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TMI Blog2009 (5) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... 51, 52, 112/05 and ST/182/07 - 693-698/2009 - Dated:- 28-5-2009 - Ms. Jyoti Balasundaram, Vice President and Shri P. Karthikeyan, Member (Technical) (Final Order Nos. 693-698/2009 and Misc. Order No. M/320/2009 dt. 28.5.2009 certified on 22.6.2009 in S/CO/03/2005 and Appeal Nos. ST/53/2004, ST/40, 51, 52, 112/2005 and ST/182/2007) Shri K.S. Venkatagiri, Adv. for Appellants. Shri V.V. Hariharan, JCDR for Respondent. Per Jyoti Balasundaram: The appellants herein are manufactures of "Fenner brand" rubber belts, oil seals and moulded products. M/s. BMF Belting Ltd., a subsidiary of the appellant manufacture "Fenner" brand rubber products under a licence agreement using the know-how of Fenner in their Patancheru unit. Goods manufactured by BMF are sold through a marketing and distribution network/ depots of the appellants and the facilities of the appellants are shared by the holding and subsidiary companies for marketing the products. Both BMF Belting and Fenner dispatch the goods from their respective factories to the depots/marketing network/distribution network of the appellants. Selling/distribution agreement was entered into between the appellants and BMF o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o FIL as per Clause 10(a) above and after deducting any other statutory deductions, if applicable. 11. BMF and/or FIL shall notify promptly every time it comes to us notice sales of subject matter are being made in the territory by persons except purchasers/dealers from FIL and at the expenditure of BMF, BMF or FIL shall take all such steps including litigation as are necessary to prevent spurious sales or as it considers reasonable to protect the rights of the parties to the agreement. 12. … …. … 13. Either party may at any time by written notice terminate this agreement or suspend its performance immediately without liability for compensation or damage if any. 14. The agreement shall terminate automatically if BMF is guilty of any Act which brings FIL into disrepute or which in the reasonable opinion of FIL is prejudicial to its interest. 15. On termination BMF shall pay FIL any outstanding amounts due to the latter at the date of termination. 16. … …. … 17. … … … 18. On the termination of this agreement for any reason, FIL shall return all unsold goods to BMF and render accounts and settle the same from the date of last settlement till the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otices for subsequent periods were issued and adjudicated by confirming demand of service tax raised therein, holding that the appellants had provided C F services to BMF. A notice dated 23.09.2004 was once again issued for the tax amount dropped in Order-in-Original dated 11.10.2004 by restricting demand to a value of Rs.1,77,55,356/- Appeal against this order was also rejected and against all the orders the assessees have come in appeal before the Tribunal. The period of dispute ranges from 01.09.1999 to 31.08.2004. 6. We have heard both sides. 7. The case of the department is based on the following:- (a) The appellant provided services in the capacity of clearing and forwarding agent. (b) The purpose of the agreement is for utilisation of the facility of distribution system and marketing outlet of the appellants on payment of expenses towards distribution and handling/incidental expenses. (c) The payments received by Fenner are only in respect of services rendered by them to BMF in selling products by way of allowing them to utilize their established distribution system and marketing outlet. (d) BMF was to supply goods to places and warehouses as directed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder:- "The question which falls for consideration is whether word 'and' used after the word 'clearing' but before the word 'forwarding' at two places in clause (j) be considered in a conjunctive sense or dis-injunctive sense. It appears to be fairly well settled that the context and intention of legislature are the guiding principles. In that regard reliance may be placed on the judgement 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 ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been accepted by the Revenue as no appeal has been filed. Moreover, we are not able to persuade ourselves to accept the view taken by the larger Bench of the Tribunal in the case of Medpro Pharma Pvt. Ltd. We have not been able to understand with utmost respect to the Tribunal as to what is 'Orchestrated nature of work' involved in the present transaction. The dealer in the present case as per the arrangements reached between the parties has to receive goods which are already got 'cleared' by the manufacturer. The dealer is to store those goods and forward to the buyer of the goods as per direction received. In that regard, the findings of the Tribunal in the instant case is patently clear when it observed as under in para 6: "It is clear from the terms of the agreement that appellant herein does not attend to the clearing of the medicines manufactured by Cipla. Consignments of medicines are cleared from the factory by the manufacturer and delivered to the appellant at his premises, In this factual situation, it has to be held that there is no clearing by the appellant and for that reason, the service rendered by the appellant does not satisfy the requirement of clearing and fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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