TaxTMI 
TaxTMI 
2023 (11) TMI 613
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....e appellant. 1.1 It is further been submitted by Learned Advocate that the Appellant do not undertake Custom House Agent Work on their own as they are not qualified for such work. However, the charges received by them from their clients are taken by them as CHA charges and appropriate amount of the service taxis paid by them of such charges and deposited with the department. 1.3 The Department entertained a view that since the Appellants are not registered a Customs House Agent with the Custom House and therefore they do not fall under the service category of Custom House Agent. However, the activity undertaken by them qualify to be classifiable under Clearing and Forwarding Agents Services. The department issued two show cause notices. The Show cause notice no, ST(Adj.)13/Gudwin/JC/07 dated 4thMay, 2007 was issued demanding Services Tax of Rs. 6,85,562/- as per the provision of Section 73 of Finance Act 1994 stating that the activity undertaken by them is rightly classifiable under services category of 'Clearing Forwarding Agents' Service. Another show cause notice dated 05.03.2008 was issued, wherein only following charges have been made: (i) their service tax regi....
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...., make payment of Freight, to the Shipping Line or Air Line, whereas, the Customers of the Appellants, make payment of Shipping Freight or Air Freight, to them and in this case, there is no handling of any goods, whatsoever by the Appellants, themselves." 2.1 On the basis of above the Learned Advocate has contended that appellant is not undertaking any work of Clearing And Forwarding Agents. It has been submitted that in their own case vide final order no A/2173-2175/2011-WZU Ahmedabad dated 15/12/2011 reported under 2012(26) S.T.R 443 (Tribunal-Ahmedabad) has been held that the activity undertaken by the appellant does, not fall under the category of Clearing And Forwarding Agent Service. 2.3 The Learned Advocate has also submitted that the commissioner (appeals) vide his above mentioned Order-In-Appeal has traveled beyond the scope of the show cause notice and Order-In-Original wherein, he has independently decides to classifiable the activity undertaken by the appellant under 'Business Auxiliary Service 'though the show cause notice has contended to classifiable the activities undertaken by the appellant under the category of 'Clearing And Forwarding Agent Service'. The Le....
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....atements which are valid and admitted by the assessees as true and correct (not retracted also) vis-a-vis their claim in the defence reply as mentioned in Para 8.2 and its sub-para above, I find that these specimen quotations, invoices and statements provide the intricate details of the nature of services rendered by them for their client. Whereas the claim made by them in their defence submission is verygeneralised in nature, say for example, in one sentence, they say that the goods are shipped and they pay the freight to shipping line. But, how these goods are shipped is explained in the recorded statements and the documents discussed above, which describes the correct and true nature of the services rendered by them. This leaves no scope of doubt or ambiguity that the assessee do handle the goods the port area as they charge for off loading of cargo from trucks, carting charges, sealing charges, empty containers shifting charges, fumigation charges, charges for phytosanitary certificates, labour charges for stuffing cargo in containers etc to their clients; they are engaged in on-board shifting of the containerised cargo on the vessel for which they pay terminal handling charges....
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....RU Ministry of Finance Department of Revenue Tax Research Unit New Delhi, dated the 11th July, 1997 To All Commissioners of Central Excise and Customs Sir, Sub : Service Tax on Clearing & Forwarding Agents and rent-a-cab scheme operators. I am directed to invite your attention to Section 88 of the Finance Act, 1997 which, inter-alia, provides for levy of service tax on the services rendered by clearing and forwarding agents and rent-a-cab scheme operators. It has been decided to bring the above services under the service tax net with effect from 16th July, 1997. Notification Nos. 26/97-S.T. and 27/97-S.T., both dated the 11th July, 1997 have been issued in this regard (copies enclosed). 2. CLEARING AND FORWARDING AGENTS 2.1 "Clearing and forwarding agent" has been defined as "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 a consigning agent." The taxable service has been defined as "any service provided to a client, by C&F agent in relation to clearing a....
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....nt engaging such agent (Notification No. 27/97-S.T. refers). 2.5 For the services rendered, the C&F agent receives commission or remuneration which usually consists of two components : (I) Minimum commission on a flat rate or turnover basis depending on the packages/consignments handled; (II) A variable commission based on performance which is computed on the performance indicators agreed upon between the agent and the principal. This is usually given as a percentage of the turnover. The above two constitute the remuneration or commission paid to the C&F agent by the principal 2.6 In cases where C&F agents engaged for various towns, states or areas are paid only by the regional or the head office of the company appointing such agents, for service tax purposes it would suffice to register only such regional or head office. In such cases the regional office or the head office, as the case may be, should also be required to give an undertaking to discharge the service tax liability. 3. RENT-A-CAB SCHEME OPERATORS 3.1 As per Section 88 of the Finance Act, 1997, 'rent a cab scheme operator' means a person who is the holder o....
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....port. Authority who is the licensing authority under the rent-a-cab scheme, 1989 to identify and register the rent-a-cab scheme operators for the purposes of service tax. 4. GENERAL : 4.1 As per Section 69 of the Finance Act, 1994 read with rules 3 & 4 of the Service Tax Rules, 1994, every person responsible for collection of the service tax is required to be registered with the concerned Central Excise Officer appointed under Rule 3. Notification No. 27/97-Service Tax dated 11-7-97 amends rule 2 of the said rules so as to prescribe that the person responsible for collecting the service tax in relation to the services provided by a clearing and tax in relation to the services provided by a clearing and forwarding agent shall be the person who engages a clearing and forwarding agent and by whom remuneration or and commission (by whatever name called) is paid for such services to the said agent and the person responsible for collecting the service tax in relation to the services provided by rent-a-cab scheme operator shall be the operator who raises the bill for services rendered to any person by such operator. 4.2 Rules relating to levy of service tax on o....
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....ry of work as indicated in above circular, it is very clear from the finding recorded by adjudicating authority and reproduced by us hereinabove. 18. Further, we find that C.B.E.&C., in their circular dated 24-4-02 have reiterated the said clarification issued by them in 1997. The said clarification dated 24-4-02, more specifically in Para 10 is reproduced below : "10. The matter has been examined. Normally, a C & F agent receives goods from the factories or premises of the Principal or his agents, stores these goods, despatches these goods as per orders received from the Principal or owner, arranges transport, etc. for the purpose and prepares invoices on behalf of the Principal. For this service, the C & F agents receives commissions on the basis of agreed terms. Therefore, an essential characteristic of any services, to fall in the category of C & F agent, is that the relationship between the service provider and receiver should be in the nature of principal (owner) and agent. The C & F agent carries out all activities in respect of goods right from stage of their clearances from the premises of the principal to its storage and delivery to the customers." ....
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....enue 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 'or' then it would amount to doing violence to the simple language used by Legislature which cannot be imputed ignorance of English language. In that regard we place reliance on the judgment of Hon'ble the Supreme Court rendered in the case of Inayat Ali Khan v. State of U.P., (1971) 2 SCC 31 (Para 5) and para 6 of the judgment of Hon'ble the Supreme Court rendered in the case of APE Belliss India Ltd v. Union of India, (2001) 132 E.L.T. 8. The observations of their Lordship reads thus : "6..........A plain reading of the Section (sic Ta....
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....ould necessarily have to be engaged in providing clearing and forwarding services in order to be taxable in the category of clearing and forwarding agent. 66. In Commissioner of Central Excise, Panchkula v. Kulcip Medicines Pvt. Ltd. reported in 2009 (14) S.T.R, 608 (P & H), the Punjab and Haryana High Court held that the expression "a Clearing & Forwarding Agent in relation to clearing and forwarding operations, in any manner", appearing in Section 65(104)(j) read with Section 65(25) of Chapter V of the Finance Act, 1994, contemplates only one person rendering service as 'Clearing & Forwarding Agent". 67. The Court further held and observed that if, a person rendered service as "Forwarding Agent" without rendering any service as "Clearing Agent", he could not be brought within the tax net, since he could not be deemed to have rendered both services." 2. It can be seen from the above reproduced portion of the judgments, that law has been fairly settled which indicate that the clearing & forwarding services can be considered as being rendered, if both the activities are connected and simultaneously done. As has been reproduced by us, the appellant in this ....