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of <h1>Consignment agents not liable for service tax, Tribunal cites precedent. Analyze contracts for tax accuracy.</h1> <h3>COMMISSIONER OF CUS. & C. EX., VADODARA Versus TRADE TEK CORPORATION</h3> The Tribunal upheld the Commissioner (Appeals) decision, ruling in favor of the respondents in a case concerning the levy of service tax on consignment ... Service Tax - Consignment Agent Issues:1. Whether service tax is leviable on the respondents acting as consignment agents.2. Validity of the demand, penalty, and imposition under Sections 76, 77, and 78 of the Finance Act, 1994.3. Applicability of the Tribunal's order in Mahavir Generics v. CCE, Bangalore to the present case.Analysis:1. The appeal in question arose from the Commissioner (Appeals) holding that service tax was not applicable to the respondents as they were not providing services as clearing and forwarding agents. The respondents acted as consignment agents for the sale of Aluminium semi-finished products of a company. The department issued a Show Cause Notice for recovery of service tax, interest, and penalties under various sections of the Finance Act, 1994. The adjudicating authority confirmed the demand and penalties, which were later set aside by the Commissioner (Appeals) based on the Tribunal's order in Mahavir Generics v. CCE, Bangalore. The Revenue appealed this decision.2. The Tribunal found that the terms and conditions between BALCO and the respondents were similar to those between Cipla Ltd. and Mahavir Generics in a previous case. In the Mahavir Generics case, it was established that the entity was not acting as a clearing and forwarding agent but as a consignment agent, hence not providing taxable services subject to service tax. The Tribunal noted that the Revenue failed to distinguish the present case from the Mahavir Generics judgment based on the agreement's clauses. Therefore, the Tribunal upheld the Commissioner (Appeals) decision, rejecting the Revenue's appeal.3. The Tribunal's decision was based on the application of the Mahavir Generics judgment, which established the distinction between a clearing and forwarding agent and a consignment agent in determining the liability for service tax. As the terms and conditions in the present case were akin to those in Mahavir Generics, the Tribunal concluded that the respondents were not liable for service tax under the circumstances. The judgment emphasized the importance of analyzing the nature of the services provided and the specific contractual agreements to determine the applicability of service tax laws accurately.
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