Licensed auctioneering of cardamom is not clearing and forwarding service when no clearing or forwarding operations are performed.

A licensed auctioneer selling cardamom was not treated as a clearing and forwarding agent under the Finance Act, 1994 because the activity was limited to auctioning goods brought by growers or dealers and earning commission for that service. The record showed no clearing or forwarding operations, and mere receipt or incidental storage of goods for auction did not change the character of the service. References to auction-related provisions and the Sale of Goods Act were used only to explain the nature of an auction sale. The activity therefore fell outside the taxable category, and the revenue's appeal failed.

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Issues: Whether the licensed auctioneer activity undertaken for sale of cardamom amounted to a taxable service as a clearing and forwarding agent under the Finance Act, 1994.

Analysis: The activity was examined in the light of the licence conditions governing cardamom auctions and the nature of the service rendered. The auctioneer only facilitated sale of cardamom brought by growers or dealers and received commission for auctioning; there was no material to show any clearing or forwarding operation. The provisions relating to auction of property under section 65(7a) and section 65(105)(zzzr) of the Finance Act, 1994 were noted only to clarify the character of auction-related services, while section 64(2) of the Sale of Goods Act was referred to for the completion of an auction sale. Mere receipt and storage of goods for auctioning did not convert the activity into clearing and forwarding services.

Conclusion: The activity did not fall within the taxable category of clearing and forwarding agent service, and the revenue's appeal failed.

Ratio Decidendi: A licensed auctioneer who merely auctions goods and incidentally stores them for sale, without undertaking clearing or forwarding operations, is not liable to service tax as a clearing and forwarding agent.

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