TaxTMI 
TaxTMI 
2009 (11) TMI 104
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.... that their activities did not fall within the purview of the category of C & F agent and accordingly they sought for surrender of the Certificate arid issuance of a fresh registration. The Jurisdictional authority on affording a personal hearing to the assessee and on consideration of objections filed came to a conclusion that assessee is a C & F agent and their activities come within the taxable services as C & F agent and accordingly ordered that the assessee should continue with the registration under the category of C & F agent by order dated 28-12-2001 which is at Annexure-C. The assessee being aggrieved by the same filed an appeal in O-I-A 116/2003-CE before the Commissioner of Central Excise (Appeals). The appellate authority on considering the grounds urged, submissions made and arguments advanced on behalf of the assessee by order dated 12-5-2003 dismissed the appeal and confirmed the order in original dated 28-12-2001 passed in O.I.A. No. 26/2001. 3. Being aggrieved by this order the assessee preferred an appeal before CESTAT in STA 18/2003 (Final order 12/2004) contending that its activity comes within purview of Commission Agent and as such the rejection of the pray....
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....et aside. 7. Sri Raghavendra B., learned counsel for the appellant would elaborate his submissions to contend that the Tribunal ought not to have traversed beyond interpreting the Section as per the language employed in the Statute itself and would submit that while interpreting the taxing Statutes the authorities cannot import which is not expressed in the provision itself and in this regard he relies upon the decision in the matter of Commissioner of Sales Tax U.P. v. Modi Sugar Mills Pvt. Ltd., reported in AIR 1961 S.C. 1047. He would also add that Tribunal was in error in relying upon the dictionary meaning and in this regard he would rely upon the decision of the Hon'ble Supreme Court in the case of Ponds India Ltd v. Commr. of Trade Tax, Lucknow reported in 2008 (227) E.L.T. 497 (S.C.) by drawing our attention to paragraph 24 contending that definition of dictionary meaning as found in Wikipedia should not be used in aid of construction of a Fiscal Statute. He would also submit that Section itself being explicitly clear wherein the word consignment agent has also been included in the Section itself and hence it comes within inclusive definition of "C & F Agents" and th....
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....ing and forwarding agent and as such prays that the question of law be answered against the revenue and in favour of the assessee. 9. He would rely upon the decision of Commissioner of Central Excise, Jalandhar v. United Plastomers reported in 2008 (10) S.T.R. 229 (Punjab & Haryana) to contend that the Larger Bench of the Tribunal had explicitly overruled the Prabhat Zarda Factory case as confirmed by the High Court and contends that Tribunal was fully justified in holding that the said Prabhat Zarda Factory case relied upon by the authorities in the instant case was erroneous and accordingly seeks for dismissal of the appeal. 10. The learned counsels appearing for both the appellant and as well as the assessee have taken us extensively through the agreement in question which at Annexure-D produced in the appeal memorandum to buttress their arguments as clearing and forwarding agent and also as commission agent. Having given our anxious consideration to the submission made at the Bar it would be necessary for us to examine the agreement in question which would be a vital factor to ascertain as to whether the activities carried on by the assessee in question would fall within ....
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....shall further update and send the list to the principal as and when a change takes place. Such stock will be responsible only to the agent and all dealings with them will be done only by the Agent. It is agreed that the principal shall not in any become liable for dealings inter se between the Agent and the stockists/dealers/distributors so appointed. The Agent shall not appoint any sub-agent. 17. For the efforts put in by the Agent he will he compensated as follows. (a) The Agent will be entitled to a commission of 5% on net price (excluding commission and sales tax) on all products excluding liquid preparations. The commission so calculated shall be paid to him directly on the previous month's sales. (b) The agent will be entitled to a commission of 9% on net price (excluding commission and sales Tax) on liquid preparations. The commission so calculated shall be paid to him directly on the previous month's sales." In order to appreciate the contentions raised herein above and also in the context of agreement clauses and to examine as to whether respondent would fall in either of the category as canvassed it would be necessary for us to extract the definitio....
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....o join the agent as it is consignment agent" and even in paragraph 1 of the agreement the principal namely, M/s. Cipla Ltd., have appointed the assessee as "consignment agent" in Clause (5). With regard to the price determination it has been mentioned in the Agreement that principal as well as the consignment agent after mutual consultations and considering the market conditions shall fix the price of the product which would be sold accordingly. Even in Clause (7) the Principal has authorised the consignment agent to appoint stockists, dealers, agents on its behalf. It is in this context the learned counsel appearing for the assessee would contend that Clause No. 17 envisage that only a commission would be paid to the agent for sale of the products and the Clauses (a) to (b) clearly postulates that except, payment of commission nothing else is envisaged under the agreement and as such submits that only an assessee carries on commission agent's work. Thus by reading the above clauses conjunctively it can be seen that clearing and forwarding operations is a compendious expression of nature of services rendered by Principal to the Agent and in the instant case the assessee in ques....
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....s contracts for sale of purchase of goods for others, the definition of "Commission agent" in Section 2(aaa) of Central Excise Act, 1944, would apply in relation to service tax as it applies in relation to duty of excise by virtue of sub Section(121) or Section 65 of the Act. Services of Commission agent are included in the definition of "business auxiliary service" under sub-Section(19) of Section 65 w.e.f. 1-7-2003, which includes service of a Commission agent. As de fined in explanation (a) to sub-section (19) of Section 65 Commission agent is a person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for consideration, and includes any person who, while acting on behalf of another person: deals with goods or services or documents of title to such goods or services; or collects payment of sale price of such goods or services; or guarantees for collection or payment for such goods or services; or undertakes any activities relating to such sale of purchase of such goods or services. This clearly shows that the activity of mere procurement of purchase orders for the principal on commission basis of a Commission agent is ....
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....issioner of C.Ex., Jalandhar v. Kulcip Medicines (P) Ltd. (sic) [United P(astomers] referred to supra wherein the Larsen and Toubra case of the Larger Bench of the Tribunal having been relied upon it has been held in paragraph 13 in Kulcip's case to the following effect:- "13...... and mere procuring or having orders for the principal by an agent on payment of commission basis would net amount to providing services as "clearing and forwarding agent", within the meaning of the definition of that expression under Section 65(25) of the Finance Act, 1994. While reaching to this conclusion the Tribunal has observed that the expression "directly or indirectly" and "in any manner" occurring in the definition of "clearing and forwarding" agent cannot be isolated or the activity of dealing and forwarding operations and an agent it engaged only for procuring purchase orders for the vendor on commission basis does not engage in any of the activities connected with clearing and forwarding operations directly or indirectly." And thus found on facts that it was mere procuring the orders for the principal by an agent on payment of commission basis and thus would fall out side the purvie....
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.... contention of the learned counsel for the assessee to hold that they would stand outside the definition of clearing and forwarding agent. In this context, it would be of benefit to extract the Judgment of the Hon'ble Supreme Court of India in the case of KPTCL supra at paras 12, 13 & 14 which reads as follows : "12. Lord Watson in Dilworth v. Commissioner of Stamps (1899) AC 99 made the following classic statement: "The word "include" is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute; end when it is so used these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import, but also those things, which the interpretation clause-declares that they shall include. But the word "include" is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to show that it was not merely employed for the purpose of adding to the natural significance of the words or expressions defined, It may be equivalent to "mean and include", and in that case it may afford an exhaustive explanation of t....