Rake handling agency contract not shown as clearing and forwarding service; unconditional waiver of pre-deposit granted.

A rake handling agency arrangement confined to unloading, loading, local transportation, stacking, handing over material at the godown, and supplying labour did not, on a prima facie reading, show clearing and forwarding agent services. The absence of functions such as receipt of goods from the principal, dispatch to customers, order processing, invoice preparation on behalf of the principal, and maintenance of receipt and dispatch records supported the view that the service classification claimed by the department was not established. On that basis, unconditional waiver of pre-deposit of service tax and penalty was granted.

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Issues: Whether the appellant was entitled to unconditional dispensation of pre-deposit of service tax and penalty on the basis that the agreement did not disclose provision of services as a clearing and forwarding agent.

Analysis: The agreement was described as a rake handling agency arrangement and its obligations were confined to unloading, loading, local transportation, stacking, handing over material at the godown, and providing labour for such work. The arrangement did not include the typical functions of a clearing and forwarding agent, such as receipt of goods from the principal, dispatch to customers, receiving orders, preparing invoices on behalf of the principal, or maintaining receipt and dispatch records. The finding that the appellant was not issuing invoices on behalf of the company and was only raising bills for loading and transportation further supported the prima facie view in its favour.

Conclusion: The appellant was entitled to unconditional waiver of pre-deposit.

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