Clearing and forwarding service tax liability requires actual operational involvement, not mere commission-based sales facilitation.

Service tax liability under the clearing and forwarding category was examined on whether the assessees actually performed clearing and forwarding operations. The record showed that they acted only as commission agents finalising sales between purchasers and buyers, without handling the seller's goods or undertaking any clearing or forwarding activity. As no sufficient material was produced to displace the finding in the order-in-appeal, the demand was held unsustainable and the order dropping the service tax demand was sustained.

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Issues: Whether the respondents were liable to service tax as clearing and forwarding agents for the disputed period.

Analysis: The respondents were found to have acted only as commission agents involved in finalising sales transactions between purchasers and buyers. They did not handle the goods of the seller and did not undertake any clearing or forwarding operations. No sufficient material or evidence was shown to disturb the finding recorded in the order-in-appeal.

Conclusion: The respondents were not clearing and forwarding agents and the service tax demand was not sustainable.

Final Conclusion: The order-in-appeal dropping the service tax demand was sustained and the Revenue's challenge failed.

Ratio Decidendi: Service tax liability cannot be imposed under the clearing and forwarding category unless the assessee actually performs clearing and forwarding operations and not merely commission-based sales facilitation.

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