Appeal dismissed: Sales reps' services not 'C&F Agency Services'; no service tax liability.

The Tribunal dismissed the Revenue's appeal, affirming the lower appellate authority's decision that the services provided by the sales representative did not constitute 'C&F Agency Services' for service tax liability. The Tribunal found that the sales representatives were not engaged in clearing and forwarding activities but were primarily involved in securing orders and ensuring delivery for which they received commissions. Therefore, the Tribunal upheld the lower authority's ruling, concluding that the sales representatives' activities did not meet the criteria for 'C&F Agency Services.'

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Issues:
1. Whether the services rendered by the sales representative appointed by the respondent fall under 'C&F Agency Services' for the purpose of service tax liability.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal passed by the Commissioner of Central Excise & Customs, Aurangabad, regarding the service tax demand for the period from 16/06/1997 to 31/08/1999. The lower appellate authority had ruled that the services provided by the sales representative appointed by the respondent did not constitute 'C&F Agency Services,' leading to the dismissal of the service tax demand. The Revenue contested this decision before the Appellate Tribunal CESTAT Mumbai.

The Revenue argued that the activities of the sales representative should be considered as 'C&F Agency Services' based on precedents like the case of Prabhat Zarda and Mahavir Generics. However, it was acknowledged by the Additional Commissioner (AR) that the decision in the Prabhat Zarda case had been overruled by a Larger Bench decision in the case of Larsen & Toubro Ltd. The Larger Bench had clarified that to qualify as 'C&F Agency Services,' both clearing and forwarding activities must be performed.

Upon reviewing the case, the Tribunal observed that the sales representatives were solely involved in canvassing orders and were not engaged in the clearing and forwarding of goods. They were paid a commission for securing orders and ensuring delivery, which did not constitute clearing and forwarding services. Therefore, the Tribunal concluded that the activities of the sales representatives did not meet the criteria for 'C&F Agency Services,' upholding the decision of the lower appellate authority.

As a result, the appeal filed by the Revenue was dismissed by the Tribunal on the grounds of lack of merit, affirming the lower appellate authority's decision regarding the service tax liability related to the services provided by the sales representative.

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