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TMI Blog2023 (11) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... Agent Service. Thus, the activity undertaken by the appellant do not fall under the category of clearing and forwarding service. The impugned Commissioner (Appeal) s order is set aside as it has traveled beyond the charges elicited in the show cause notice and in the impugned Order-In-Original - appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... peal), who in his order No. VAD-EXCUS-001-App-322/14-15 dated 12.08.2014 and order-In-Appeal No. VAD/EXCUES001-AVV 514/2014 No. 15 dated 05/11/2014 has held that service provided by the appellant are more specifically classifiable under 'Business Auxiliary Service' as defined under Section 65(19) of Finance Act, 1994. 2. The Learned Advocate appearing for the appellant has submitted that as per the definition of Clearing Forwarding Agent Service they need to have a contract with the principles service recipient and generally such C & F Agents are engaged or appointed by manufacture of goods for distribution of goods. Whereas the appellant have not been appointed by any principle nor they are engaged for distribution of any goods. It has further been stated that for C & F agent's the main work is clearing forwarding where the appellant undertake the following work: "Negotiating Freight, with a Shipping Line or Air Line on long term basis and thereafter, negotiating with the Customers, the Appellants, quote their Freight Rate, to their Customers, whereas, the Shipping Line or Air Line, quotes its Freight Rate, to the Appellants and the Appellants, make payment of Freight, to the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice since in the appellants own case this tribunals wide order dated 15.12.2011 reported under 2012(26) S.T.R 443 Tribunal- Ahmedabad has held that the activity under taken by the appellant do not fall under the category of Clearing And Forwarding Agent Service. The relevant extract of the decision of this Tribunal in appellants own case is reproduce have below: "11. The factual matrix is not disputed. The appellant is engaged in various operations. It is also undisputed that one Shri GautamAdvani, Authorised Signatory of the appellant company had stated that they are engaged in facilitating above indicated work. It is also undisputed that the appellant had taken registration certificate as provider of CHA services albeit not having licence as CHA. On this factual matrix, we have to consider the submissions made by both sides regarding classification of the services of the appellant. 12. While holding that the appellant is providing services of clearing & forwarding agent, the adjudicating authority in Para 8.3.3 and 8.3.4 has held as under : "8.3.3. Considering the above specimen quotations, debit notes and statements which are valid and admitted by the assessees as true and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signment agent;" 13. It can be seen from the above reproduced paragraph that the adjudicating authority has considered the services rendered as clearing & forwarding services based upon the interpretation of the definition given Section 65(25) of Finance Act, 1994 holding that the appellant is providing services directly or indirectly connected with clearing & forwarding operation in the manner. 14. We are of the considered view that the adjudicating authority had incorrectly interpreted the definition which is defining the definition of clearing & forwarding operation. 15. It can be seen from the definition which is reproduced hereinabove in findings of adjudicating authority at Para 8.3.4, the said definition clearly indicated that services rendered by the person will fall under the category of clearing & forwarding operation if both the operations i.e. clearing & forwarding are undertaken by the person. 16. At this juncture, we would like to refer to C.B.E.&C. circular of 1997 which we may reproduce in its entirety. NOTIFICATION F. No. B.43/7/97-TRU Ministry of Finance Department of Revenue Tax Research Unit New Delhi, dated the 11th July, 1997 To All Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice tax liability shall be discharged by the person availing the service so rendered. In other words, the principal who engages a clearing and forwarding agent is the person responsible for collecting and paying the service tax to the exchequer, Commissioners of Central Excise may therefore take necessary action accordingly and also make this position clear by issue of suitable trade notice. 2.4 Further under the Finance Act, 1997 the value of taxable service rendered by a clearing and forwarding agent has been defined as the gross amount charged by such agents from the client for the services of clearing and forwarding operations in any manner. However, under service Tax rules it has been provided that the value of taxable service in relation to services rendered by clearing and forwarding agents to a client shall deemed to be the gross amount of remuneration or commission (by whatever name called) paid to such agent by the client engaging such agent (Notification No. 27/97-S.T. refers). 2.5 For the services rendered, the C&F agent receives commission or remuneration which usually consists of two components : (I) Minimum commission on a flat rate or turnover basis depending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or to any customer, shall be the gross amount charged by such operator from such customer for services in relation to the renting of a cab and include the rental so charged. Any other charges billed to the customer such as processing charges, administrative fees, charges for providing extra accessories or providing other value added services such as a provision of driver etc. shall also be includible in the gross amount chargeable to service tax. 3.5 However service tax will not be payable in cases where a bill has been raised on a Rent a Cab Scheme operator, by another rent-a-cab scheme operator who has sub-let the motor cab to the latter operator provided who pays service tax on the amount billed to his client for renting out the motor cab so obtained by him. 3.6 The Commissionerates of Central Excise may contact the jurisdictional State Transport. Authority who is the licensing authority under the rent-a-cab scheme, 1989 to identify and register the rent-a-cab scheme operators for the purposes of service tax. 4. GENERAL : 4.1 As per Section 69 of the Finance Act, 1994 read with rules 3 & 4 of the Service Tax Rules, 1994, every person responsible for collection of the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough the associations of trade immediately to apprise them about the provisions of law and procedures to be followed. 4.4 It has been decided that for all the Commissionerates, the concerned Commissioner having jurisdiction in central excise matters will have corresponding jurisdiction for service tax matters. This applies to Commissionerates in Mumbai and Calcutta as well. (Order No. 4/1/97-Service Tax (3) dated 11th July, 1997 refers). Yours faithfully, Sd/- (T.R. Rustagi) Tel : 3012687 17. It can be seen from the above circular that C.B.E.&C. had perceived the services rendered by clearing & forwarding agent will have to provide services as indicated in above circular. It can be seen that in the instant case, the appellant has not engaged himself in any of the category of work as indicated in above circular, it is very clear from the finding recorded by adjudicating authority and reproduced by us hereinabove. 18. Further, we find that C.B.E.&C., in their circular dated 24-4-02 have reiterated the said clarification issued by them in 1997. The said clarification dated 24-4-02, more specifically in Para 10 is reproduced below : "10. The matter has been examined. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... text and intention of legislature are the guiding principles. In that regard reliance may be placed on the judgment of Hon'ble the Supreme Court in the case of Mazagaon Dock Ltd. v. CIT (1958) 34 ITR 368. 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'. To say that if, one person has rendered service as 'forwarding agent' without rendering any service as 'clearing agent' and he be deemed to have rendered both services would amount to replacing the conjunctive 'and' by a disjunctive which is not possible. The counsel for the revenue has not been able to bring on record any material to show the word 'and' should be construed as disjunctive. He has not shown any 'trade practice' which may lead to a necessary inference that service of one kind rendered by one is invariably considered to comprise both. No argument has been advanced before us by him to canvass that the legislature intention is discernible from the scheme of the statute or from any other relevant mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rincipal or his agents, warehousing the goods, receiving despatch order from the principal, arranging despatch of goods as per the directions of the principal by engaging transport of his own or through the authorised transporters of the principal, maintaining records of the receipt and despatch of goods and the stock available at the warehouse. 65. In any case, the expression 'clearing and forwarding agent' is apparently conjunctive and not disjunctive. Only clearing activities would not attract service tax in the category of service of clearing and forwarding agent. Similarly only forwarding activity would also not attract tax in the category of service of clearing and forwarding agent. The service provider would necessarily have to be engaged in providing clearing and forwarding services in order to be taxable in the category of clearing and forwarding agent. 66. In Commissioner of Central Excise, Panchkula v. Kulcip Medicines Pvt. Ltd. reported in 2009 (14) S.T.R, 608 (P & H), the Punjab and Haryana High Court held that the expression "a Clearing & Forwarding Agent in relation to clearing and forwarding operations, in any manner", appearing in Section 65(104)(j) read with S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged for the purpose of clearing and forwarding operations, insist on procuring orders for the principal in the absence of any stipulation to that effect." 24. We find that the ld. Authorised Representative for the Department had been relying heavily on the judgment of Hon'ble High Court of Karnataka in the case of Mahavir Generics. We find that in the case of Mahavir Generics, the agreement between the principal and M/s. Mahavir Generics clearly indicated that M/s. Mahavir Generics will act as consignment agent of the principal and function as indicated in the contract. 25. Their Lordship have reproduced the entire agreement between the principal and M/s. Mahavir Generics wherein responsibility attributed to M/s. Mahavir Generics clearly indicated that they were functioning as 'consignment agent' which is covered under the inclusive definition of clearing & forwarding agent. In view of this reliance placed on said judgment will not carry the case of the Revenue any further. 26. In view of the foregoing, we are of the considered view that the impugned order which held that the appellant has been providing service of clearing & forwarding agent, are incorrect and is liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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