2005 (1) TMI 423

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....fter referred to as M/s. IPCL). In the capacity of the C&F Agents, they receive goods from M/s. IPCL for forwarding the same to the buyers. They receive service charges/commission for Godown sales and PDA sales. PDA sale means a transaction where customer books directly from M/s. IPCL for the benefit of free delivery of goods. On the PDA sales, the appellant receive charges of Rs. 250 per MT. On these charges, no Service Tax has been paid. The appellants submitted that these charges are on account of their acting as 'Del Credere Agent for M/s. IPCL. It was clarified that in respect of PDA sales, they ensure, as per their agreement with M/s. IPCL, that the payments are collected in time from their customers and in case of any delayed payment....

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....y of the purchaser and his performance of the contract. Such a factor is called a "del credere agent". He is a mere surety, liable to his principal only in case the purchaser makes default. Agent who is obligated to indemnify his principal in event of loss to principal as result of credit extended by agent to third party. (Source: Black's Law Dictionary - 6th Edition) Del credere : Of on pertaining to the obligation to make good a loss arising from failure of a purchaser to pay, undertaken by (a) a sales agent with respect to his or her principal, or (b) any assignor with respect to one who buys or advances cash against the assignor's accounts receivable. Under (b); when the goods are sold or shipped, the accounts may be formally assigne....