Real nature of consignment stockistship controls service tax liability where the factual record is incomplete.

Taxability under service tax depends on the real nature of the contractual arrangement and the services actually rendered, not on the label of a consignment stockistship or agency agreement. The record indicated functions such as receiving orders, stocking goods, maintaining accounts and collecting tax, but the factual foundation for deciding whether these activities amounted to clearing and forwarding operations was incomplete. Because the principal activity and exact nature of services during the relevant period were not fully determined, service tax liability could not be finally resolved on the material available, and the matter was remitted for fresh adjudication.

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Issues: Whether the appellant's activities under the consignment stockistship agreement constituted clearing and forwarding operations attracting service tax, and whether the matter required remand for fresh determination.

Analysis: The agreement had to be construed as a whole and its substance, rather than its label or isolated clauses, was decisive. The record showed that the appellant's functions included receiving orders, stocking goods, maintaining accounts, collecting tax, and other connected obligations, but the authorities had proceeded without a complete determination of the appellant's principal activity and the exact nature of the services rendered during the relevant period. Since the factual foundation necessary to decide taxability was incomplete, the controversy could not be finally resolved on the material then available.

Conclusion: The issue of service tax liability was not finally determined and the matter was remitted to the assessing authority for fresh adjudication.

Ratio Decidendi: Taxability under a service-tax classification depends on the real nature of the contractual arrangement and the services actually rendered, and a consignment or agency label is not conclusive where the essential factual enquiry remains incomplete.

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