AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (12) TMI 262
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....r terminal handling of containerized cargo, coordinating with CHAs for customs clearance of documents etc, shifting of empty containers from container yards to CWC-CFS, facilitating fumigation required for agro products, employment of labours for stuffing of the cargo into containers etc. 4. It was the conclusion of the lower authorities that the appellants are providing handling, clearing and forwarding service to the clients. On reaching such a conclusion, Show Cause Notices were issued alleging that entire activities carried out by the assessee appear more appropriately classifiable under the category of Clearing & forwarding Agents, as defined in Section 65(25) of Finance Act, 1994 and the taxable service under Section 65(105)(j) of Finance Act, 1994. It was also alleged in the Show Cause Notice that the appellants are acting as pure agent of the service of the recipient, as such it cannot be considered that the assessee incurring expenditure/cost in providing taxable service of clearing & forwarding as a pure agent and hence the sale value in respect of service shall be gross amount charged and recovered from their client. The appellants herein contested the Show Cause Notice....
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....m warehouse and nor is there any question of appellant maintaining records of the stock in warehouse and appellants do not prepare any invoices on behalf of the exporter. It has been the submission that very same view was reiterated by the Board in its 37B order No. 2/1/2002-ST, dt.24.4.02, wherein in Para 10, the Board has clearly indicated that the activities carried out by clearing & forwarding agent. It is the submission that as per Board's understanding, the activities carried out would not fall under the category of clearing & forwarding agent services. He would also submit that Hon'ble High Court of Punjab & Haryana in the decision of CCE Panchkula v. Kulcip Medicines (P.) Ltd. [2009] 20 STT 264 had held clearly that a person can be charged Service Tax liability under clearing & forwarding agent services, only if the person is undertaking both the activities of clearing & forwarding. If he is not engaged in both the operations and engaged only in single operation of clearing or forwarding, the said activity of service will not fall under the category of clearing & forwarding agent. He would take us through the entire order of Hon'ble High Court and also submit th....
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.... Ports and they did the booking of ocean going vessels and other host of activities as has been brought out in the Show-Cause Notice. It is also the submission that one Shri Gautam Advani, Authorised Signatory, in his statement recorded on 10.10.07 has admitted that they are facilitating clearance of import/export consignment as per requirement of Customers and they float quotation for customs clearance, documents/offloading from truck, carting charges, scaling charges, sealing charges, empty containers shifting charges etc., and as such activities are not conducted on behalf of the customers. Hence, the activity is not limited to handling/clearance of export and import cargo within Port/ICD area. It is the submission that the definition of clearing & forwarding agent as per Section 65(25) of Finance Act, 1994 would include the operation of the appellant, appellants are sending empty containers from the yard for loading of cargo, getting goods examined by Customs authorities and clearing the same to customs area and loading/unloading of goods, transporting and shifting of the container. These activities would indicate that the cargo is cleared and forwarded by them from Port/ICD/CF....
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.... of Board's circular dt.24.4.02 does not imply meaning as has been sought to be propagated by ld. Authorised Representative for the Department. It is the submission that the proposition of ld. Authorised Representative appearing on behalf of the Department, as to clearances of export cargo from port should be considered as clearing activity seems to be far-fetched. 9. We have considered the submissions made at length by both sides and perused the records. 10. The issue to be decided in this case is whether the appellant's activity of facilitating clearances of export/import cargo, freight booking of ocean going vessel shifting empty containers from container yard to CWE-CFS, facilitating freight required for agro product, employment of labourer for stuffing of cargo into containers, co-ordination with shipping lines for terminal handling of containerised cargo, co-ordinating with CHAs would fall under the category of services rendered by the appellant clearing & forwarding service or not. 11. The factual matrix is not disputed. The appellant is engaged in various operations. It is also undisputed that one Shri Gautam Advani, Authorised Signatory of the appellant company ....
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....oming to the main plea of the assessee that existence of Principal, contract with Principal, owning a godown, handling dispatch of goods on behalf of Principal, preparing invoices for the goods etc, are the activities clarified by CBE&C in Circular No. B.43/7/97-TRU, dt. 11.7.97 as the services of a Clearing and Forwarding Agent. In this regard, I find that Section 65(25) of Finance Act, 1994 defines "Clearing and Forwarding Agent" as under: "any person who is engaged in providing any service, either directly or indirectly, connected with the clearing and forwarding operations in any manner to any other person and includes a consignment agent;" 13. It can be seen from the above reproduced paragraph that the adjudicating authority has considered the services rendered as clearing & forwarding services based upon the interpretation of the definition given in Section 65(25) of Finance Act, 1994 holding that the appellant is providing services directly or indirectly connected with clearing & forwarding operation in the manner. 14. We are of the considered view that the adjudicating authority had incorrectly interpreted the definition which is defining the definition of clearing & for....
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....nbsp;(e) Maintaining records of the receipt and despatch of goods and the stock available at the warehouse; (f) Preparing invoices on behalf of the principal 2.3 It has been decided that the person responsible for collecting the service tax in the case of services rendered by a clearing and forwarding agent shall be the person engaging/appointing a clearing and forwarding agent (Notification No. 26/97-service tax refers). It may be noted that unlike in the case of other service tax levies where the service provider is the person responsible for collecting the service tax, in the case of services rendered by the clearing and forwarding agents the service tax liability shall be discharged by the person availing the service so rendered. In other words, the principal who engages a clearing and forwarding agent is the person responsible for collecting and paying the service tax to the exchequer, Commissioners of Central Excise may therefore take necessary action accordingly and also make this position clear by issue of suitable trade notice. 2.4 Further under the Finance Act, 1997 the value of taxable service rendered by a clearing and forwarding agent has been defi....
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....under the Scheme, Further, the operator under Rule 9 of the Scheme is required to collect hire charges from a foreign national or a non-resident Indian, only in foreign exchange. 3.3 The taxable service rendered by a Rent-a-cab scheme operator means any service provided to any person, by a rent a cab scheme operator in relation to the value of taxable service in relation to the service provided by a Rent-a-cab scheme operator to any person, shall be the gross amount charged by such operator from such person for services in relation to the renting of a cab and includes such rental. 3.4 The value of taxable service in relation to the service provided by a Rent-a-cab scheme operator to any customer, shall be the gross amount charged by such operator from such customer for services in relation to the renting of a cab and include the rental so charged. Any other charges billed to the customer such as processing charges, administrative fees, charges for providing extra accessories or providing other value added services such as a provision of driver etc. shall also be includible in the gross amount chargeable to service tax. 3.5 However service tax will not be payable in cases where a....
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....ovide complete guidance to the new assessees so that all relevant information is made available to them at one place. The field officers are also requested to kindly provide all assistance and guidance to the new assessees in explaining the provisions of service tax and in clarifying their doubts. All possible steps may kindly be taken by the Commissioners to facilitate smooth implementation of the imposition of service tax on the above services. 4.3 The commissioners are requested to give wide publicity to the fact that the service tax on the above two services will come into force from 16th July, 1997. They should also give suitable publicity through newspapers and through the associations of trade immediately to apprise them about the provisions of law and procedures to be followed. 4.4 It has been decided that for all the Commissionerates, the concerned Commissioner having jurisdiction in central excise matters will have corresponding jurisdiction for service tax matters. This applies to Commissionerates in Mumbai and Calcutta as well (Order No. 4/1/97-Service Tax (3) dated 11th July, 1997 refers). Yours faithfully, Sd/- (T.R. Rustagi) Tel: 3012687 17. It can be ....
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....e being rendered by the appellant, circular issued by CBE&C would be binding on the lower authorities. 20. We find that as correctly pointed out by ld. Counsel that judgment of Hon'ble High Court of Punjab & Haryana in the case of Kulcip Medicines (P.) Ltd. (supra) will specifically cover the issue. With respect, we may reproduce the relevant paragraph from the judgment of Hon'ble High Court : "11. The question which falls for consideration is whether word 'and' used after the word 'clearing' but before the word 'forwarding' at two places in clause (j) be considered in a conjunctive sense or disinjunctive sense. It appears to be fairly well-settled that the context and intention of legislature are the guiding principles. In that regard reliance may be placed on the judgment of Hon'ble the Supreme Court in the case of Mazagaon Dock Ltd. v. CIT [1958] 34 ITR 368. By necessary intendment the expression 'a clearing and forwarding agent in relation to clearing and forwarding operations, in any manner' contemplates only one person rendering service as 'clearing and forwarding agent' in relation to 'clearing and forwarding operatio....
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....1996 (87) E.L.T. 19 (S.C) and Paper Products Ltd. v. Commissioner of Central Excise - 1999 (112) E.L.T. 765 (S.C.) = [1999] 7 SCC 84. If the aforesaid principle is applied to the facts of the present case there does not remain any doubt that the circular issued by the Board is to be considered as binding and cannot be deviated even by the department. On that account also the expression 'clearing and forwarding agent' have to be interpreted in the light of the circular." 21. Yet, in another case of Karamchand Thapar & Bros. (Coal Sales) Ltd. (supra) Hon'ble High Court of Calcutta, in their judgment dt.22.7.09 had held as under: "64. The real test of taxable service as clearing and forwarding agent is whether the activity includes inter alia receiving the goods from the factories or the premises of the principal or his agents, warehousing the goods, receiving despatch order from the principal, arranging despatch of goods as per the directions of the principal by engaging transport of his own or through the authorised transporters of the principal, maintaining records of the receipt and despatch of goods and the stock available at the warehouse. 65. In any case, the exp....