TaxTMI 
TaxTMI 
2013 (8) TMI 296
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....the respondent is not rendering clearing and forwarding service as per Section 65(a) of the Finance Act, 1994 and hence, the levy and demand of service tax is unsutainable? 2. The Tribunal allowed the assessee's appeal pointing out that the consignments of sale were brought by the Principal to the premises of the assessee for auction and that the assessee did not clear the consignments from its premises. After the sale, the goods delivered to the buyer at the sales premises itself by the owner/ Principal. As such there was no forwarding took place. Referring to the decision reported in 2004 (170) ELT 78 MAHAVIR GENERIC v. CCE, the Tribunal held that the assessee was not doing forwarding services and consequently, there was no liability to pay the service tax. 3. It is seen from the facts narrated that the respondent herein is a registered Co-operative Society formed with the object of improvement of tapioca cultivation and tapioca sago and starch industry and of the economic condition of tapioca cultivators and sago and starch manufacturers in the area of operation mentioned. Since the issue raised in this appeal related to the chargeability of the transactions to service....
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.... to the members, wherein, deductions were made towards advance paid, interest payable, godown services charges, godown rent, unloading charges, marking charges, bank service charges and courier charges etc. According to the assessee, it acted as agent between the members and buyers; provided warehousing the starch and sago in the godown; gave advance money to the members before sale if so requested by the members. It facilitated calling of tenders from the buyers. Given the nature of the service thus provided, the assessee contested that they could not be characterised as clearing and forwarding agent to fall under sub section (23) of Section 65 of Finance Act, 1994. 6. The claim of the assessee that the activity of the assessee did not fit in with the understanding of the clearing and forwarding agency, was, however, rejected by the Assessing Officer in a very detailed manner. The said Officer pointed out that the Society effected sales only after obtaining the concurrence of the principal; they maintained the records for receipts, despatches and the stock available with them in the warehouse. Thus, the assessee was undertaking all the activities normally undertaken by the clea....
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.... Board of Excise and Customs in F.No. B/43/ 7 / 97 TRU dated 11.7.1997, which categorised the various activities normally undertaken by the clearing and forwarding agents and the one by the assessee, which read as follows:- Category of Activities mentioned in the CBED Cir. Dt. 11.7.1997 Activities undertaken by the appellant Receiving the goods from the factories or premises of the principal or his agents Appellants have received the goods from the manufacturers / members of the society Warehousing Appellants have warehoused the goods received from its members. Receiving despatch orders from the Principal Arranging despatch of goods as per the directions of the principal by engaging transport on his own or through the authorised transporters of the principal. Only on confirmation of the highest bid amount from its members for the goods tendered in auction, the appellants inform the buyers to take delivery of the said goods. It is seen from the records that the appellants are directly despatching the goods by issuing invoices but the buyers engage transport themselves Maintaining records of the receipt and despatch of goods and the stock available in....
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....n hand. Hence, the Tribunal misdirected itself in granting the relief to the assessee. He took us through the order in original which dealt with the various aspects of the activities rendered by the assessee and looking on the totality of the facts herein, the assessee is liable to be treated as clearing and forwarding agents only and not as provider of storage facilities. 11. Per contra, learned counsel appearing for the assessee submitted that on the face of the findings of the Tribunal that the assessee had not rendered any service of clearing and forwarding, the order of the Tribunal does not call for any interference. He further pointed out that subsequent to the decision of the Tribunal, the Revenue issued a notice on 20.9.2007 to the assessee, proposing to treat the transactions for the period 1.5.2006 to 31.3.2007 as that of auctioneering service in terms of Clause (105) to Section 65 of Finance Act, 1994, brought in by Finance Act, 2006. Thus going by the contradictions in the stand taken by the Revenue, the appeal lacks merit. He further pointed out that the nature of activity undertaken by the assessee is clearly spelt out in the order of the Assessing Officer; howeve....
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....aw arises for consideration in this appeal. 14. As far as the contention of the assessee based on Section 65A (2) (b) of the Finance Act is concerned, we find that as per Section 65A(2) of the Finance Act, when a taxable service, is prima facie, classifiable under two or more sub clauses of clause (105) of Section 65, classification shall be effected as follows:- (a) the sub-clause which provides the most specific description shall be preferred to sub-clauses providing a more general description; (b) composite services consisting of a combination of different services which cannot be classified in the manner specified in clause (a), shall be classified as if they consisted of a service which gives them their essential character, insofar as this criterion is applicable; (c)........... 15. The case of the Department is that the nature of services accepted by the assessee included receiving of goods from the Principal, warehousing of the goods, receiving the dispatched orders from the Principal, arranging dispatch of goods as per the directions of the Principal, maintaining records of the receipt and dispatch of goods and the stock available at the warehouse and prepari....
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....us, when the burden is on the Revenue to prove that the assessee, in fact, received the goods from the premises of the Principal and arranged despatch of goods as per the directions of the Principal by engaging transporter on its own or through various transporters, we have no hesitation in accepting the submission of the assessee that the nature of transactions viz., despatching of goods and offering storage facilities by the assessee, does not fit in with the criteria given in the circular to treat the assessee as a clearing and forwarding agent. As pointed out by the learned counsel appearing for the assessee, the nature of activity is a composite one, enabling the Principal to bring the products to the assessee's premises and the assessee giving financial facility to the members, so that, ultimately on the sale of sago, on the receipts received by the assessee on behalf of the Principal, the same was settled after deducting whatever amounts were due to the assessee on the advance payment made by the assessee to the principal. Thus, providing a platform for the sellers and buyers to meet in a common place, providing a storage facility to the manufacturer, the financial help ....