Commission agent services were not clearing and forwarding services before their specific tax inclusion under business auxiliary services.

Commission agent services limited to identifying customers, procuring purchase orders, and securing orders, without physical handling of goods, were treated as distinct from clearing and forwarding agent services. The Board's distinction between commission agents and consignment agents was accepted, and an earlier ruling on clearing and forwarding activity was held inapplicable to such commission-based work. As commission agent services were brought into the taxable category of business auxiliary services only from 14-05-2003, the disputed prior period could not be taxed under the clearing and forwarding head.

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Issues: Whether services rendered by commission agents in identifying customers, procuring purchase orders, and securing orders for commission, during the period prior to 14-05-2003, were taxable as clearing and forwarding agent services or only became taxable later as business auxiliary services.

Analysis: The services in question were found to be commission agent services and not services involving physical handling of goods. The distinction drawn by the Board between commission agents and consignment agents was accepted, and the earlier decision dealing with clearing and forwarding services was held not to cover commission agent services. Since commission agent services were brought within the taxable category of business auxiliary services only with effect from 14-05-2003, the disputed period prior to that date could not be subjected to service tax under the clearing and forwarding agent category.

Conclusion: The demand of service tax for the disputed period was unsustainable and was set aside. The assessee succeeded.

Ratio Decidendi: Commission agent services, where the agent merely procures customers and purchase orders without physically dealing with goods, are not taxable as clearing and forwarding agent services for the period prior to their specific inclusion in business auxiliary services.

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