AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2008 (4) TMI 167
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....ct Show Cause Notice 25-9-2001 26-2-2004 Order-in-Original No. & Date 2/2004 dated 11-1-2004 27/2004 dated 31-5-2004 Impugned Order-in-Appeal date 2/2005 dated 30-11-2005 1&2/06 dated 30-1-2006 Period of Dispute 1-9-1999 - 31-7-2001 1-8-2001 - 31-1-2004 Period within limitation April 2000 - July 2001 October 2002 - Jan 2004 3. Shri C. Shivadass and C. Venkatesh learned Advocates, appeared on behalf of the appellants and Shri R.P. Raheja, learned JCDR, for the Revenue. 4. We heard both sides. 5. The learned Advocates for the appellants stated that the appellant M/s. Cairn Energy is one of the 'Participants' of a Joint Venture engaged in the exploration and development of Petroleum resources particularly for Ravva field. There is a Production Sharing Contract entered between the Joint Venture and also the President of India and the Participants. The Participants have chosen the appellant to operate the facilities in the Ravva held on behalf of the other Participants under Joint Operating Agreement (JOA) dated 28-10-1994. The Petroleum Sharing Contract provides that the facilities constructed to implement the PSC like huge storage tanks can be made available to P....
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....hri G. Shivadass reiterated that the appellants are simply providing storage service and then the oil stored is transported by pipeline to the oil tankers that the oil tankers carry the oil to the refinery, which is actually the consignee of M/s. ONGC. They say the function of the appellant is only to store the crude oil received and then transport it through the pipeline. They cannot be considered as clearing and forwarding agents. He invited our attention to the definition of Taxable Service in the Finance Act, 1994 and also the following Trade Notices. (a) Trade Notice 59/1999 dated 4-10-1999 issued by Mumbai Commissionerate (b) Boards's Clarification dated 24-4-2002 issued vide File No. 137/04/2002-CX.4 and also Board' s following circular : (c) Circular No. 39/2/2002, dated 20-2-2002 and Circular No. 73/3/2004 -ST, dated 5-1-2004. 7. In terms of the above Circulars and Clarification it was submitted that the appellant is no concerned with clearing of any goods. The crude oil is delivered to the appellant at its tank. Further the appellant does not forward the said Crude to any customer of ONGC. As can be seen from the agreement and invoices raised by the appellant the Crud....
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....x. It was submitted that even if the appellant is taxable under C & F Agency, it can be charged to service tax only on service charges and not reimbursements. (a) Keralam Enterprises v. CCE, CUS & ST Cochin - 2008 (9) S.T.R. 503 (Tri.-Bang.) (b) Jayalaxmi Enterprises v. CCE, Mangalore - 2008 (9) S.T.R. 19 (Tri. Bang.) (c) Scott Wilson Kirkpatrick (I) Pvt. Ltd. v. CST, Bangalore - 2007 (5) S.T.R. 118 (Tri.-Bang.) 11. The appellants were under the bona fide belief that their services are not covered under the C & F Agency service and therefore imposition of ex tended period of limitation is not justified. Had the appellant known of its ser vice tax liability they would have simply recovered it from the ONGC as it is clearly provided in the OTS Agreement in Clause 12 that all taxes as applicable will be reimbursed by ONGC. Hence, the intention to evade payment of service tax cannot be held against the appellants. (a) CCE, Bhavnagar v. Velji & Sons (Agencies) Ltd. - 2008-TIOL-68-SC-ST (b) Rajasthan Cylinders & Containers v. CCE, Jaipur - 2004 (163) E.L.T. 96 (T) - 998 (29) RLT 423 (CEGAT) (c) Hindustan Syringes Pvt. Ltd. v. CCE, New Delhi - 1998 (29) RLT 323 (CEGAT) (d) Contine....
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....s or premises of the principal or his agents; (b) Warehousing these goods; (c) Receiving despatch orders from the principal; (d) Arranging despatch of goods as per the directions of the principal by engaging transport on his own or through the authorised transporters of the principal; (e) Maintaining records of the receipt and despatch of goods and the stock available at the warehouse; (f) Preparing invoices on behalf of the principal." 15. Moreover the Board in its letter dated 24-4-2002 has also clarified the scope of the C & F Agents service and it has been specifically clarified that services rendered by agencies in relation to storage cannot be considered to be in the nature of clearing and forwarding. The said Circular is reproduced here. Order No. 2/1/2002-ST., dated 24-4-2002 issued vide F. No. 137/04/2002-CX.4 The issue is whether the activity/service of providing storage facility and charging rent, for storage of liquid cargo in tanks, can fall under the category of 'Clearing and Forwarding' operations as defined under Section 65 of Finance Act,, 1994. The main point raised by the agencies is that they are not at all rendering any clearing and forwarding services ....
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....ring and forwarding. In a typical situation clearing & forwarding agents are appointed in outstation location by manufacturers or wholesale distributors so that they may clear the goods, store them and then forward the goods according to the instructions of the Principal owner. Thus the person concerned is an agent and an agent is an authorized representative of a named principal owner. There is a contract between the principal (owner) and C & F agent detailing the terms and conditions and also indicating the commission or remuneration to which the C & F agent is entitled. 17. Further it has been clarified in Circular No. 73/3/2004-ST dated 5-1-2004 in the following manner. I am directed to say that under Section 65 of Finance Act, 1994 and as brought out by Board's letter No. F.B. 43/7/97-TRU, dated 11-7-97there must exist a relationship of principal and an agent for bringing; grain agent in the ambit of C&F agent of the farmerand in CBEC Circular No. 48/10/2002-ST, dated 13-9-2002, [2002 (145) E.L.T. T73] it has been clarified that Adhatiya's (Food grain agents) activity do not fall under the scope of Clearing and Forwarding Agents services and hence would not be liable for Se....