Commission sales agent activity not taxable as clearing and forwarding agency service; service tax demand, interest and penalties fail.

A commission sales arrangement did not amount to clearing and forwarding agency service because the agent was appointed for consignment or commission sales, received goods already cleared by the principal, stored them and sold them, but was not required to clear goods from the principal. Applying the cited precedent, the activity fell outside the taxable category, so the service tax demand was unsustainable and the related interest and penalties could not survive.

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Issues: Whether the appellant's activities under the commission sales agreement amounted to clearing and forwarding agency service and attracted service tax, interest, and penalties.

Analysis: The agreement described the appellant as a commission sales agent appointed for consignment or commission sales. It did not require the appellant to undertake clearance of goods from the principal. The arrangement showed that the appellant received goods already cleared by the principal, stored them, and sold them, which does not bring the activity within clearing and forwarding agency service. The cited precedent supported the position that such an arrangement is not taxable under that category.

Conclusion: The demand for service tax was unsustainable and the penalties and interest could not survive.

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