Commission agent classification limits service-tax exposure where sale facilitation is dominant and forwarding steps are only incidental.

Where the dominant arrangement is commission-based sale facilitation, incidental receipt, storage and despatch clauses do not by themselves create a clearing and forwarding agency for service-tax purposes. The text states that a commission agent selling the principal's goods on commission falls within Business Auxiliary Services, and that the relevant exemption for commission agents applied on the facts found. It also notes that the earlier Revenue-cited decision was distinguishable because it involved clearance of goods from the factory onwards. On that basis, the respondent was not taxable as a clearing and forwarding agent and the demand was dropped.

---

---

Issues: Whether the respondent's activity under the agreement was taxable as a clearing and forwarding agent or fell within the category of commission agent / Business Auxiliary Services.

Analysis: The arrangement described the respondent as a commission agent and provided for sale of the principal's goods on commission. Receipt, storage and delivery-related clauses were held to be incidental to sales facilitation and not the clearing and forwarding function contemplated under the service-tax category. The definition of Business Auxiliary Services specifically covered commission agents, including persons dealing with goods, and the exemption notification for commission agents was also applicable on the facts found. The earlier decision cited by the Revenue was distinguished as it involved clearance of goods from the factory onwards.

Conclusion: The respondent was not liable to tax as a clearing and forwarding agent, and the Revenue's challenge failed.

Final Conclusion: The order dropping the demand was sustained on the footing that the respondent acted as a commission agent whose services were not taxable under the clearing and forwarding category on the facts found.

Ratio Decidendi: Where the dominant relationship is one of commission-based sale facilitation, incidental receipt, storage and despatch clauses do not by themselves convert the commission agent into a clearing and forwarding agent for service-tax purposes.

---