Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2017 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (10) TMI 289 - AT - Service TaxClassification of services - GTA service or clearing and forwarding agency service? - Valuation - GTA service - bonus - includibility - The risk of non-conforming coal being supplied was eliminated by inclusion of penalty and bonus clauses in the agreement - whether this bonus amount required to be included in assessable value? - Held that: - we are able to conclude that ‘clearing and forwarding agent service’ is one where a manufacturer or its representative engages such an entity to handle the place utility function in a commercial chain with the goods delivered to customers on instruction of that principal. Such a function can hardly be re-designed to describe the very reverse for delivery of procurements required by the principal. It would appear that the tax authority in its anxiety to deny the abatement that is the entitlement of provider of ‘goods transport agency service’ sought to bring the activity under an omnibus head that being bereft of a specific definition could be resorted to for that purpose, failed to identify the various services that were elements of this composite contract. Some of those could possibly have been taxable services. Nevertheless, section 65A of Finance Act, 1994 lays down the principles that should guide classification of composite services. It would appear that transportation is the most prominent of these and the classification that was declared by the appellant cannot be faulted for its legality. More so, as the impugned order has failed to consider such an option. Nay, even the show cause notice is regrettably bereft of such a scrutiny. The activity of the appellant is not classifiable as ‘clearing and forwarding agents service’ and the demand on that head must fail. Issuance of SCN - applicability of section 73(3) - Held that: - If the entire tax and interest had been paid before the issue of notice, the claim of the appellant that notice should not have been issued cannot be denied - matter requires re-examination. The service is taxable as ‘goods transport agency service’ and set aside the demand arising from re-classification of the service - regarding issuance of SCN, matter remanded to the original authority to determine whether section 73(3) is applicable. Appeal allowed in part and part matter on remand.
|