Tribunal rules in favor of appellants, finding no liability for service tax under "clearing and forwarding agent" category.

The Tribunal allowed the appeal in favor of the appellants, holding that they were not liable to pay service tax under the category of "clearing and forwarding agent" as they were solely receiving commission for procuring or booking orders and not engaged in the full range of activities specified in the agreement. The Tribunal found that the appellants were acting as agents but not performing the actual "clearing and forwarding" activities, as supported by relevant case law. The imposition of service tax was deemed improper, and the appellants' position was upheld.

---

---

Issues:
1. Whether the appellants were liable to pay service tax under the category of "clearing and forwarding agent" for procuring or booking orders from customers.

Analysis:
The appeal in question arose from an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Hyderabad, confirming the imposition of service tax on the activity of procuring or booking orders by the appellants under the classification of "clearing and forwarding agent." The appellants contended that they were solely receiving commission for procuring orders and were not engaged in the actual activities of a "clearing and forwarding agent," which were performed by different transporters. The learned counsel for the appellants argued that various judgments, including the case of Larson and Toubro Ltd. v. CCE, supported their position that merely procuring or booking orders did not amount to providing services as a "clearing and forwarding agent."

The Commissioner (A) based the imposition of service tax on the terms of the agreement between the appellants and their principal, which indicated that the appellants were also involved in the activities of a "clearing and forwarding agent." However, the appellants maintained that not all terms of the agreement were enforced, and they only received commission for booking orders, not for carrying out the full range of activities specified in the agreement. Upon careful consideration, the Tribunal found that the appellants were indeed acting as agents by procuring orders for their clients but were not engaged in the actual "clearing and forwarding" activities as per the terms of the agreement. The Tribunal relied on the cited judgments, including Larson and Toubro Ltd. and CCE, Allahabad v. Chandan Chemicals, to support the appellants' position that they should not be taxed under the category of "clearing and forwarding agent."

In conclusion, the Tribunal held that the appellants' plea of receiving commission solely for procuring or booking orders, without engaging in the full scope of activities of a "clearing and forwarding agent," was valid. Therefore, the impugned order confirming the service tax liability was deemed not legal and proper, leading to the appeal being allowed in favor of the appellants.

---