Custom, Excise & Service Tax Tribunal
Cce, Kanpur vs M/S.Shivangi Steel Pvt.Ltd on 15 September, 2011
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
DIVISION BENCH
Service Tax Appeal No.628 of 2010
(Arising out of Order-in-Appeal No.272-ST/APPL/KNP/2007 dated 31.7.07 passed by the CCE(A),Kanpur)
Date of Hearing: 24.08.2011
Date of Decision: 15.09.2011
For approval and signature:
Honble Mrs.Archana Wadhwa, Member (Judicial)
Honble Mr.Mathew John, Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
CCE, Kanpur Appellant
Vs.
M/s.Shivangi Steel Pvt.Ltd. Respondent
Present for the Appellant: Shri Sunil Kumar, SDR
Present for the Respondent: Shri Mayank Garg, Advocate
Coram: Honble Mrs.Archana Wadhwa, Member (Judicial)
Honble Mr.Mathew John, Member (Technical)
ORDER NO._______________
PER: ARCHANA WADHWA
The short issue involved in the present appeal of Revenue is as to whether the activity of procuring of orders for the principal on commission basis would get covered under the category of C & F agents service so as to make the said activity liable to service tax.
2. The Commissioner(Appeals) while dealing with the said contention, has held that the appellants are only procuring orders, on commission basis, they cannot be held to be clearing and forwarding agents, which has a specific connotation in the context of moving of goods from the supplier to their destination. He has observed that in fact, the activity of the appellants gets completed even before beginning of the C&F operations, the activities of procuring orders is independent of clearing and forwarding operations and the appellants cannot be held to have provided the said services.
3. As against above, the Revenue in their memo of appeal have contended that the definition of clearing and forwarding agents, as provided under section 65 (25) of Finance Act, 1994 refers to any person who is engaged in providing any service, either directly or indirectly connected with clearing and forwarding operation in any manner to any other person including a consignment agent. The consignment agent acts as and intermediary between the seller and the purchaser by receiving the order/goods from the seller and then transmitting the goods to the purchaser. He received a commission from either party for the service so rendered and has to be treated clearing and forwarding agent service.
5. We find that the issue no more res integra and stands settled by the larger bench of the Tribunal in the case of Larsen & Toubro Ltd. vs. CCE, Chennai reported in 2006 (3) STR 321. By taking note of the Boards circular and Trade Notice No.87/97 10/ST/97 dated 14.7.97 which clarifies the scope of clearing and forwarding agent, it stands held that mere procurement of orders on commission basis and not entrusted the work of clearing and forwarding of the goods would not get covered under the said category. The Larger Bench thus differed with the earlier decision of the Tribunal in the case of Prabhat Zarda Facatory Pvt.Ltd. vs. CCE reported in 2002 (145) ELT 222 laying down that procurement/booking by an agent on commission basis amount to providing of service of clearing and forwarding agent. The said decision of the larger bench, which was subsequently, followed by the Tribunal stands confirmed by the Honble High Court of Punjab & Haryana in the case of CCE, Jalandhar vs. United Plastomers reported in 2008 (10) STR 229 when the appeal filed by the Revenue was rejected.
6. As against the above decision, learned SDR has placed reliance on Honble Karnataka High Court in the case of CCE, Bangalore-I vs. Mahaveer Generics reported in 2010 (17) STR 225 (Kar.). However, it is seen that in the said judgement it was not mere procurement of purchase orders but storing of goods was involved as also clearing and forwarding the goods to stockists and dealers. It can be safely observed that the ratio of the said decision is not applicable to the facts of the present case. Similarly, the decision in the case of CCE, Ludhiana vs. Singhania Chemicals Agency reported in 2009 (13) STR 160 (Tri.Del.) laying down that the activity of consignment agent undertaken by the assessee in that case, involving sale of goods at price fixed by principals and on behalf of the principals would get covered under the service of clearing and forwarding agent, would not be applicable to the facts of the present case. Instead admittedly the respondents in the present case are only procuring orders for their principal and are not dealing with the goods at all.
7. In view of the above, we find no justifiable reason to interfere in the order of the Commissioner (Appeals), the appeal filed by the Revenue is accordingly rejected.
(Pronounced in the open court on 15.09.2011) (ARCHANA WADHWA) MEMBER (JUDICIAL) (MATAHEW JOHN) MEMBER (TECHNICAL) mk 5