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of <h1>Tribunal rules in favor of respondents, activities not clearing & forwarding services. Upholds decision to set aside service tax demand.</h1> <h3>CCE And ST, Tirunelveli Versus M/s. Vicinivas Agency</h3> CCE And ST, Tirunelveli Versus M/s. Vicinivas Agency - 2018 (12) G.S.T.L. 171 (Tri. - Chennai) Issues: Alleged non-payment of service tax under 'Clearing and Forwarding' services.In this case, the issue revolves around the alleged non-payment of service tax under the category of 'Clearing and Forwarding' services by the respondents. The department contended that the respondents should pay service tax on wheat handling charges under this category. The original authority confirmed the demand, interest, and penalties, but the Commissioner (Appeals) set aside the decision, leading the department to appeal before the Tribunal.The department argued that the services provided by the respondents should be classified under clearing and forwarding services, not cargo handling services. They highlighted that the respondents were appointed by a company to carry out various services related to the handling of goods, transportation, storage, and customs clearance. The department emphasized that the collective services provided by the respondents fell under the category of clearing and forwarding agent service, justifying the imposition of service tax on the handling charges.On the other hand, the respondents argued that their activities were not classifiable under Clearing and Forwarding services. They claimed to be engaged in various activities beyond handling wheat, such as manufacturing HDPE sacks, stevedoring, salt trading, and transportation. The Tribunal, after reviewing the records and cross-objections, found merit in the respondent's contention. They concluded that the respondents' activities, including holding a stevedoring license and engaging in transportation and custom house handling works, did not align with the classification of clearing and forwarding services. The Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the department's appeal, stating that the activities of the respondents did not fall under the category of clearing and forwarding services, thus rejecting the imposition of service tax on the handling charges.Therefore, the Tribunal ruled in favor of the respondents, determining that their activities did not qualify as clearing and forwarding services, and upheld the decision of the Commissioner (Appeals) to set aside the demand for service tax, interest, and penalties.
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