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TMI Blog2018 (9) TMI 833X X X X Extracts X X X X X X X X Extracts X X X X ..... d, therefore, both the questions are required to be answered in favour of the assessee against the department. It was held in the above mentioned cases that the activity of the appellant is only of forwarding and not clearing and forwarding, the only activity done by him is (a) providing labour for unloading of the goods at the rail heads, loading into the trucks for transport from rail-head to godown and unloading and stacking of the cement at the godown (b) arranging the dispatch of the goods as per the instructions and maintaining record of receipt and dispatch, and service tax not payable under Clearing and forwarding agent service. Appeal allowed - decided in favor of assessee. - D.B. Central/excise Appeal No. 48/2017 - - - Dated:- 9-5-2018 - MR K.S.JHAVERI AND MR VIJAY KUMAR VYAS, JJ. For The Appellant(s) : Mr. Priyesh Kasliwal For The Respondent(s) : Mr. Sandeep Pathak Judgment 1. By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal preferred by the assessee. 2. This court while admitting the appeal on 09.08.2017 framed the following substantial questions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, in any manner. Section 67 of the Finance Act, 1994 provides that the value of any taxable service shall be the gross amount charged by the service provider for such service rendered by him. 6. Thereafter, he has taken us to the conditions of the contract dated 18.06.1998 and transportation contract entered on 1.04.2005 which reads as under:- Further, you shall be responsible for maintaining all the records/registers, formats, and submission of daily/periodical report to us/ to our staff as per directions from time to time. You shall engage your own labour and other manpower as may be required to carry out all such operations and you shall be reimbursed loading and unloading charges as mentioned below: Unloading charges : Rs.7/- per MT Loading charges : Rs.7/- per MT Apart from the above, you shall be paid service charges as mentioned below as remuneration for the services rendered: Service charges : ₹ 7/- per MT Handling and storage: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble High Court of Punjab Haryana at Chandigarh in the case of Commissioner of Central Excise, Panchkula Vs. Kulcip Medicines(P) Ltd.-reported in 2009(14)S.T.R.-608 10. He contended that the Tribunal while considering the matter has wrongly decided against the appellant. 11. He has relied upon the circular F.No.137/04/2002-CX.4 dated 24.04.2002 where clause (10) provides as under:- The matter has been examined. Normally, a C F agent receives goods from the factories or premises of the Principal of his agents, stores these goods despatches these goods as per orders received from the Principal of owner, arranges transport, etc. for the purpose and prepares invoices on behalf of the Principal. For this service, the C F agents receives commissions on the basis of agreed terms. Therefore, an essential characteristic of any services, to fall in the category of C F agent, is that the relationship between the service provider and receiver should be in the nature of principal(owner) and agent. The C F agent carries out all activities in respect of goods right from stage of their clearances from the premises of the principal to its storage and delivery to the customers. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t his premises. After recording the aforesaid finding, the Tribunal proceeded to hold that once there is no clearing activity taken by the dealer therefore the service rendered by him would not satisfy the requirement of clearing and forwarding agent and consequently it set aside the demand. It also followed the earlier view taken by the Tribunal in the case Mahavir Generics v. Commissioner of Central Excise, Bangalore MANU/CE/0180/2004. It is appropriate to notice that in Mahavir Generics case, (supra) Delhi Bench of the Tribunal has taken the view that the agreement between the dealer and the company clearly showed that dealer was not acting as a clearing and forwarding agent then services rendered by the dealer could not be treated as one to a client by the clearing and forwarding agent in clearing and forwarding operations in any manner. Therefore the service cannot be taxed. The tax liability in relation to service tax as per the scheme of 1994 Act is attached to the taxable service. Consequently the Tribunal held that so long as the dealer is not providing taxable service he cannot be brought under the net of service tax. 11. The question which falls for consideration is w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Bhatt, that for an alloy steel to be considered as stainless steel, it will have to satisfy two conditions i.e. The alloy steel should be known in the trade as stainless steel and further, it should contain 11% chromium as a component of the allow steel. This is clear from the use of the word and . If the intention of the trade notice was to treat the two types of alloy steels as stainless steel, then it would have been made clear by using the word of instead of the word and . 12. We are further of the view that the circulars issued by the Board are binding and meant for adoption for the purposes of bringing uniformity. In that regard reliance may be placed on the judgments of Hon'ble the Supreme Court in the cases of Ranadey Micronutrients v. Collector of Central Excise MANU/SC/0025/1997 : 1996(87)ELT19(SC) and Paper Products Ltd. v. Commissioner of Central Excise MANU/SC/0511/1999 : 1999ECR284(SC) . If the aforesaid principle is applied to the facts of the present case there does not remain any doubt that the circular issued by the Board is to be considered as binding and cannot be deviated even by the department. On that account also the expression 'clearing and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t does not cease to be otherwise a part of the orchestra. While forming this view, we have certainly not overlooked the fact that while music can be sometimes taxing, a tax can never be musical. 32. While arriving at this conclusion, we also go by the trade understanding based on sheer common sense, which is often uncommon. Because a buyer buys only rice and not wheat in a grocery shop, which claims to sell wheat and rice , the shop cannot cease to be a shop selling wheat and rice . In the same-way, rendering only forwarding service cannot make the appellant ceases to be Clearing and Forwarding Agent , so as to save him from the tax. Some customers may want only clearing operations, while some forwarding, and others both. The expression clearing and forwarding operations is a compendious expression of nature of services offered any of which will bring the service providers in the tax net of this category. Moreover, in the process of forwarding operations-clearance stages may arise such as at octroi posts or subsequent transits. 33. We, do agree that it is the context in which the word and is positioned, being sandwiched between the words clearing and forward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operations at all, that they only provide labour for unloading of the cement at the rail heads, loading into the trucks for transportation to the storage godown of M/s Binani Cement and thereafter unloading at the godown and its stacking and thereafter arranging the dispatch of the cement as per the directions of M/s Binani Cement, that they also maintained a record of the receipt and dispatch, that the activity of the appellant is only of forwarding and not clearing and forwarding and, hence, the same is not taxable, that Larger Bench judgment of the Tribunal in the case of Medpro Pharma Pvt. Ltd. vs. CCE, Chennai (supra) has been overruled by Honble Punjab Haryana High Court in the case of CCE, Panchkula vs. Kulcip Medicines (P) Ltd. reported in 2009 (14) S.T.R. 608 (P H), wherein it was held that the word and used after the word clearing but before the word forwarding in Section 65 (105) (j) of the Finance Act, 1994 has to be understood in conjunctive sense and that for attracting service tax under Section 65 (105) (j) readwith Section 65 (25) a person must engage both in clearing as well as forwarding activity and that in view of this, the impugned order, which is based on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 principal, maintaining records of the receipt and dispatch of the goods and the stock available on the warehouses and preparing invoices on behalf of the principal. The larger Bench rightly enumerated these activities which the C F Agent is supposed to perform. 12. On the facts of the present case, we find that none of the aforesaid activities are performed by the Appellant. There is no role of the Appellant in getting the coal cleared from the collieries/supplier of the coal. Movement of the coal is under the contract of sale between the coal company and Ambuja companies. Even the coal is loaded on to the railway wagons by the coal company. The goods are not under any legal detention from which they need to be freed by the Appellant. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n these circumstances, the decision of the Hon'ble P H High Court in Kulcip Medicines case prevails and have to be followed by all other subordinate authorities. The reliance placed by the Revenue on the Mahaveer Generics case does not help because it dealt with the case of a consignment agent which was included specifically in the definition of a C F agent. Those are not the facts obtaining in the present case. 17. He therefore, contended that the view taken by the Tribunal is required to be reversed. 18. Counsel for the respondent Mr. Sandeep Pathak contended that the view taken by the Tribunal is just and proper in view of the observations made by the Original Authority which reads as under:- 19. I have carefully gone through the case records, personal hearing as well as reply to the Show Cause Notice and the Ruling prevailing on the subject issue. The assessee at the outset denied of having entered into any contract dated 18.06.98 and 01.06.2001 as the dump was not in existence and the said contracts were not signed by any of the parties. I find that Sh. Madhu Sudan Agrawal was issued summon on 20.10.2005to appear on 24.07.05 with some records but he fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service is also defined under Section 65(105)j), which means any service provided to a client by a C F Agent in relation to C F operation. in any manner i.e. the service provided in the case is the service of loading unloading services being handling agent of M/s Binani Cement Ltd.. For this purpose, the value of taxable service will be the gross amount charged by M/s Shreenath Roadways for such service (loading/unloading) rendered. Because normally a C F agent receives goods from the factories or premises of the Principal or his ağents, stores these goods, despatches these goods as per orders received from the Principal or owner, arranges transport, etc for the purpose and prepares invoices on behalf of the Principal. For this service, the C F agent receives commission on the basis of agreed terms. Therefore, an essential characteristic of any services, to fall in the category of C F agent, is that the relationship between the service provider and receiver should be in the nature of principal (owner) and agent. The C F agent carries out all activities in respect of goods right from stage of clearances from the premises of the principal to its storage and delivery to the custo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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