TMI Blog2009 (7) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of service tax, if the service provider is taxable under a different category. - 1359 of 2007 - - - Dated:- 22-7-2009 - The Hon'ble Justice INDIRA BANERJEE Shri Poddar, for the Petitioner. Shri Roy Chowdary, for the Respondent. JUDGMENT 1. In this writ application, the petitioners have inter alia challenged an order No.15/Com/ST/KOL/2007-2008 dated 27th November, 2007, of the Commissioner of Service Tax, Service Tax Commissionerate, Kolkata inter alia confirming that the service provided by the petitioner No.1, hereinafter referred to as the petitioner company to its clients fell within the category of service of a clearing and forwarding agent. 2. The petitioners have also impugned the registration certificate/Order No. V (30) 1/STC/ST/DIV-1/KOL/2005/368 dated 11th September, 2007 whereby the petitioner company has been granted registration in the category of Clearing and Forwarding Agent within the meaning of Section 65(25) read with Section 65(105)(j) of Chapter V of the Finance Act, 1994 and Rule 4 of the Service Tax Rules, 1994. 3. The petitioners claim that the petitioner company has entered into liasoning agreements with various industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance Acts of 1998, 2001 and 2002, which are not material for the purpose of this application. The Finance Act of 2003 imposed service tax on inter alia business auxiliary services with effect from 1st July, 1993. The Finance Act, 2004 expanded the scope of business auxiliary service with effect from 10th September, 2004. 12. Service tax is governed by Chapter V of the Finance Act, 1994, the relevant provisions whereof, as amended, are set out herein below for convenience: 65. Definitions. In this Chapter, unless the context otherwise requires, . . (19) business auxiliary service means any service in relation to. (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client; or [Explanation. For the removal of doubts, it is hereby declared that for the purpose of this sub-clause, inputs means all goods or services intended for use by the client:] (v) production or processing of g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion (by whatever name called) is paid for such services to the said agent for the period commencing on and from the 16th day of July, 1997 and ending with the 16th day of October, 1998; or (ii) in relation to services provided by goods transport operator, every person who pays or is liable to pay the freight either himself or through his agent for the transportation of goods by road in a goods carriage for the period commencing on and from the 16th day of November, 1997 and ending with the 2nd day of June, 1998 shall be deemed always to have been a person liable to pay service tax, for such services provided to him, to the credit of the Central Government. (2) Notwithstanding anything contained in sub-section (1), in respect of any taxable service notified by the Central Government in the Official Gazette, the service tax thereon shall be paid by such person and in such manner as may be prescribed at the rate specified in section 66 and all the provisions of this Chapter shall apply to such person as if he is the person liable for paying the service tax in relation to such service. 13. The Ministry of Finance, Department of Revenue, Tax Research Unit issued Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discharged by the person availing the service so rendered. In order words, the principal who engages a clearing and forwarding agent is the person responsible for collecting and paying the service tax to the exchequer, Commissioners of Central Excise may therefore take necessary action accordingly and also make this position clear by issue of suitable trade notice. 14. The Mumbai Commissionerate I issued a Trade Notice No.8/97 dated 11th July, 1997 in which the provisions of the aforesaid notification dated 11th July, 1997 of the Ministry of Finance, extracted hereinabove have been reiterated. 15. In the context of disputes as to whether service of providing storage facilities provided by certain agencies could attract service tax as a service provided by a clearing and forwarding agent, the Central Board of Excise and Customs issued CBEC Circular No.37B Order No. 2/1/2002 ST, dated 20.4.2002 making inter alia the following clarification: Normally, a C F agent receives goods from the factories or premises of the principal or his agents, stores these goods, despatches these goods as per orders received from the Principal or owner, arranges transport, etc. for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnishing of returns (1) Every person liable to pay the service tax shall himself assess the tax due on the services provided by him and shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency as may be prescribed. (2) The person or class of persons notified under subsection (2) of Section 69, shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency as may be prescribed. 73. Recovery of service tax not levied or paid or shortlevied or short-paid or erroneously refunded (1) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously levied, the Central Excise Officer may, within one year from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or shortpaid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: .. .. Rule 4 of the Service Tax Rules, 1994 provides as follows: R.4. Registration (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall make separate applications for registration in respect of each of such premises or offices to the jurisdictional Superintendent of Central Excise. (4) Where an assessee is providing more than one taxable service, he may make a single application, mentioning therein all the taxable services provided by him, to the concerned Superintendent of Central Excise. (5) The Superintendent of Central Excise shall after due verification of the application form, grant a certificate of registration in Form ST-2 within seven days from the date of receipt of the application. If the registration certificate is not granted within the said period, the registration applied for shall be deemed to have been granted. (6) Where a registered assessee transfers his business to another person, the transferee shall obtain a fresh certificate of registration. (7) Every registered assessee, who ceases to provide the taxable service for which he is registered, shall surrender his registration certificate immediately. 21. By a letter dated 18th January, 2006, the Assistant Commissioner of Service Tax (Technical) requested the petitioner company to resubmit its application for centralized regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness auxiliary service . 27. By a letter dated 11th August, 2006, the Commissioner of Service Tax informed the petitioner company that having regard to the adjudication proceedings in case C No. V(12) 7/SIV/ST/Kol/04/822 dated 16.2.2005 as well as the decision of the Central Excise and Service Tax Appellate Tribunal in case of Coal Handlers Pvt. Ltd. vs. Commissioner of Central Excise, Kolkata-1 reported in (2004)171 ELT 191, the Commissionerate was of the view that the service rendered by the petitioner company merited classification in the category of service provided by a clearing and forwarding agent under Section 65(25) of Chapter V of the Finance Act, 1994. 28. By a letter dated 16th August, 2006, written in response to the said letter of the Commissioner of Service Tax, the petitioner reiterated their stand that the service rendered by the petitioner company did not bring it within the definition of clearing and forwarding agent in the Finance Act, 1994 as amended. 29. On or about 12th April, 2007, the petitioner company was served with an order No.21-22/Commr./ST/Kol./2006-07 dated 30th March, 2007 whereby the petitioner company was assessed to service tax in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent under Section 65(25) of the Finance Act, 1994. 38. The first issue in this writ petition is whether sub-rule 5 of Rule 4 of the Service Tax Rules, 1994 under which registration is to be deemed to have been granted upon failure to grant a certificate in Form S-2 within seven days, is attracted in the facts and circumstances of this case. Rule 4 sub-rule 5 provides as follows: 4.(5) The Superintendent of Central Excise shall after due verification of the application form, grant a certificate of registration in Form ST-2 within seven days from the date of receipt of the application. If the registration certificate is not granted within the said period, the registration applied for shall be deemed to have been granted. 39. The deeming provision in Rule 4(5) is applicable to registration granted by the Superintendent of Central Excise, as rightly pointed out by Mr. Roy Chowdhury, appearing on behalf of the respondents. 40. The petitioner's application is, however, for centralized registration under Rule 4(2). The registration is to be granted by the Commissioner of Service Tax or the Chief Commissioner of Service Tax in whose jurisdiction the premises of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48. In Paragraph 3 of the Circular No.72/2/2004- Service tax dated 2.1.2004 of the Central Board of Customs and Excise, it is clarified that in granting registration the jurisdictional officer cannot question the correctness of the declaration made by an applicant for registration. The jurisdictional officer is therefore to accept the declaration of the service provider for the purpose of registration. 49. Circulars of the Central Board of Excise and Customs are binding on the Department. This proposition finds support from the judgments of the Supreme Court in UCO Bank vs. CIT (1999) 237 ITR 889 (SC), Steel Authority of India vs. Collector of Customs, Bombay (2000) 115 ELT 42 (SC), Paper Products Ltd. vs. CCE (2001) 247 ITR 128, 130 (SC), Collector of Central Excise Vs. Dhiren Chemical Industries (2002) 254 ITR 554, 557 (SC), Union of India vs. Azadi Bachao Andolan (2004) 263 ITR 706 (SC), Union of India vs. Arviva Industries India Ltd. (2007) 209 ELT 5 (SC), and in State of Kerala and Others vs. Kurian Abraham Pvt. Ltd. and Anr (2008) 13 VST 1 (SC). 50. Relying on the judgment of the Supreme Court in Commissioner of Central Excise Bolpur vs. Ratan Melting and Wire Indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision, either in the Finance Act, 1994 as amended from time to time, or in the Service Tax Rules, 1994 framed thereunder which stipulates the consequences of delay in applying for registration. 55. Even assuming, as argued by Mr. Roy Chowdhury, that there was some delay on the part of the petitioner company in applying for registration in the category of business auxiliary service, the application could not have been rejected on that ground. Nor could registration have been granted in a different category on the ground of delay. At best, interest and/or penalty might be imposed on the ground of delay in applying for registration. 56. This Court does not, in writ proceedings adjudicate disputes with regard to the nature of the work performed by an applicant for registration. However, as argued by Mr. Poddar, there is really no dispute with regard to the nature of service provided by the petitioner company. The respondents have virtually admitted that the petitioner carries on job of supervision. 57. It prima facie appears to this Court that the nature of the services rendered by the petitioner company to its clients does not fall within the category of service of a clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not attract tax in the category of service of clearing and forwarding agent. The service provider would necessarily have to be engaged in providing clearing and forwarding services in order to be taxable in the category of clearing and forwarding agent. 64. In Commissioner of Central Excise, Panchkula v. Kulcip Medicines Pvt. Ltd. reported in (2009) 14 Service Tax Review 608 (P H), the Punjab and Haryana High Court held that the expression a Clearing Forwarding Agent in relation to clearing and forwarding operations, in any manner , appearing in section 65(104)(j) read with section 65(25) of Chapter V of the Finance Act, 1994, contemplates only one person rendering service as Clearing Forwarding Agent . 65. The Court further held and observed that if, a person rendered service as Forwarding Agent without rendering any service as Clearing Agent , he could not be brought within the tax net, since he could not be deemed to have rendered both services. 66. It is true, as argued by Mr. Roy Chowdhury, appearing on behalf of the petitioner, disputed questions of fact with regard to the exact nature of the activities of the petitioner company might not be adjudicated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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