TaxTMI 
TaxTMI 
2019 (11) TMI 1166
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....of Show Cause Notice dated 20.02.2015. 2. Brief facts of the case are that the appellant is registered with the service tax department for services falling under the category of "clearing and forwarding agent" and Goods Transport Agency(GTA) service and paying service tax as per the rate prescribed under the Act read with Service Tax Rules, 1994 (for short "Rules‟). During the course of audit by the department, it was observed that the appellant had entered into an agreement dated 10.11.2011 (the First Agreement) with its principal Akzo Nobel India Limited (for short "Akzo‟) who appointed it as clearing and forwarding agent. Later on M/s Akzo and the appellant entered into another agreement with effect from 01.01.2013 and valid up to 31.12.2012 for providing GTA service, which as per the Department was with intention to not to pay the full service tax on C & F Agent service in terms of First Agreement. 3. It is the contention of the Revenue that the Second Agreement has been entered into by the appellant with Akzo during the validity of First Agreement in order to avoid payment of service tax on C & F service, hence it appeared that the Second Agreement was with s....
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....art of freight agreement dated 01.01.2013 , second agreement. It is only afer the agreement the appellant started transportation of consignment apart from C & F agreement. 4.2 Ld. Advocate further submitted that as per trade notice No. 87-97/ST Transportation Service was liable to service tax under reversed charge at the hand of the consigner or consignee, even when these services were procured by C & F agent. And, accordingly, no fresh liability of service tax can be imposed on the appellant as Akzo as already been discharged applicable service tax under reversed charge in accordance with the provisions of Finance Act and Rules. 4.3 Ld. Advocate further placed reliance on the Trade Notice 87/97 dated 14/07/1997 issued by Madurai, Commissionerate and also CBEC Circular B-11/1/2002/TRU dated 01.08.2002. 4.4 Ld. Advocate also placed reliance on the following case laws; i. Coal Handlers Pvt Ltd. vs CCE, [2015 (38) STR 897 (SC)] ii. E V Mathai & Co. vs. CCE, [2003 (157) ELT 101(Tri.-Bang.)] iii. Toll India Logistics Pvt Ltd. vs CCE, Final Order No. 40503/2018 iv. Ashok Agarwal vs. CCE, [2012 (28) STR 362(Tri.-Del.)] v. United Shippe....
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....reversed charge and also the question involved interpretation of law. Further, the whole exercise would also be revenue neutral in view of available credit to the Akzo on the service tax paid by the appellant. Accordingly, the demand for January, 2013 to March 2013 was also pleaded to be time barred. 4.9 Ld. Advocate also submitted that the show cause notice has been issued in wake of service tax audit, which was declared to be unconstitutional view of the decision of Hon‟ble Delhi High Court in case of Mega Cabs Pvt ltd. vs. Union of India [2016 (43) STR 67 (DEL] even though the decision was stayed by the Hon‟ble Supreme Court in [2016 (44) STR J277 (SC)]. It is also submitted that the law on stay order in case of ultravires provisions is well settled and that will not make the provisions declared to be ultra vires as intra vires placing reliance on the decision of Shree Chamundi Mopends Ltd. vs Church of South India Thrust Association Madras [AIR 1992 SC 1439] and Pijush Kanti Chowdhry vs. State of West Bangal [2007 SCC Online Cal 267]. It was further stated that the adjudicating authority should have refrained from passing the impugned order after the disposa....
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....t only receives and store such goods when delivered to them and thereafter forward the same by way of sale or otherwise as per the direction of principal. They do not provided any service of clearing hence the service provided by the assessee was not classifiable under C & F service. The present case was stated to be different from that of Rakesh Ahuja (supra) as the appellant is already registered and paying service tax under Clearing and Forwarding Agent Service from 2011. The appellant herein tried to separate their earlier activity under Second agreement dated 01.01.2013 by transport agreement, which is a part of existing C & F service. 5.2 Ld. DR also submitted that Territory Freight Agreement (second agreement dated 01.01.2013) provided for local freight charges at the rate of Rs. 1.09 per liter, Faridabad freight charges at the rate of Rs. 1.14 per Kg, country freight charges at the rate of Rs. 2.026 per Kg and labour charges for tertiary charges at the rate of Rs. 16,500 per month, will not fall under GTA services. In view of the rate fixed for various mode of transport, such as Mahindra Pickup, Tata 407, Tata 909, Tata 1109, Tata 1114, Tata 2515 for quantity of 1 M....
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....sport activity is of independent activity falling under GTA service. And therefore, the service tax is required to be paid on the gross amount along with interest and penalty. 6. In rejoinder to the submissions made by the ld. DR, ld. Advocate submitted that the reliance placed in the case of M/s Singh Trading Company (supra) is not applicable in the fact and circumstance of the case on the ground that the issue in that case was of rendering both C & F agent and transportation services from inception and the appellant was also discharging service tax on the entire value under the service category of C & F service. However, on the later date, the said assessee artificially bifurcated the value into two invoices one for transportation of service and other for the balance amount. Further there is specific finding in para 7 that the said decision appellant that did not satisfy the requirement of GTA. It was submitted that the appellant in this case has started rendering transport service from 1.01.2013, only when new division for the transportation services was set up and separate freight agreement was signed. However, till 01.01.2013, the appellant was only engaged in storing ....
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....ges, if any, in respect of the Products consigned. No claims of the C&FC with regards short delivery / loss / damage shall be entertained by the Company and the C&FC shall be solely responsible to make goods such losses to the Company, unless such claims are accompanied by short delivery / loss / damage certificate from the carriers. 2.2......... 2.3.......... 2.4.......... 2.5 The C&FC undertakes to forward the Products in the company‟s name in such quantities and in such manner and to such addresses as the Company may instruct from time to time. The Products shall be forwarded only against the Company‟s delivery advises duly signed by the Company‟s authorized personnel. The Company shall, from time to time, forward to the C&FC a list of names and specimen signatures of such authorized personnel. The C&FC shall not make any representation and / or give any warranty or guarantee in respect of the Products. 2.6 The C&FC undertakes to commence forwarding the Products upon receipt of the Company‟s delivery order within reasonable time and not later than 12 hours in any event. The C&FC undertakes to indemnify and keep....
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....ch may occur arising out of such transportation either during transit or otherwise. THE SECOND AGREEMENT DATED O1.01.2013 Whereas The company is desirous of engaging the services (defined in Article 2 below) of the Contractor to transport its paint products, particulars of which are set out in Exhibit A below(the "products") to its customers and the Contractor is desirous of accepting such engagement. IT IS AGREED AS FOLLOWS A) TERMS AND CONDITIONS i)..... ii) The freight rate mentioned, the company shall reimburse the transporter, against proof of payment, octroi duty or other municipal or local levies as are lawfully payable including agreed incidental charges on such levies in respect of products materials carried by the transporters n the company‟s behalf. In case road permits, police permission, toll etc., required for the transport of consignments/special consignments, it will be entirely the transporters responsibility to arrange the same at his cost. iii) The transporter will be required to carry on occasion mixed loads to combined destination in different Municipal limits. iv)........ ....
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...., it is evident that the second agreement is offer for GTA service for the first time after execution of the second agreement which is specific to the transportation of the goods of the principal as per their direction. Therefore, the first agreement cannot be treated as a part of the second agreement as contended by the Revenue. In this regard, we also find that both the agreement has to be read in whole which is complete in itself. The first agreement relates to C & F Agent service. The CBEC trade notice No. 87/97 dated 14/07/1997 clarified that C & F agent normally undertakes following activities: a. Receiving the goods from factory or premises of the principal of the agent; b. Warehousing these goods; c. Receiving dispatch orders from the principal; d. Arranging dispatch of goods as per the direction of the principal by engaging transport on his own or through the authorised transporters of the principal. 9. The above trade notice makes it clear that the C & F agent‟s responsibility is restricted to arranging dispatch of goods as per the direction of the principal by engaging transport of his own or through third party transporter as....
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....Tata Tea Ltd., wherein as per the appellants request the remuneration for C&F work is enhanced from Rs. 5000/- to Rs. 7000/- with effect from 1-1-2001 and valid till 31-3-2003. The value of taxable service rendered by a C&F agent is the gross amount charged by such agent from the client for the service of clearing and forwarding operations in any manner. The Service Tax will be computed on the gross amount of remuneration or commission paid to the C&F agent by the principal engaging such an agent. Further this commission/remuneration can be on the basis of a minimum on a flat rate or turnover basis depending on the consignments handled. It can also be variable based on performance. The appellant is found to be receiving for the C&F service provided by him to M/s. Tata Tea and Consolidated Coffee. As such Service Tax is to be levied only on this remuneration and not on transportation which is a separate activity governed by a separate agreement. In view of the observations, I pass the following order." 12. The two agreements have been perused by us very critically and we find that there is no interlinkages between the two, the first agreement was exclusively for C & F agent ....
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.... the term "agriculture produce" is given under the storage and warehousing services) or for goods meant to be stored in cold storage have been exempted from the levy of service tax. 4. A point has been raised as to what would be the value of service tax in a case where transport and cargo handling service is provided in a composite manner. The measure of tax is the gross amount charged by the cargo handling agency from the customer. Therefore, if lumpsum amount is charged for both transportation and cargo handling, the tax will be payable on the entire amount. On the other hand, if the bill indicates the amount charged for cargo handling and transportation separately on actual basis (verified by documentary evidence), then the tax would be leviable only on the cargo handling charges. 13. The appellant has submitted CA certificate and the relevant ledger on the direction of Bench which has also perused by us and perusal thereof leaves no room for any doubt regarding separate treatment for amount collected for C & F services and transportation services in their ledger and other books of accounts. We also perused the invoices with respect to both the services and find the ....
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....to the recipient of service]. Explanation.- For the purposes of this rule and the second proviso to rule 4A, "consignment note" means a document, issued by a goods transport agency against the receipt of goods for the purpose of transport of goods by road in a goods carriage, which is serially numbered, and contains the name of the consignor and consignee, registration number of the goods carriage in which the goods are transported, details of the goods transported, details of the place of origin and destination, person liable for paying service tax whether consignor, consignee or the goods transport agency. 14. From the above reproduced statutory provisions it is clear that the appellant has disclosed the levy of service tax on the basis of weight of consignment except distance covered in kilometres mentioned therein. The consignment note issued by the appellant appears to contain all the relevant information including the payment of service tax by consigner but for the actual amount which is written as TBB (to be billed). The appellant by arrangement with their principal has decided to have monthly settlement of transport bill consignment wise which is also evident from the le....