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TMI Blog2023 (9) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... c concept of clearing and forwarding into divisible activities is not possible due to presence of word and in between clearing and forwarding - however the said findings have been overturned by the High Court of Punjab and Haryana while deciding the appeal of Revenue in the case of COMMISSIONER OF CENTRAL EXCISE, PANCHKULA VERSUS M/S KULCIP MEDICINES (P) LTD. [ 2009 (2) TMI 89 - PUNJAB AND HARYANA HIGH COURT] , where while interpreting the definition of Clearing and Forwarding Agent Service it was held that taxable service has been defined to mean any service provided or to be provided to a client by a clearing and forwarding agent in relation to clearing and forwarding operations in any manner . If the clearing operations are separated from forwarding operation, the levy of tax would not be attracted as it only involves one of the two activities. This decision though has taken a contrary view than decision in Medpro Pharma Pvt. Ltd. in the sense that clearing forwarding can be segregated. However, the rationale of the Kulcip Medicines (P) Ltd. decision still is that if clearing forwarding both the operations are undertaken by only one person, the activity shall be cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C F Agent s liability for providing clearing Forwarding Agent Service. The impugned order of Commissioner (Appeals) set aside - appeal of Revenue allowed. - HON BLE DR. RACHNA GUPTA , MEMBER ( JUDICIAL ) And HON BLE MRS. HEMAMBIKA R. PRIYA , MEMBER ( TECHNICAL ) Shri Harshvardhan , Authorized Representative for the Department Shri Krishan Garg , Chartered Accountant for the Respondent ORDER DR. RACHNA GUPTA The department has filed the impugned appeal pursuant to Review Cum Authorization Order No. 115/2018-19 dated 08.10.2018, wherein, it has been opined that the order passed by the Commissioner (Appeals) is not legal and proper. The facts leading to impugned appeal are as follows: Assessee-respondent is engaged in providing Clearing and Forwarding Agents Services C F Service and has been registered for the same. During the course of audit of their record for the period from 2011-12 to 2014-15, it was observed that while discharging the tax liability of C F Agent Service, the assessee-respondent has not included the freight value received by him in the taxable value account. Resultantly, it was found that assessee-respondent has sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viding separate set of circumstances is wrongly considered as a valid reason for not considering the freight value in the taxable value of Clearing and Forwarding Agent Service. Learned DR has relied upon the relevant definitions, the applicable circulars and the following case laws with the prayer that order under challenge be set aside and department s appeal be allowed: (i) Medpro Pharma Pvt. Ltd. Vs. Commissioner of C. Ex., Chennai reported as 2006 (3) S.T.R. 355 (Tri. LB.) (ii) Commissioner of C. Ex., Panchkula Vs. Kulcip Medicines (P) Ltd. reported as 2009 (14) S.T.R. 608 (P H) (iii) Commissioner Vs. Kulcip Medicines (P) Ltd. reported as 2012 (25) S.T.R. J127 (S.C.) (iv) M/s. Synergy Baxi Logistics Pvt Ltd Vs. Commissioner of Central Excise, Jaipur-I reported as 2019 (11) TMI 1166 CESTAT New Delhi (v) M/s. Gunesh India Pvt Limited Vs. Commissioner, Central Excise Central Goods, Service Tax, Jaipur-I reported as 2022 (5) TMI 1042-CESTAT New Delhi (vi) Jai Jawan Coal Carriers Pvt. Ltd. Vs. Commr. of S.T., New Delhi reported as 2015 (37) S.T.R. 509 (Tri.-Del.) (vii) Singh Trading Company Vs. Commissioner of Central Excise, Bhopal rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (d) Arranging dispatch of goods as per the directions of the principal by engaging transport on his own or through the authorized transporters of the principal; (e) Maintaining records of the receipt and dispatch of goods and the stock available at the warehouse; (f) Preparing invoices on behalf of the principal. A perusal of the definition above when read in light of the said trade notice makes it clear that, in order to attract the levy, the above mentioned activities with similar other services in relation to clearing forwarding operation constitute the C F Service. A Circular of the Board also may be read: 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 carried out all activities in respect of the goods right from stage of their clearances from the premises of the principal to its storage and delivery to the customers. The above Para in the circular makes it clear that when a C F agent carries out both clearing and forwarding, the levy will be attracted. 8. Now we need to look into t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions in any manner . If the clearing operations are separated from forwarding operation, the levy of tax would not be attracted as it only involves one of the two activities. It was also held that by necessary intendment the expression a clearing and forwarding agent in relation to clearing and forwarding operations, in any manner contemplates only one person rendering service as clearing and forwarding agent in relation to clearing and forwarding operations . 12. This decision though has taken a contrary view than decision in Medpro Pharma Pvt. Ltd. (supra) in the sense that clearing forwarding can be segregated. However, the rationale of the Kulcip Medicines (P) Ltd. (supra) decision still is that if clearing forwarding both the operations are undertaken by only one person, the activity shall be clearing forwarding agent service only. The outcome of this decision therefore is that if one person has rendered service as forwarding agent and also the service as clearing agent then he be deemed to have rendered both services would amount to replacing the conjunctive and by a disjunctive which is not possible. The SLP filed by the assessee against the said decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause 48 of this agreement addresses the carrier i.e. the respondent as C F agent, who is not allowed to part with the consignment, in any case, without the acknowledgement of the receipt of goods by the stockist. We also observe that the agreement is absolutely silent about issuance of consignment notes and admittedly respondent is not registered as Goods Transport Agency. These observations are sufficient for us to hold that even if respondent is rendering transportation service under a separate contract but said service rendered by him cannot be called as Goods Transport Service. (ii) The second agreement dated 19.04.2012 between M/s. Dabur India Limited and the respondent is about undertaking the business of clearing, storing and forwarding of company s goods as C F agent of the company for State of Madhya Pradesh. We observe from clause 1 that C F shall transfer stocks to any of the company stockiest/super stockiest or C F agent located all over India. As per clause 2 of the agreement, appellant as C F agent is allowed to use the warehouse/godowns of M/s. Dabur India Limited to receive and stock the goods therein to consign its goods from time to time, as per requir ..... 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