2007 (7) TMI 82

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....cipal on a stock transfer invoice and the goods so received were stored in godown and sold to the customers based on the price guidelines given by the principal and as per market conditions. For the sale of the goods, the respondents raise invoices indicating the value and the appropriate sales tax. The sale consideration had to be remitted to the principal within 30 days of the date of receipt of materials. For the above said activity, the respondents were receiving a commission of Rs. 1500/- per MT. Revenue proceeded against the respondents on the ground that they were rendering "Clearing & Forwarding Agents" service which is taxable under the Finance Act, 1994. Therefore, the lower authority confirmed a demand of Service Tax of Rs.26,09,....

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....er) and the agent. The Consignment Agreement dated 17-1-1998, effective from 1-1-1998, entered into by the respondent with M/s. J.K. Corp. Ltd. contain all the essential characteristics. (iv) The services rendered by the assessee fall rightly under 'C & F Agents' category and not under 'Consignment Agent' under the category of 'Business Auxiliary Service'. 4. The learned Chartered Accountant for the respondent urged the following points: (i) That the respondent is specifically covered under 'Business Auxiliary Services', which includes Commission Agent. Further, they have registered under the Service Tax under Business Auxiliary Service w.e.f. 9-7-2004 onwards. (ii) The Delhi Tribunal, in the case....

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....ly. Revenue has relied on the decision in the case of Prabhat Zarda Factory. However, the Larger Bench, in the case of Larsen & Toubro Ltd. v. CCE, Chennai - 2006 (3) S.T.R. 321 (Tri.-L.B.), has overruled the decision in the case of Prabhat Zarda Factory. Therefore, Revenue's reliance on the above mentioned decision is not of much consequence for their case. In our view, the Mahavir Generics Order has clearly brought out the distinction between 'Clearing & Forwarding Agents' and 'Consignment Agents.' A Clearing & Forwarding Agent normally arranges the despatch of goods as per the directions of the principal by engaging transport on his own or through the authorized transporters of the principal. In other words, he does n....