2013 (5) TMI 930

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...., Mumbai, was appointed by M/s. Larsen & Toubro Komatsu Ltd., Bangalore as their agent/distributor for marketing, selling or promoting to sell the products manufactured by the latter. They were appointed as exclusive agent to market the equipment manufactured by L & T Komatsu Ltd. and provide product support for the equipment. For undertaking the said services, M/s. L & T Komatsu Ltd. agreed to pay agency commission to M/s. Larsen & Toubro Ltd. The department was of the view that the activity undertaken by the appellant comes under the purview of "clearing and forwarding agency services" and is liable to service tax and accordingly issued a notice dated 7-6-2004 demanding service tax amounting to Rs. 1,32,05,925/- for the period from 1-4-20....

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....ench of the Tribunal in the appellant's own case reported in 2006 (3) S.T.R. 321 (Tri.-LB) wherein this Tribunal held that procuring purchase orders from the vendor on commission basis would not amount to "clearing and forwarding agency service" and comes under the category of Business Auxiliary Service. The ratio of the said decision applies to the facts of the present case and accordingly, he pleads for setting aside the impugned order and allowing the appeal. 4. The ld. Additional Commissioner (AR) appearing for the Revenue on the other hand submits that the appellant as a distributor would be required to handle the goods and therefore, the said activity would come under the purview of "Clearing and Forwarding Agency service". He....

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.... the equipment and L & T accepts such appointment". As per the Article 3.1, for the services rendered by L & T towards sales and service of equipment in territory A, L & T Komatsu shall pay agency commissions to L & T, and the rate and other terms shall be as stipulated in Annex B to the agreement". 6. From the various clauses of the agreement, it is seen that the appellant has been appointed as marketing agent to promote the sale of the products manufactured by L & T Komatsu Ltd. There is no indication, whatsoever in the agreement that the appellant has undertaken clearing and forwarding functions. Reliance placed by the Revenue on the Prabhat Zarda Factory (India) Ltd. case also shows that the activity undertaken by the appellant ....