TMI Blog2011 (12) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... alties under various Sections of Finance Act, 1994. 2. Since all the 3 appeals are of very same assessee and issue also being same but for different periods, these appeals are disposed off by a common order. 3. The relevant facts that arise for consideration from reading of Show-Cause Notice are that that the appellants were engaged in facilitating clearance of export/import cargo at various Ports/ICDs/CWE-CFS and for which they did the work of freight booking of ocean going vessels, co-ordination with shipping lines for terminal handling of containerized cargo, coordinating with CHAs for customs clearance of documents etc, shifting of empty containers from container yards to CWC-CFS, facilitating fumigation required for agro products, employment of labours for stuffing of the cargo into containers etc. 4. It was the conclusion of the lower authorities that the appellants are providing handling, clearing and forwarding service to the clients. On reaching such a conclusion, Show Cause Notices were issued alleging that entire activities carried out by the assessee appear more appropriately classifiable under the category of Clearing forwarding Agents, as defined in S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nition of clearing forwarding agent and also the clarification issued by CBE C. 6. It is the submission that CBEC had specifically stated that activities of appellant would fall under clearing forwarding agent service. It is the submission that the appellants do not undertake all activities as indicated in the said circular, dt.11.7.97. It is the submission that entire proceedings in all the impugned orders, the appellant do not receive the goods or store in warehouse nor did the appellant arrange for transportation of the goods from warehouse and nor is there any question of appellant maintaining records of the stock in warehouse and appellants do not prepare any invoices on behalf of the exporter. It has been the submission that very same view was reiterated by the Board in its 37B order No. 2/1/2002-ST, dt.24.4.02, wherein in Para 10, the Board has clearly indicated that the activities carried out by clearing forwarding agent. It is the submission that as per Board's understanding, the activities carried out would not fall under the category of clearing forwarding agent services. He would also submit that Hon'ble High Court of Punjab Haryana in the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty needs to be re-quantified as the adjudicating authority has considered the entire receipt as gross value. It is the submission that the penalties imposed by original adjudicating authority is incorrect. 7. Ld. Authorised Representative for the Department, on the other hand, while supporting the order of adjudicating authority, submits that the appellant herein, first took the registration under CHA even though they were not registered or permitted to operate as CHA. It is the submission that they were engaged in clearance of import/export at various Ports and they did the booking of ocean going vessels and other host of activities as has been brought out in the Show-Cause Notice. It is also the submission that one Shri Gautam Advani, Authorised Signatory, in his statement recorded on 10.10.07 has admitted that they are facilitating clearance of import/export consignment as per requirement of Customers and they float quotation for customs clearance, documents/offloading from truck, carting charges, scaling charges, sealing charges, empty containers shifting charges etc., and as such activities are not conducted on behalf of the customers. Hence, the activity is not limited t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 65A of Finance Act, 1994, he would submit that if composite services are rendered by any person, the services shall be classified under the category which gives them essential characteristic and submits that in this case, the services rendered would be falling under clearing forwarding agent service. 8. In rejoinder, the ld. Counsel would submit that Mahavir Generic's case ( supra ) is totally on different facts that the said judgment talks about a situation wherein inclusive definition of clearing forwarding was considered. He would submit that reading of Board's circular dt.24.4.02 does not imply meaning as has been sought to be propagated by ld. Authorised Representative for the Department. It is the submission that the proposition of ld. Authorised Representative appearing on behalf of the Department, as to clearances of export cargo from port should be considered as clearing activity seems to be far-fetched. 9. We have considered the submissions made at length by both sides and perused the records. 10. The issue to be decided in this case is whether the appellant's activity of facilitating clearances of export/import cargo, freight boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also recovered from their clients on actual basis (they pay Service Tax also on this charge). The above trade practice continues by the assessee even for the period from 2008-2009 though under a different nomenclature in their balance sheet wherein they now they refer the Logistic Income by way of Export-Agency Charges, Export-Logistics, Export Ocean/Air Freight, Export-line BL Charges, Export-Line Brokerage, Export-line Terminal Charges: Hence, I find that the assessee do handle the goods and are engaged in the clearing and forwarding operations of the cargo for export/import. 8.3.4 Now, coming to the main plea of the assessee that existence of Principal, contract with Principal, owning a godown, handling dispatch of goods on behalf of Principal, preparing invoices for the goods etc, are the activities clarified by CBE C in Circular No. B.43/7/97-TRU, dt. 11.7.97 as the services of a Clearing and Forwarding Agent. In this regard, I find that Section 65(25) of Finance Act, 1994 defines Clearing and Forwarding Agent as under: any person who is engaged in providing any service, either directly or indirectly, connected with the clearing and forwarding operations in any man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract between the principal and the clearing and forwarding agent detailing the terms and conditions and also indicating the commission or remuneration to which the C F agent is entitled. A clearing and Forwarding agent normally undertakes the following activities- ( a ) Receiving the goods from the factories or premises of the principal or his agents; ( b ) Warehousing these goods; ( c ) Receiving despatch orders from the principal; ( d ) Arranging despatch of goods as per the directions of the principal by engaging transport on his own or through the authorised transporters of the principal; ( e ) Maintaining records of the receipt and despatch of goods and the stock available at the warehouse; ( f ) Preparing invoices on behalf of the principal 2.3 It has been decided that the person responsible for collecting the service tax in the case of services rendered by a clearing and forwarding agent shall be the person engaging/appointing a clearing and forwarding agent (Notification No. 26/97-service tax refers). It may be noted that unlike in the case of other service tax levies where the service provider is the person responsible for collecting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scheme a licence is granted to a person who inter alia , maintains not less than 50 motor cabs having tourist permits issued under sub-section (9) of section 88 of the Motor Vehicles Act. The Rent-a-cab scheme operators, under the scheme are mandatorily required to maintain branch offices or sub-licensee offices in at least five cities of tourist importance with facilities for housing, maintenance and repair of vehicles. 3.2 Under the Rent-a-cab Scheme, 1989 the operator is required to maintain a register for each vehicle incorporating particulars as regards the hiring of the same in the format prescribed under the Scheme, Further, the operator under Rule 9 of the Scheme is required to collect hire charges from a foreign national or a non-resident Indian, only in foreign exchange. 3.3 The taxable service rendered by a Rent-a-cab scheme operator means any service provided to any person, by a rent a cab scheme operator in relation to the value of taxable service in relation to the service provided by a Rent-a-cab scheme operator to any person, shall be the gross amount charged by such operator from such person for services in relation to the renting of a cab and includes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, maintenance of documents, filing of returns and manner in which the service tax is to be paid. The Trade Notices should provide complete information and guidance to the new assessees and they should be self contained in all respects. The Commissioners are requested also to kindly incorporate the provisions of Chapter V of the Finance Act, 1994, as amended by Finance Act, 1997 and also copies of Service Tax Rules, 1994 (incorporating all the amendments), form of challans, TR-6, etc. in the Trade Notice. Heads of Accounts for payment of service tax on the above services will be intimated in due course., The intention is to provide complete guidance to the new assessees so that all relevant information is made available to them at one place. The field officers are also requested to kindly provide all assistance and guidance to the new assessees in explaining the provisions of service tax and in clarifying their doubts. All possible steps may kindly be taken by the Commissioners to facilitate smooth implementation of the imposition of service tax on the above services. 4.3 The commissioners are requested to give wide publicity to the fact that the service tax on the above two s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re case before us, we find that this relationship has not been established by the Revenue which is obvious as the appellant herein is not functioning as clearing forwarding agent. The clinking point in this case is that the appellant herein is not receiving the goods from principal or storing the goods or dispatching the goods, as per the orders received from the principal or prepares the invoices on behalf of the principal. It is also on record that in these cases, the appellant does not receive any commission as remuneration for receipt/store/despatch and preparing invoices of the goods on behalf of the principal. In the absence of any such service being rendered by the appellant, circular issued by CBE C would be binding on the lower authorities. 20. We find that as correctly pointed out by ld. Counsel that judgment of Hon'ble High Court of Punjab Haryana in the case of Kulcip Medicines (P.) Ltd. ( supra ) will specifically cover the issue. With respect, we may reproduce the relevant paragraph from the judgment of Hon'ble High Court : 11. The question which falls for consideration is whether word 'and' used after the word 'clearing' but bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The alloy steel should be known in the trade as stainless steel and further, it should contain 11% chromium as a component of the alloy steel. This is clear from the use of the word and . If the intention of the trade notice was to treat the two types of alloy steels as stainless steel, then it would have been made clear by using the word of instead of the word and . 12. We are further of the view that the circulars issued by the Board are binding and meant for adoption for the purposes of bringing uniformity. In that regard reliance may be placed on the judgments of Hon'ble the Supreme Court in the cases of Ranadey Micronutrients v. Collector of Central Excise - 1996 (87) E.L.T. 19 (S.C) and Paper Products Ltd. v. Commissioner of Central Excise - 1999 (112) E.L.T. 765 (S.C.) = [1999] 7 SCC 84. If the aforesaid principle is applied to the facts of the present case there does not remain any doubt that the circular issued by the Board is to be considered as binding and cannot be deviated even by the department. On that account also the expression 'clearing and forwarding agent' have to be interpreted in the light of the circular. 21. Yet, in another c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons in the definition of clearing forwarding agent, more specifically directly or indirectly , in any manner , we find that the larger bench of this Tribunal, in case of Larsen Toubro Ltd. ( supra ) (wherein, I was also one of the Member), had specifically held in Para 10, which, is reproduce below: 10. It appears to us that the expressions directly or indirectly and in any manner occurring in the definition of clearing and forwarding agent cannot be isolated from the activity of clearing and forwarding operations. A person may undertake to provide service of procurement of orders as agent of the principal without agreeing to provide services of clearing and forwarding of the goods. Clearing and forwarding has a very specific connotation in the context of movement of goods from the supplier to their destination and agents undertaking clearing and forwarding operations may never have been concerned with procurement of orders for the goods which are cleared and forwarded. A person entrusted with the work of commission agent for procuring orders for the principal cannot insist on also providing services as clearing and forwarding agent in respect of those goods and i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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