2017 (10) TMI 408 - AT - Service Tax

Tribunal rules services not Clearing and Forwarding Agent; decision based on legal precedent and specific activities.

Karamchand Thapar and Bros (CS) Ltd. Versus Commissioner of Central Excise, Nagpur

The Tribunal allowed the appeal, ruling that the services provided by the appellant did not qualify as Clearing and Forwarding Agent services under the ... Classification of services - Clearing and forwarding agent service - Held that: - the identical matter has been decided by the Hon’ble Apex Court in the case of Coal Handlers Pvt. Ltd. Vs. Commissioner of Service Tax [2015 (5) TMI 249 - SUPREME COURT], where the Hon’ble Apex Court has held that such activities do not qualify under the category of clearing and forwarding agent service - appeal allowed - decided in favor of appellant. Issues:Confirmation of demand of service tax based on the classification of services provided as Clearing and Forwarding Agent service.Analysis:The appeal was filed against the confirmation of demand of service tax by M/s. Karamchand Thapar & Bros.(CS) Ltd. The appellant did not appear in person but submitted written arguments citing a judgment of the Hon'ble Apex Court in a related case. The judgment highlighted the activities that qualify as Clearing and Forwarding Agent services, emphasizing the role of getting goods cleared and forwarding them to a specific destination on behalf of the principal. The judgment clarified that services provided indirectly also fall under this category. The Hon'ble Apex Court held that the primary job of the appellant was supervision and liaisoning, not clearing or forwarding operations, as they did not take custody of the goods or arrange transportation. The judgment was also followed by the Hon'ble Bombay High Court in a similar case. The Tribunal referred to these precedents and concluded that the services provided by the appellant did not qualify as Clearing and Forwarding Agent services, as defined under Section 65(25) of the Finance Act, 1994.The Tribunal noted that the matter had already been decided by the Hon'ble Apex Court in a case involving almost identical activities. The Hon'ble Apex Court's judgment emphasized the definition of Clearing and Forwarding Agent services, stating that such services involve clearing goods and forwarding them to a specific destination on the principal's instructions. The judgment highlighted that the appellant did not perform any of the activities associated with clearing and forwarding operations, as they were not involved in getting goods cleared or arranging their transportation. The goods were under a contract between the coal company and another entity, and the appellant's role was limited to supervision and liaisoning. Based on the clear findings of the Hon'ble Apex Court in similar circumstances, the Tribunal allowed the appeal, ruling that the services provided did not qualify as Clearing and Forwarding Agent services under the law.In conclusion, the Tribunal allowed the appeal based on the precedent set by the Hon'ble Apex Court regarding the definition and scope of Clearing and Forwarding Agent services. The judgment emphasized the specific activities that constitute such services and clarified that indirect provision of services also falls within this category. The Tribunal's decision was guided by the legal interpretations provided by the higher courts, ultimately ruling in favor of the appellant based on the findings that the services provided did not meet the criteria for classification as Clearing and Forwarding Agent services under the relevant law.