TaxTMI 
TaxTMI 
2017 (12) TMI 1098
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion of the Tribunal in the case of Sandoz Impex Ltd. Vs. Commissioner of Service Tax 2011 (23) STR 520. The CBEC &C Circular No.B-43/7/97-TRU dt. 11.7.1997. The demand was again confirmed by the Commissioner (Appeals) classifying the service as Clearing and Forwarding Agent Service. 2.1. The Ld. Counsel pointed out that the activity undertaken by them are as follows: "The range of activates undertaken by the Appellant encompasses:- i. Follow up on behalf of the State Electricity Boards (SEBs), between the colleries and railways, to ensure proper linkage as fixed by the Linkage Committee; ii. Monitoring and witnessing loading of coal of specified sizse and grade and minimizing shortage in loading; iii. Observing and reporting to the SEBs about the optimum quantity supplied, weighment, necessary documentation, proper sampling and analysis of coal etc. There are incidental duties of the appellant to ensure the above work whereby, i. Appellant has to ensure that the wagon/rakes booked by the client are not diverted by Railway Authorities. ii. Appellant also require to carry on the supervision of the activities of coal company regard....
X X X X Extracts X X X X
X X X X Extracts X X X X
....her receiving the goods nor warehousing the goods, nor preparing any invoice on behalf of the principal. Hence, appellant is not involved in providing any clearing and forwarding agent's service. 2.5. Ld. Counsel argued that the Revenue has relied on the words "directly or indirectly" appearing in the definition of term clearing and forwarding agent which reads as follows: "any person who is engaged in providing any service, either directly or indirectly, connected with clearing and forwarding operations in any manner to any other person and includes as consignment agent." He argued that that the term "directly or indirectly" has been interpreted by the Hon'ble Apex Court in the case of Navin Chemicals Mfg. and Trading Co. Ltd. Vs. Collector of Customs 1993 (68) E.L.T. 3 (S.C.), wherein it has been held that the phrase "relation to" is ordinarily of wide import, it must be read as meaning a direct or proximate relationship to the rate of duty and to the value of goods for the purpose of assessment. He argued that the activities conducted by the appellant cannot be called "directly or indirectly" connected with clearing and forwarding operations. 2.6. Ld. Counsel a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... through the authorized transporters of the principal; (v) maintaining records of the receipt and despatch of goods and the stock available at the warehouse; and (vi) preparing invoices on behalf of the principal. 3.1. Learned AR further argued that the term 'directly or indirectly' in relation to has been examined by Hon'ble High Court of Allahabad in the case of Touraids (I) Travel Services Vs. Commissioner of Central Excise - 2014 (35) STR 234 (All.) in paras 28 to 31 are as follows: "28. The Apex Court in the case of Doypack Systems Pvt. Ltd. v. Union of India and Others, reported in 1988 (36) E.L.T. 201 (S.C.), while dealing with similar situation has observed thus: "The expressions "pertaining to", "in relation to" and "arising out of used in the deeming provision, are used in the expansive sense. The expression "arising out of has been used in the sense that it comprises purchase of shares and lands from income arising out of the Kanpur Undertaking. The words 'Pertaining to' and 'in relation to' have the same wide meaning and have been used interchangeably for among other reasons which may include avoidance of repetition of the same phrase in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lating to" has been held to be equivalent to or synonymous with as to 'concerning with' and 'pertaining to'. The expression 'pertaining to' is an expression of expansion and not of contraction." 3.2. Ld. AR argued that decision in the case of Coal Handlers Pvt. Ltd. (supra) only examines the definition of the term clearing and forwarding agent but does not deal with the nature of services that are taxable. He argued that all services provided by Clearing and Forwarding Agent would be taxable. 4. We have gone through the rival submissions. The term Clearing and Forwarding Agent has been defined under Section 65(25) of the Act as follows: "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." This definition has been interpreted by Hon'ble Apex Court in the case of Coal Handlers Pvt. Ltd. (supra) and Hon'ble Apex Court held as follows: 10. It would be relevant to point out the definition of 'forwarding agent', as known in legal parlance, from Black's Law Dictionary (Seventh Editio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....role of the person concerned, and any course of dealing between the parties will be relevant factors. Persons properly described as shipping and forwarding agents frequently act as carriers themselves with respect to part of the carriage, for example, by performing collection and delivery services between the customers' premises, their own depots, and warehouses, docks and carriers' depots. In such cases they would have the rights and duties of carriers with respect to such carriage as they undertake personally, but the rights and duties of forwarding agents with respect to the remainder of the transit. 443. Rights and liabilities of forwarding agents. - The rights and liabilities of a forwarding agent are governed by the general principles of the law of agency : and so he is entitled to be indemnified against all expenses incurred on behalf of his principal and to be paid his proper charges for his services. He is liable for failure to make proper arrangements for the carriage and for ancillary matters which he has undertaken, such as Customs clearance. He is not liable for the failings of persons with whom he makes contracts on behalf of his principal, unless he....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the principal from the supplier of the coal (which would mean collieries in the present case) and thereafter dispatching/forwarding the said coal to different destinations as per the instructions of the principal. In the process, it may include warehousing of the goods so cleared, receiving dispatch orders from the principal, arranging dispatch of the goods as per the instructions of the principal by engaging transport on his own or through the transporters of the principal, maintaining records of the receipt and dispatch of the goods and the stock available on the warehouses and preparing invoices on behalf of the principal. The Larger Bench rightly enumerated these activities which the C&F Agent is supposed to perform." It is apparent from the decision of Hon'ble Apex Court that the first thing that needs determination is and if the service provider is "Clearing and Forwarding Agent." In para 11 of the aforesaid order, the Hon'ble Apex Court has observed that an essential ingredients of the C & F service is getting the coal cleared as an agent on behalf of the principal from the suppliers of coal. From the activities of the appellant as mentioned in the show cause notice a....