TaxTMI 
TaxTMI 
2015 (7) TMI 554
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....he Assessee were registered with service tax authorities under the category of Business Auxiliary Service as Commission Agent . A Show Cause Notice dt.13.04.2006 was issued proposing demand of service tax of Rs. 5,27,103.00 along with interest and to impose penalty considering the services rendered by the Assessee would be covered under the category of Clearing and Forwarding Agent service as defined under Section 65 of the Finance Act, 1994 during the period from 01.10.2000 to 31.03.2005. The Adjudicating authority confirmed the demand of service tax along with interest and imposed penalty of equal amount of tax. The Commissioner (Appeals) vide OIA dt.28.12.2006 allowed the appeal filed by the Assessee and set aside the Adjudication order.....
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....from the agreement. 4. The learned Advocate on behalf of the Assessee particularly drew the attention of the Bench to the Clause (6) of the agreement. It is submitted that the Clause (6) clearly shows that the Assessee has to arrange sale of the goods and the other activities as shown in the agreement are incidental to the sale of the goods. He submits that the Commissioner (Appeals) has rightly set aside the Adjudication order. It is submitted that the present case is squarely covered in favour of the Assessee by the decision of the Tribunal in the case of CCE Bangalore Vs Transasia Sales Syndicate - 2007 (8) STR 467 (Tri-Bang), which has been upheld by Hon ble Supreme Court as reported in 2014 (33) STR J 126 (SC). He furthe....
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....er referred to as The Company ). The learned Advocate on behalf of the Assessee placed a copy of the agreement with letter dt.29.11.2000 of M/s The Lakshmi Mills Company Limited, before the Bench. On perusal of the agreement dt.01.04.1999, we find that M/s The Lakshmi Mills Company Ltd, was engaged in the manufacture and selling of yarn of various qualities and counts. The Company has set up Sales Depot at 74, New Cloth Market, O/s. Raipur Gate, Ahmedabad 380 002 to improve their sales. The Assessee herein, was appointed as a Depot Manager to manage the sales depot efficiently and to market the yarn, manufactured by the Company. For the purpose of proper appreciation of the case, the relevant portions of the agreement are reproduced below:-....
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....rwarding Agent under Clause (25) of Section 65 of the Finance Act, 1994, as it stood during the relevant period, is reproduced below:- "Clearing and Forwarding Agent means 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." 6.1 With effect from 01.07.2003, the service tax was levied under the category of Business Auxiliary Service. On 10.07.2004, the definition of Commission Agent was incorporated in the Explanation (a) under sub-clause (vii) of clause (19) of Section 65. It states that - "Commission Agent means any person who acts on behalf of another person and causes sale or pu....
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....mmission Agent. 8. We find from the agreement that it is not a Commission Agent agreement. In other words, it is a Depot Agreement between the Company and the Assessee. Upon perusal of the letter dt.29.11.2000 of the Company, it is addressed as The Lakshmi Mills Company Limited, Sales Depot, C/o M/s Viral Makers Ltd, 74, New Cloth Market, O/s. Raipur Gate, Ahmedabad 380 002 . It is clearly evident that the activities of the Assessee would be termed as Sales Depot of the Company. On reading of the agreement as a whole, we find that the Assessee were engaged in maintaining the sales depot of the Company efficiently and to market the yarn manufactured by the Company. The Company appointed the Assessee as a Depot Manager to be in-charge of t....
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....he decision of Mahavir Generics (supra), we find that the Principal has agreed to appoint the agent as a consignment agent for the sale of the product . In the present case, the Principal engaged the Assessee as a Depot Manager and not as Consignment Agent and therefore, the said case law would not be applicable in the present case. It is also argued that the activities of the Clearing and Forwarding Agent service are absent in the agreement and relied upon the decision in the case of Kulcip Medicines (P) Ltd (supra) of the Hon ble Punjab & Haryana High Court and the decision of Hon ble Supreme Court in the case of Coal Handleres Pvt. Ltd (supra). 10. On plain reading of the agreement and particularly the clauses (1) to (5) of the agreem....