Selling agency work outside Clearing and Forwarding Agent service where goods were never received or warehoused.

Activities under a selling agency agreement were held to fall outside Clearing and Forwarding Agent service where the agent only arranged dealer meetings, procured and forwarded orders, managed market-related work and recovered sale proceeds. The accepted indicia of C&F service include receiving goods from the principal, warehousing them, handling dispatch instructions, maintaining stock and dispatch records, and preparing invoices on behalf of the principal. Because the agent did not receive goods from the principal's premises or warehouse them, the essential elements of C&F service were absent. The service tax demand was therefore not sustainable.

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Issues: Whether the activities undertaken under the selling agency agreement with the principal amounted to Clearing and Forwarding Agent service.

Analysis: The selling agent arranged meetings with dealers, procured and forwarded orders, managed market-related work and recovery of sale proceeds. The accepted indicia of Clearing and Forwarding Agent service include receiving goods from the principal, warehousing them, receiving dispatch orders, arranging dispatch, maintaining stock and dispatch records, and preparing invoices on behalf of the principal. The respondent did not undertake the essential activities of receiving goods from the factory or premises of the principal or warehousing the goods. On the admitted facts, the work done fell outside the scope of C&F service.

Conclusion: The respondent's activities did not fall within Clearing and Forwarding Agent service and the demand was not sustainable.

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