Customs, Excise and Gold Tribunal - Calcutta
Coal Handlers Pvt. Ltd. vs Commissioner Of Central Excise on 24 May, 2004
Equivalent citations: 2004(171)ELT191(TRI-KOLKATA), 2006[3]S.T.R.286, [2007]6STT513
ORDER Archana Wadhwa, Member (J)
1. As per facts on records, appellants were given a Service Tax Registration Certificate on 18-11-99 as Clearing and Forwarding Agents. However, the appellants subsequently surrendered Sales Registration Certificate on 30-5-2000 on the ground that the services rendered by them was not covered by the definition of C&F Agent under Service Tax statute. The above contention of the appellant has not been accepted by the authorities below. Hence the present appeal.
2. Dr. Devi Pal, learned Sr. Advocate has appeared on behalf of the appellant and has submitted that as per the agreement entered into by the appellant with M/s. Gujrat Ambuja Cement Ltd. and M/s. Ambuja Cement Eastern Ltd., the services being provided by the appellant include, inter alia as under :
(i) obtaining consent to load the coal rakes from coal companies on behalf of Gujarat Ambuja Cement Ltd. and Ambuja Cement Eastern Ltd.
(ii) obtaining sanction from the office of Executive Director - Rail Movement, Calcutta for movement of coal to Gujarat Ambuja Cement Ltd. and Ambuja Cement Eastern Ltd.
(iii) Supervising the loading of wagons at the collieries having regard to the proper quality and quantities, sending sample to Gujarat Ambuja Cement Ltd. and Ambuja Cement Eastern Ltd.'s laboratory for the purpose of analysis of coal, and
(iv) Complying with formalities relating to payments for freight as per the procedure required by Gujarat Ambuja Cement Ltd. and Ambuja Cement Eastern Ltd., reporting of certain information as required by Gujarat Ambuja Cement Ltd. and Ambuja Cement Eastern Ltd.
From the above, learned advocate has contended that the petitioner companies are rendering services only for facilitating the movement of the coal to the cement company and does not enter into any contract for purchase of coal on behalf of the principal company. As such, they cannot be treated as Clearing and Forwarding Agent within the meaning of Section 65(25) of the Finance Act of 1994.
3. Dr. Devi Pal has, however, fairly submitted that the Tribunal in the case of Prabhat Zarda Factory (India) Ltd, v. Commissioner of Central Excise, Patna, 2002 (145) E.L.T. 222, considered the definition of clearing and forwarding agent and has held that such definition was very wide and includes any services, even provided indirectly. Further, learned advocate submits that the said judgment was delivered on 9-2-2002 and thereafter the Finance Act of 2003 was introduced and the new service viz. 'Business Auxiliary Service' appearing in Section 65(19) was introduced. The said service is in relation to promotion or marketing or sale of goods produced or provided by or belonging to the client; promotion or marketing of service provided by the client; any customer care service provided on behalf of the client and any incidental or auxiliary support service such as billing, collection or recovery of cheques, accounts and remittance, evaluation of prospective customer and public relation services, and includes services as a commission agent. As such, he submits that the activities undertaken by the appellant are covered by the expression 'Business Auxiliary Service, which include Commission Agents and stand exempted from Service tax w.e.f. 1st of July, 2003 vide Notification No. 13/2003, dated 20-6-2003. In view of the foregoing he submits that the appellant's services cannot be considered as C&F Agents.
4. Shri T.K. Kar, learned SDR, appearing on behalf of the Revenue and submits that the services being provided by the appellant have already been held to be as falling under the category of Clearing and Forwarding Agents by the Tribunals in the case of Prabhat Zarda factory (India) Ltd. As such, the appellants do not have any merits and the appeal is required to be dismissed.
5. The appellants have agreed that the issue involved stands decided in the case of Prabhat Zarda Factory (India) Ltd. (supra). The Tribunal under the said judgment has observed that as per definition of clearing and forwarding agent, he is a person who is engaged for providing any service, either directly or indirectly connected with clearing and forwarding operations in any manner to any other person and includes a commission agent. The use of the expression "any" and "indirectly" in the said definition of clearing and forwarding agent, is indicative of the fact that the scope of the services to be provided by clearing and forwarding agent is quite wide. He is not only the person who is actually dealing with the goods, which has to be termed as clearing and forwarding agent, but even if the services are indirect and if the same are connected with the clearing and forwarding operations in any manner of the other persons, he would be covered within the scope of the said definition. The appellants in the instant case render their services in all the sections of pre load of the coal rakes i.e. obtaining consent on behalf of their customers, sanctions from the office of Executive Director - Rail Movement, supervising loading of the wagons, sending samples and assuring the proper quality and quantities, complying with the formalities relating to payments for freight. As such, it is quite clear that the appellant is covered by the definition of clearing and forwarding agent, as interpretated by the Tribunal in the above referred case of Prabhat Zarda.
6. The appellants have alternative contention that they are covered by the new i.e. Business Auxiliary Service' introduced vide Finance Act of 2003. However, we find that the said services are in the nature of promotional or marketing of the customers goods or in the nature of doing the other routine type of jobs like billing or collection of cheques, maintenance of accounts and evaluation of prospective customers and public relation services. The services being provided by the appellant cannot be equated to the above. It is also seen that the expression 'commission agent' has been explained by the Notification dated 20th June, 2003 reported in 155 E.L.T. N-171 [No. 13/2003-S.T.], vide Paragraph 2.1.3 it has been clarified that C & F agents work on commission basis do not fall under the definition of 'Business Auxiliary Service', in as much as they are substantially covered within the definition of C & F services. It has, further, been clarified that under Section 65A of Finance Act, 1994, it has also been provided that in case of overlap, a service would be classified under the head, (a) which provides most specific description, (b) in case of a composite service having combination of different taxable services, the service which give them their essential character and (c) in case the test of (a) and (b) does not resolve, the service which comes earlier in the clauses of Section 65, i.e. the service that was subjected to service tax earlier, Since Insurance services and C & F Services are more specific description and were also subjected to service tax prior to imposition of tax on business auxiliary service, the insurance agents, C & F agents working on commission basis would fall under those respective categories. From this, it follows that a particular service can be taxed only under one head of service.
7. In view of the foregoing we do not find any merits in the appeal and reject the same.