2007 (5) TMI 302 - AT - Service Tax

Clearing and forwarding agent- whether a person procures order and gets commission cannot be treated as falling within the category of Clearing and forwarding agent ? in the light of the judgment of Larger Bench in the case of Larsen & Toubro Ltd. v. CCE 2006 -TMI - 460 - Appellate Tribunal New Delhi which overruled the judgment rendered in case of Prabhat Zarda Factory (India) Ltd. v. CCE 2007 7 STT 226 (Kolkata - CEGAT) the Commissioner (Appeals) held that C&F agent who procures order and get commission cannot be treated as come within the category of Clearing and Forwarding services . Tribunal upheld the decision of Commissioner (Appeals).

Summary

Issues:
- Classification of services for service tax purposes

Analysis:
The case involved a revenue appeal against an Order-in-Appeal where service tax confirmed on the assessee had been set aside based on the argument that a C&F agent procuring orders and receiving commission does not fall under the category of 'clearing and forwarding service'. The Commissioner (Appeals) relied on a previous bench ruling in a similar case. The revenue, aggrieved by this decision, filed an appeal citing another Tribunal order. The Tribunal heard both sides, with the JDR referring to the appeal memo and the Counsel mentioning a Larger Bench ruling in a different case. The Larger Bench had overruled a previous decision and clarified that orders procured by a C&F agent should be treated separately from C&F activities. The Tribunal carefully considered the submissions and upheld the Larger Bench's ruling, stating that persons merely procuring orders on a commission basis are not considered C&F agents. Consequently, the appeal was rejected based on the precedent set by the Larger Bench judgment.