TMI Blog2012 (10) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and the ones listed in the Circular dt. 11.07.1997 was issued by the CBEC , it is clear that the Appellant's services rendered to M/s SAIL fall under the scope of clearing and forwarding service. Besides, under the said agreement the Appellant represent M/s SAIL before all concerned relating to the movement of said goods, as their agent. As decided in COMMISSIONER OF C. EX., BANGALORE-I Versus MAHAVEER GENERICS [2009 (11) TMI 104 - KARNATAKA HIGH COURT] the activities which the consignment agents were required to discharge had been narrated in the said agreement namely, the principal to supply the product from any of its depots in loan licence to the agent on a consignment basis through a stock-transfer note for sale by him, as the agent of the principal. Thus the relationship between M/s SAIL and the Appellant is admittedly that of a principal and agent, which is also amply clear from various terms and conditions of the agreement. The service of consignment agent has been specifically included in the scope of Clearing and Forwarding Agent service. Admittedly, the Appellant carry out all these activities as an agent of M/s SAIL for movement of the goods and hence the Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. SAIL and rendered services under the category of Clearing and Forwarding Agent , accordingly, liable to pay service tax of ₹ 27,45,920/- for the period 2001-02 to 2003-04. The demand was later confirmed by the Additional Commissioner and penalty of ₹ 35,00,000/- under Section 78 , penalty under Section 76 @Rs.200/- per day or 2% of such Tax per month, whichever is higher and penalty of ₹ 5000/- under Section 75A of the Finance Act,1994 were imposed on them. Besides, personal penalty of ₹ 1,00,000/- under Section 81 of the Finance Act,1994 on Shri Atul Kumar Jain, Managing Director of the Appellant. Aggrieved, the Appellants filed appeals before the Commissioner (Appeals), who vide his Order-in-Appeal No.102-103/Pat/STax/Appeal/2008 dated 31.07.2008 has upheld the Order of the Adjudicating Authority. Hence the present Appeals. APPEAL NO.ST-178/08 3. Briefly, in this case, as the Appellant failed to pay service tax under the category of Clearing and Forwarding Agent services, even though they continued to act as Consignment Agent under the Agreement dt.30.03.2001 with M/s. SAIL and rendered the service of a Clearing Forwarding Agent, show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort consignment in the respective trucks. It is his submission that they were neither clearing the goods from the factory of M/s. SAIL nor forwarding the goods to anybody else. They carried out the activity of transshipment of the goods meant for export. For the said activity, they were registered initially with the Department on 18.09.2002 under category of Storage and Warehousing services, but subsequently on being advised that they were not liable to pay Service Tax, since their activities were permissibly covered under Cargo Handling Services and related to handling of export cargo, they submitted a letter dated 28.12.2004 for cancellation of the registration and thereafter, stopped making payment of the Service Tax. 6. The Ld. Advocate further submitted that the Appellants were, thereafter, issued with show cause notices. The first show cause notice was issued to them for the period from April, 2001 to March, 2004 demanding a duty of ₹ 27,45,920/- on 21.02.2005 invoking extended period limitation. The second show cause notice was issued on 05.02.2008 for the period from April, 2004 to September, 2006 demanding an amount of ₹ 61,34,690/- and the third show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The Ld Advocate has contended that similar activities undertaken by one M/s. Arpit Enterprises were classified under the category of Cargo Handling Services. Further, he has submitted that the demand is barred by limitation as all the facts were within the knowledge of the department and hence no suppression or mis-declaration could be alleged against the Appellants. He has submitted that initially the activities were classified under storage and warehousing services and after certain period, the Appellants stopped making payments and requested for cancellation of the registration certificate, since the activities were covered by Cargo Handling Services and handling of export cargo does not attract Service Tax. Therefore, in regard to the first show cause notice dated 21.02.2005 issued for the period from April, 2001 to March, 2004, he submitted that the maximum period is barred by limitation; the demand from 21.02.2004 at best could be maintainable and the rest period is barred by limitation. Further, he has submitted that the second show cause notice issued on 05.02.2008 and the third show cause notice issued on 26.02.2008, are entirely barred by limitation. In support of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred and accepted in almost in every judgement delivered by the Tribunal and the Courts on the subject. He has submitted that the services rendered by the Appellant squarely fall under the scope of the definition of C F Agent services listed in the aforesaid Circular. The Ld. A.R further submitted the present facts and circumstances of the case are almost similar to the facts of the case decided by the Hon ble High Court in the case of Commissioner of C.Ex., Banglaore Vs. Mahaveer Generics 2010 (17) S.T.R 225 (Kar.) wherein their Lordships had observed that the service of a consignment Agent falls under the category of C F Agents. He has submitted that the judgments cited by the Ld Advocate for the Appellant are delivered following the ratio of Tribunal in Mahaveer Generics case which stands overruled by the Hon'ble Karnataka High Court and hence not applicable to the present case. 12. Further, the Ld A.R. has submitted that the claim of the Appellant that the services rendered by them are in relation to the export of goods to Nepal and hence, ought to be exempted from payment of Service Tax, cannot be accepted as the goods are manufactured and exported by M/s. SAIL a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to the facts of the present case, it is necessary to state the same as were in force during the relevant period. 15. The Cargo Handling Service is defined under Section 65(23) of the Finance Act, 1994. The said service has been made taxable under Section 65(105)(zr) of Finance Act,1994 w.e.f.16.08.2002. It reads as follows:- Cargo Handling Services Service defined u/s 65(23) of the Finance Act, 1994 cargo handling service means loading, unloading, packing or unpacking of cargo and includes cargo handling services provided for freight in special containers or for non-containerised freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport and cargo handling services incidental to freight, but does not include handling of export cargo or passenger baggage or mere transportation of goods. 16. Service rendered by Clearing and Forwarding Agent has been levied to service tax under Section 65(105)(j) of Finance Act,1994 w.e.f. 16.7.1997 and it is defined at Section 65(25) of the Finance Act, 1994, reads as follows:- Clearing Forwarding Agents Service Provider defined u/s 65(25) of the Finance Act, 1994 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the company for non-observance by the Consignment Agent of any of the provisions of the various laws/act/statutes or for the Consignment Agent s failure in ensuring the compliance as aforesaid, and shall keep the company indemnified and reimburse and discharge all sums that may be claimed by appropriate authorities in any manner whether as penalty, fine levy demands or compensation fee, arising out of or consequent upon the breach of the requirements and provisions of any statue(s), law, rules and regulations by the Consignment Agent/or his representative. 20. On a plain reading of the said Agreement dt. 30.03.2001, it reveals that the Appellant were required to carry out the following activities :- (i) Receiving goods from the factory/premises of SAIL at Fatuha Rail Yard; (ii) Transportation of goods from Fatuha Rail Yard to consignment agency yard at Banka Ghat; (iii) Storing (warehousing) the goods with proper stacking and marking for identification; (iv) Receiving dispatch order from SAIL on the basis of which they prepare issue documents; (v) Arranging dispatch as per direction of SAIL after proper weighment, issue of documents, etc.; (vi) Maintain reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IL stipulated in the Agreement dt.30.03.2001. 24. We find that under the agreement dt.30.03.2001, M/s. SAIL had appointed the Appellant as their Consignment Agent and authorized them to receive the stocks from railway yard on their behalf, stack it in the stock yard, maintain the stock in the stock yard properly and load in the trucks of consignees of Nepal after preparation of necessary documents for and on behalf of M/s. SAIL. The activities were not limited to just loading and unloading of the cargo but also involves stacking which included marking/painting, loading into customers vehicle for delivery with weighment and necessary documentation. Also, the Appellant were required to carryout the stock verification during storage of the said goods at the said stockyard. A comparison between activities carried out by the Appellant and the ones listed in the aforesaid Circular, it is clear that the Appellant s services rendered to M/s SAIL fall under the scope of clearing and forwarding service. Besides, under the said agreement the Appellant represent M/s SAIL before all concerned relating to the movement of said goods, as their agent. In other words, the relationship between M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 65. (2)?When for any reason, a taxable service is, prima facie, classifiable under two or more sub-clauses of clause (105) of section 65, classification shall be effected as follows :- (a) the sub-clause which provides the most specific description shall be preferred to sub-clauses providing a more general description; (b) composite services consisting of a combination of different services which cannot be classified in the manner specified in clause (a), shall be classified as if they consisted of a service which gives them their essential character, in so far as this criterion is applicable; (c) when a service cannot be classified in the manner specified in clause (a) or clause (b), it shall be classified under the sub-clause which occurs first among the sub-clauses which equally merit consideration.] 27. A simple reading of the said principles of classification, it is clear that as per sub-sec.2(a) the sub-clause which provides most specific description to be preferred to sub-clause providing a general description and under Sub-sec.2(b), a composite services consisting of combination of different services shall be classified as if they consisted of a servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity and as held by Their Lordships both in text and context the word includes as mentioned in the definition clause of clearing and forwarding agent we find that the Legislature in its wisdom have desired to give extended and enlarged meaning to such expression and as such we accept the contention of the revenue to hold that the activity carried on by the assessee in question would fall within the purview of clearing and forwarding agent and accordingly we answer the question of law framed herein above by holding that the services rendered by the respondent would fall within the category of clearing and forwarding agent and thus, amenable to the definition of taxable service .. . 30. We find that the judgements relied upon by the learned Advocate are based on the ratio of this Tribunal in the case of Mahabir Generics case (2004-170-ELT 28(Tri.-Del.). The said judgement now being overruled by the Hon ble Karnataka High Court, hence, all these decisions cited by the learned Advocate are no more good law and accordingly, cannot be followed. 31. On the aspect of limitation, we find that with regard to Appeal No. ST-188/08, the notice was issued invoking extended period of limita ..... X X X X Extracts X X X X X X X X Extracts X X X X
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