TMI Blog2006 (8) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... s therefore held to be acting as a clearing and forwarding agent and service tax amounting to ₹ 15,68,027 was demanded from them for the period 1-9-99 to 30-6-2003 by the Assistant Commissioner, Chennai-III Division. He also demanded interest and imposed penalties on the assessee. The assessee filed an appeal against the above order and the Commissioner (Appeals) upheld the demand and set aside the penalties. The present appeal has been filed by the assessee against the order passed by the Commissioner (Appeals). 2. The lower appellate authority found that the assessee procured orders for the Company s goods which it executed. He observed that as per the agreement between the assessee and the Company, the assessee would appoint ade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the goods. Raymond would directly send the documents to the buyer or to his Bankers. The assessee did not receive dispatches or deal with, directly or indirectly, any goods on behalf of the Raymond or the buyer. In all the cases, the goods were directly dispatched by M/s. Raymond Ltd to the buyer. As per the agreement the assessee was required to follow up payment by the buyer. In cases where buyers failed to honour the bills, it was the responsibility of the assessee as the selling agent to pay such bills and take delivery of the goods not accepted by the buyer. The demurrage, bank interest, and other charges incurred as a result of such refusal or failure would be debited to the selling agent s account. It was also the responsibility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. K.K. Corporation (Tamilnadu), is a selling agent of M/s. Raymond Ltd. They promote business of Raymond by advertising their products. They conduct periodical market surveys and report trends and tastes of customers to their principal. They procure orders from buyers which are executed by the principal. They pursue payment for the goods by the buyers and act as bailee-cum-trustee in cases where the buyers fail to take delivery of the goods. The selling agent appoints authorised dealers with the approval of the principal. The assessee has undertaken these obligations as per an agreement with the principal. These activities of the assessee were held to be falling under the Clearing and Forwarding Agent s service by the lower authority and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Tax/97 of the Madurai Commissionerate dated 14-7-97 as follows : (a) Receiving the goods from the factories or premises of the principal or his agents; (b) Warehousing these goods; (c) Receiving dispatch orders from the principal; (d) Arranging dispatch orders of goods as per the directions principal by engaging transport on his own or through the authorized transporters of the principal; (e) Maintaining records of the receipt and dispatch of goods and the stock available at the warehouse; (f) Preparing invoices on behalf of the principal. 8. On a perusal of the agreement of the Company with the assessee and the Trade Notice, it is seen that the assessee does not undertake any of the activiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definitely connected with the leaving and forwarding operations of the various tobacco products being manufactured by M/s. Prabhat Zarda Factory 8.1 In the above case, the party had procured orders from the dealers and had passed the same to the principal from whom they had received commission in lieu of such services. In L T Ltd. v. CCE Chennai, 2006 (3) S.T.R. 321 (Tri. - LB) the Larger Bench of the Tribunal overruled the ratio of the Prabhat Zarda Factory (I) Ltd. v. CCE, Patna ( supra). The Tribunal concluded the clearing and forwarding operations to be various activities having bearing on clearance of goods which would involve documentary process and arrangements for transfer of goods to their destination which may also involve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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