dispatch order from the principal or arrangement and dispatch of goods as per the direction of the principal or maintaining records of receipt and dispatch of goods or preparing invoices on behalf of the principal. Having recorded this finding of fact the Judicial Member of the Tribunal has decided in the appeal by following the larger bench decision of that Tribunal in the case of Larsen & Toubro Ltd. (supra) to conclude that the service provided by the assessee was not the 'clearing and forwarding' service. Upon difference of opinion, the Third Member further held that the revenue did not lead any evidence to show that the appellant had received other consideration except for commission for procurement of orders. The Technical Member who had differed from the Judicial Member amongst others, has reasoned as below:- "23. From the agreements and from the statements of Shri Virendra Singh, it emerges that the appellant has performed/has bound themselves to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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