AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (6) TMI 645
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....p on commission basis. HLL were availing of GTA services of various transport agencies and were paying service tax wherever applicable. The department took the view that the services provided by HLL to Bunge are wrongly classified under 'Business Auxiliary Service' (BAS) instead of 'Clearing and Forwarding Agency Service' (C&F) for the period 01.04.2003 to 08.07.2004 & 01.01.2005 to 31.03.2008. So also it appeared to the department that the total freight paid by the appellant as shown in the ledger amount for the years January 2005 to March 2008 was much higher than the taxable value reflected in the ST-3 returns. In a SCN dated 21.10.2008, a service tax demand of Rs. 34,00,649/with interest, on C&F services was proposed against HLL. The SCN also proposed a demand of service tax of Rs. 3,51,99,515/- with interest on GTA services and proposed imposition of penalties under Section 76 & 78 of the Finance Act, 1994. In adjudication, vide the impugned order No. 17/2010 dated 24.02.2010, the Commissioner extended the cum-tax benefit in respect of the demand proposed on C & F service and restricted the demand to Rs. 31,48,749/- with interest. The demand of service tax of R....
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....ibutors P.Ltd.-2014 (36) STR 93 (T) g. Chandan Chemicals-2007 (7) STR 578 (T) 2.2 In respect of tax demand on GTA services, Ld. Counsel made the following submissions:- i) That the audit party had taken incorrect figures from the Trial balance and the same was adopted in the SCN also. Further, there are certain computation errors also. ii) That as per Accounting Standard AS-29 (reporting of contingent liabilities and contingent assets), it is statutory requirement to make provision interalia for unpaid liability of GTA services in the financial statements and the liability in the financial ledger would reflect payments for the current year and also provisions made for unpaid liability. iii) That trail balance were showing all figures of on account freight, whether it was paid or unpaid, whereas ST-3 Returns were showing only those figures of freight which were paid to the transporters and on which service tax was payable/paid. iv) That during the disputed period, under Rule 6 of STR, service tax was payable only on receipt of payment for the service provided and /or on making payment to the service provider. v) Further, there was exemption payment of service tax if the....
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....earing and Forwarding Agent". The definition of the commission agent, during the relevant period, formed part of the Explanation 2 under Section 65 (19) of the Finance Act, 1994, as under:- "Explanation. - For the removal of doubts, it is hereby declared that for the purposes of this clause, - (a) "commission agent" means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person - (i) deals with goods or services or documents of title to such goods or services; or (ii) collects payment of sale price of such goods or services; or (iii) guarantees for collection or payment for such goods or services; or (iv) undertakes any activities relating to such sale or purchase of such goods or services" 5.2 On the other hand, clearing and forwarding agent service was defined in Section 65 of Finance Act, 1994, as under:- "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....
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....ngee This being so, we are unable to appreciate the reasoning of the lower authority that the activities of the appellants are in the nature of "consignment agent and would therefore fall within the scope of C&F agents service". 5.4 The adjudicating authority has placed reliance on the CBEC Circular dated 11.07.1997, wherein it has been indicated that C&F agents normally under takes the following activities:- i) Receiving the goods from the factories or premises of the principal or his agent. ii) Warehousing these goods. iii) Receiving despatch orders from the principal iv) Arranging despatch of goods as per the directions of the principal by engaging transport on his own or through the authorized transporters of the principal. v) Maintaining records of the receipt and despatch of goods and the stock available at the warehouse. vi) Preparing invoices on behalf of the principal 5.5 The adjudicating authority has also opined that the activities of HLL are not limited to procurement of order but extended much beyond and therefore their activities would necessarily come under C&F Agent's service. 5.6 True, there are some similarities in the nature of activities done ....
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....o clearing and forwarding operations, in any manner' contemplates only one person rendering service as 'clearing and forwarding agent' in relation to 'clearing and forwarding operations'. To say that if, one person has rendered service as 'forwarding agent' without rendering any service as 'clearing agent' and he be deemed to have rendered both services would amount to replacing the conjunctive 'and' by a disjunctive which is not possible. The counsel for the revenue has not been able to bring on record any material to show the word 'and' should be construed as disjunctive. He has not shown any 'trade practice' which may lead to a necessary inference that service of one kind rendered by one is invariably considered to comprise both. No argument has been advanced before us by him to canvass that the legislature intention is discernible from the scheme of the statute or from any other relevant material. Therefore the word 'and' should be understood in a conjunctive sense. (See Maharaja Sir Pateshwari Prasad Singh v. State of U.P.(1963) 50 ITR 731). In these circumstances if we read the word 'and' as '....