Appellant's Classification Upheld, Cenvat Credit Allowed on Service Tax for Mobile Phone Charges

The appeal in Case No. ST/172/2008 was dismissed as the appellant's classification as a Clearing and Forwarding Agent was upheld. However, in Case No. ST/469/2009, the appellant was allowed to avail cenvat credit on service tax paid on Mobile Phone Charges, with the Tribunal emphasizing that as long as input services are used for providing output services, credit should be admissible.

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Issues involved:
1. Classification of the appellant as a Commission Agent or a Clearing and Forwarding Agent during 01.04.2001 to 09.07.2004
2. Liability of the appellants to pay cenvat credit in excess of 20% and eligibility to avail cenvat credit on service tax paid on Mobile Phone Charges under Section 73(2) of the Finance Act 1994 read with Rule 14 of Cenvat Credit Rules, 2004

Analysis:

Issue 1: Classification of the appellant
The appellant contended that they should be reclassified as a Commission Agent instead of a Clearing and Forwarding Agent. They argued that based on their agreements with various companies, they were functioning as consignment agents, not Clearing and Forwarding Agents. However, the Commissioner and Commissioner (Appeals) upheld the classification as Clearing and Forwarding Agents. The Tribunal noted that the definition of Clearing and Forwarding Agents includes activities of Consignment Agents as per Section 65(25) of the Finance Act 1994. Since the appellants did not contest the payment of tax for the previous period, the appeal had no impact on their tax liability. Consequently, the appeal on this issue was dismissed.

Issue 2: Cenvat credit on Mobile Phone Charges
Regarding Appeal No. ST/469/2009, the original authority dropped certain demands. The issue of trading being an exempted service was examined, with the original authority determining that trading was a non-taxable service and not an exempted service under the Finance Act 1994. The Tribunal agreed with the original authority's decision, emphasizing that trading must be a taxable service to be considered exempted. The Tribunal also addressed the cenvat credit on Mobile Phone Bills, where the original authority disallowed a portion of the credit. The Commissioner in the Revision order upheld this disallowance based on a CESTAT decision, but the Tribunal found this decision to be incorrect as the High Court appeal status was not considered. The Tribunal concluded that as long as input services are used for providing output services, credit should be admissible. Therefore, the appeal was allowed on this issue with consequential relief.

In conclusion, Appeal No. ST/172/2008 was dismissed, while Appeal No. ST/469/2009 was allowed with consequential relief, if any.

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