Clearing and forwarding agent classification: mere product sales did not justify recovery, so unconditional stay was granted.

A dealer who merely sold the principal's products, without performing the other functions associated with a clearing and forwarding agent, was treated as having made out a prima facie case against service tax liability at the interim stage. The Tribunal relied on the earlier Larger Bench view, as affirmed by the later High Court ruling, that performance of only one function does not automatically bring an assessee within the charging definition. On that basis, recovery was stayed and unconditional stay of the service tax demand and penalties pending appeal was granted.

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Issues: Entitlement to unconditional stay of the service tax demand and penalties pending appeal.

Analysis: The appellant was found, at this stage, to have only sold the principal's products without undertaking the other functions associated with a clearing and forwarding agent. The Tribunal noted the earlier larger bench view and the later High Court affirmation of the proposition that mere performance of one function does not automatically bring the assessee within the charging definition, and treated that view as governing the interim stage. On that basis, a prima facie case was made out for protection against recovery.

Conclusion: The appellant was entitled to unconditional stay.

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