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2015 (4) TMI 577 - AT - Service TaxClearing and forwarding (C&F) Agent service - 'freight rebate' and 'primary freight rebate' - Held that:- With respect to 'freight rebate' and 'primary freight rebate' received by the Respondent we find that the same is received due to Respondent's investment in 125 wagons and is clearly arising out of their arrangement with Indian Railways. In fact, Indian Railways has issued a circular to this effect entitling Respondent to receive 22.5% of the freight amount as rebate to the Respondent. This amount has not become payable to the Respondent for having provided any service to ACC Ltd or its customers and certainly not for providing any clearing and forwarding agent's service - when the amount became due to the Respondent due to their arrangement with Indian Railways, it cannot be said that it is towards clearing and forwarding agent for Indian Railways. Merely because the amount is routed or received through ACC Ltd. or its customers, it cannot be linked with clearing and forwarding agent's service. Manner of routing the consideration cannot decide taxability of the transaction. Respondent has paid service tax on consideration received for providing clearing and forwarding agent's service under a separate contract with ACC Ltd or its client for this purpose. - Commissioner has rightly dropped the service tax demand on 'freight rebate' and 'primary freight rebate'. Amount received as facility charges is towards making available certain facilities such as special wagons, specialist equipment for the use of ACC Ltd. The appellant-assessee has not provided any service to receive facility charges but has only made available certain facilities or infrastructure for the use of ACC Ltd. The record of the proceedings before us do not show any material to the effect that the appellant-assessee was engaged in providing any service to entitle them to receive facility charges other than merely making available the specified facilities or equipment to ACC Ltd. We have perused the scope of clearing and forwarding agent's services as clarified in the CBEC Circular and it clearly does not suggest that the tax is to be levied as C&F service for making available any facility but is to be levied only on providing of specified C&F services in which clearing and handling of goods are involved. - consideration received for facility charges is not liable to service tax as clearing and forwarding agent's service - Decided against Revenue.
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