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CESTAT: Services reclassified as 'Storage & Warehousing' not 'Clearing & Forwarding' The Appellate Tribunal CESTAT, CHENNAI determined that the services provided by the assessees should be categorized as 'Storage and Warehousing service' ...
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CESTAT: Services reclassified as "Storage & Warehousing" not "Clearing & Forwarding"
The Appellate Tribunal CESTAT, CHENNAI determined that the services provided by the assessees should be categorized as "Storage and Warehousing service" rather than "Clearing & Forwarding Agent service" as contended by the Revenue. The Tribunal considered the agreement between the assessees and Madras Fertilizers Ltd., noting that the assessees received products already cleared by the manufacturer and did not undertake clearance activities themselves. Citing a decision by the Hon'ble Punjab & Haryana High Court, the Tribunal upheld the impugned order and dismissed the appeal, deeming the cross objection as only a reply to the Revenue's appeal.
Issues: 1. Determination of services provided by the assessees - "Storage and Warehousing service" or "Clearing & Forwarding Agent service"
Analysis: The main issue in the present appeal before the Appellate Tribunal CESTAT, CHENNAI was to ascertain whether the services provided by the assessees should be categorized as "Storage and Warehousing service" as claimed by them or as "Clearing & Forwarding Agent service" as contended by the Revenue. The Tribunal considered the definitions and scope of a Clearing and Forwarding Agent, which includes any person engaged in providing services related to clearing and forwarding operations. To better understand the issue, the relevant clauses of the agreement between the assessees and Madras Fertilizers Ltd. were examined. The agreement outlined the services to be performed by the Contractor, which included receiving products dispatched by trucks and storing them until release, dispatching products to other locations, and delivering products to customers as per authorization. It was noted that the assessees received products already cleared by the manufacturer and did not undertake any clearance activities themselves.
The Tribunal referred to a decision by the Hon'ble Punjab & Haryana High Court in Commissioner of C.Ex., Panchkula Vs Kulcip Medicines (P) Ltd., which held that a dealer receiving goods already cleared by the manufacturer and forwarding them to buyers cannot be considered a Clearing & Forwarding Agent for the purpose of service tax liability. Applying the ratio of this decision to the present case, the Tribunal upheld the impugned order and rejected the appeal. Additionally, the cross objection filed was deemed to be only in the nature of comments/reply to the Revenue's appeal and was therefore dismissed. The judgment was dictated and pronounced in open court by the Vice-President of the Tribunal.
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