Applicant not liable for Service Tax on consignment agency charges

The Tribunal found that the Applicant was not liable to pay Service Tax on consignment agency services provided to M/s. Tata Steel Ltd. as the consignment agency charges were not separately billed and not supported by evidence. The Tribunal held that the Applicant had made a prima facie case for total waiver of pre-deposit of dues adjudged, leading to the waiver of all dues and staying of recovery during the pendency of Appeals. The Stay Petitions were allowed, and the judgment was pronounced in open court.

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Issues:
Leviability of Service Tax on consignment agency services under 'Clearing and Forwarding Agent Service' alleged to have been rendered.

Analysis:
The judgment revolves around the issue of whether the Applicant is liable to pay Service Tax on consignment agency services provided to M/s. Tata Steel Ltd. in addition to conversion charges. The Applicant contended that they did not receive any separate consignment agency charges beyond the conversion charges paid by M/s. Tata Steel Ltd. The Ld. Sr. Advocate argued that since the Applicant did not receive any amount against the consignment agency agreement, there should be no liability of Service Tax. The Applicant had paid service charges to other consignment agents and availed CENVAT Credit on the Service Tax paid by them. The Ld. Sr. Advocate emphasized that the Applicant had only received conversion charges and had discharged Central Excise duty on those charges.

The Revenue argued that the consignment agency services were included in the conversion charges paid by M/s. Tata Steel Ltd. to the Applicant. Even though the consignment agency charges were not separately billed, the Revenue contended that they were part of the overall remuneration received by the Applicant and hence liable to Service Tax separately. The Revenue maintained that the Applicant had agreed to provide consignment agency services in addition to conversion of raw materials, and the remuneration for such services was fixed at Rs.250/275 per M.T.

After hearing both sides and examining the records, the Tribunal found that the Applicant had not received any consignment agency charges beyond the conversion charges from M/s. Tata Steel Ltd. The Tribunal noted that the case against the Applicant was based on the assumption that they had received the consignment agency charges, which was not supported by evidence. The Tribunal was not convinced by the Revenue's argument that the charges were included in the conversion charges and required separate Service Tax payment. Accordingly, the Tribunal held that the Applicant had made a prima facie case for total waiver of pre-deposit of dues adjudged. Consequently, all dues adjudged were waived, and the recovery was stayed during the pendency of the Appeals. The Stay Petitions were allowed, and the judgment was pronounced and dictated in the open court.

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