Customs, Excise and Gold Tribunal - Delhi
Dina Iron And Steel Ltd. vs Commissioner Of C. Ex. on 9 February, 2007
Equivalent citations: [2007]10STT6
ORDER M.V. Ravindran, Member (J)
1. This appeal is directed against order-in-appeal dated 25-2-2005. The issue involved in this appeal is regarding the taxability of the services rendered by the appellant. It is the contention of the revenue that the appellant was providing services of C&F Agent. This contention is borne out from the order-in-original based upon the evidences as income from commission in the balance sheet.
2. Heard both sides and considered the submissions made by them. On perusal of the record, it is seen that adjudicating authority has come to the conclusion that the appellant has provided the services of C&F Agent on the following findings:
Contrary, in the instant case there are sufficient documentary evidence such as balance sheet etc., that leads to the conclusion that the notice company have earned commission as middle man for providing services in between principal and procurer and vice versa which is well within the ambit of "Clearing & Forwarding Agent".
It can be seen from the above reproduced part of finding, that the evidence very clearly indicates that the appellant was earning commission as middle man for providing services in between principal and procurer.
3. Ld. DR earnestly defending the order brought to our notice clause No. 8 of the agreement. The said clause read as under:
Once the order is received, DISL shall have to carry our all the coordination activities with customer, co-ordination with Air/Transport/ Railways for delivery of goods to customers etc. DISL shall provide all the assistance required by the customer for the company's electronic energy meters and its proper functioning.
On perusal of the clause, it can be seen that the services which were sought to be provided by the appellant does not get covered under the category of C&F Agent. It can be seen that the appellant is supposed to coordinate the activities with the customer. It is not brought out anywhere in the agreement that the appellant is supposed to carry out the all the normal activities of the C&F Agent. On the work related to C&F Agent the Central Excise Trade Notice No. 87/97 dated 14-7-1997 clarified as under:
Clearing and forwarding agent has been defined as any person who is engaged in providing any service, either directly or indirectly, connected with clearing and forwarding operations in any manner to any other person and includes a consigning agent. The taxable service has been defined as any service provided to a client, by C&F agent in relation to clearing and forwarding operations in any manner. The clearing and forwarding agents are engaged/appointed by manufacturer of goods (both excisable and non-excisable goods), producers and distributors of goods and shall also include such agents appointed for agricultural and mineral goods.
Normally, there is a contract between the principal and the clearing and forwarding agent detailing the terms and conditions and also indicating the commission or remuneration to which the C&F agent is entitled. A clearing and forwarding agent normally undertakes the following:
(a) Receiving the goods from the factories or premises of the principal or his agents;
(b) Warehousing these goods;
(c) Receiving despatch orders from the principal;
(d) Arranging despatch 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 despatch of goods and the stock available at the warehouse;
(f) Preparing invoices on behalf of the principal.
4. It can be seen that the revenue was of the impression that the service which can be covered under Clearing & Forwarding Agent would normally involve all the abovementioned activities. From the agreement which has been produced before us, we find that the appellant is not engaged in providing the services as contemplated by the above Trade Notice.
5. Further both the lower authorities had confirmed the demand, relying upon the order of the Tribunal in the case of Prabhat Zarda Factory (P) Ltd. v. CCE reported at . This very same decision was overruled by the Larger Bench of the Tribunal in the case of Larsen & Toubro Ltd. v. CCE, Chennai as reported at 2006 (3) S.T.R. 321. Accordingly, the decision on which the lower authorities relied to confirm the demand, having been overruled by the Larger Bench, the appeal of the appellant succeeds.
6. The appeal is allowed with consequential relief, if any.
(Order dictated in the open Court)