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Commissioner of Service Tax, Ahmedabad And Others Versus M/s Viral Makers Ltd. And Others

Classification of service - Business Auxiliary Service or Commission Agent service or clearing and forwarding agent service - Held that:- It is a Depot Agreement between the Company and the Assessee. - Clause (6) of the agreement stipulates that the goods entrusted to the Assessee for sale will remain the sole property of the Company until sold. Upon reading of the above clauses and Clause (6) as relied upon by the learned Advocate, it is clear that the Company entrusted the Assessee as a Depot .....

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gent, but for Depot Manager, and therefore, it would cover under the definition of Clearing and Forwarding Agent - Decided in favour of Revenue. - Appeal No. ST/75/2007, Appeal No. ST/92/2011 - Order No. A/10868-10869/2015 - Dated:- 25-6-2015 - Mr. P.K. Das, Member (Judicial) And Hon ble Mr. P. M. Saleem, Member (Technical),JJ. For the Petitioner : Shri Jitendra Nair, Authorised Representative For the Respondent : Shri Jigar Shah, Advocate ORDER Per: P.K. Das A common issue is involved in these .....

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g Agent service as defined under Section 65 of the Finance Act, 1994 during the period from 01.10.2000 to 31.03.2005. The Adjudicating authority confirmed the demand of service tax along with interest and imposed penalty of equal amount of tax. The Commissioner (Appeals) vide OIA dt.28.12.2006 allowed the appeal filed by the Assessee and set aside the Adjudication order. Revenue filed this appeal against the impugned order dt.28.12.2006. 2.1 The Assessee during investigation deposited a sum of & .....

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ugned order dt.29.10.2010. 3. The learned Authorised Representative for the Revenue reiterates the grounds of appeal filed by the Revenue. He drew the attention of the Bench to the various clauses of the agreement. He particularly drew the attention of the Bench to the relevant portion of the Adjudication order to substantiate the activities of the assessee Assessee would come within the scope of Clearing and Forwarding Agent service. It is contended that the agreement itself termed as Depot Agr .....

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(6) of the agreement. It is submitted that the Clause (6) clearly shows that the Assessee has to arrange sale of the goods and the other activities as shown in the agreement are incidental to the sale of the goods. He submits that the Commissioner (Appeals) has rightly set aside the Adjudication order. It is submitted that the present case is squarely covered in favour of the Assessee by the decision of the Tribunal in the case of CCE Bangalore Vs Transasia Sales Syndicate - 2007 (8) STR 467 (Tr .....

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nition of Clearing and Forwarding Agent service, it is required both the clearing and forwarding of the goods. In the present case, the activities of clearing and forwarding of the Assessee are absent. The decision of the Hon ble Punjab & Haryana High Court was upheld by the Hon ble Supreme Court as reported in 2012 (25) STR J126 (SC). He further submits that the Assessee was registered with the Department under Business Auxiliary Service and therefore, the Revenue cannot change their stand .....

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t the Assessee entered into Depot Agreement with M/s The Lakshmi Mills Company Limited (hereinafter referred to as The Company ). The learned Advocate on behalf of the Assessee placed a copy of the agreement with letter dt.29.11.2000 of M/s The Lakshmi Mills Company Limited, before the Bench. On perusal of the agreement dt.01.04.1999, we find that M/s The Lakshmi Mills Company Ltd, was engaged in the manufacture and selling of yarn of various qualities and counts. The Company has set up Sales De .....

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bad 380 002. 2. The Company will dispatch their goods on self consignment (stock transfer) from their factories to their Depot at Ahmedabad covering transit insurance for each and every consignment they dispatch. 3. The Depot Managers shall be incharge of the Depot and responsible for the safe custody of the stocks of the Company in the Depot and shall maintain the stock register on day to day basis. 4. The goods entrusted to the Depot Managers for sales, will remain the sole property of the com .....

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arrival of the goods at Ahmedabad. Such Sales shall be in the name of the Company. No forward sales is to be offered by the Depot Manager. The Depot Managers shall not purchase or take the goods either themselves, or their relatives or nominees or benomies either directly or indirectly. 6. The definition of Clearing and Forwarding Agent under Clause (25) of Section 65 of the Finance Act, 1994, as it stood during the relevant period, is reproduced below:- Clearing and Forwarding Agent means any .....

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rson who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person - i) deals with or services or documents of title to such goods or services; or ii) collects payment of sale price of such goods or services; or iii) guarantees for collection or payments for such goods or services; or iv) undertakes any activities relating to such sale or purchase of such g .....

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ining records of the receipt and dispatch of goods and the stock available at the warehouse; f) Preparing invoices on behalf of the principal. 7. The main contention of the learned Advocate is that as per the Clause (6) of the agreement, the Assessee shall arrange sale of the product of the Company to genuine third party purchaser and therefore, it deals with the sale of the goods. It is also submitted that the Appellant was paid the commission for sale of the goods and therefore, it is covered .....

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e Company. On reading of the agreement as a whole, we find that the Assessee were engaged in maintaining the sales depot of the Company efficiently and to market the yarn manufactured by the Company. The Company appointed the Assessee as a Depot Manager to be in-charge of the depot and not as a Commission Agent or Consignment Agent. Clause (2) of the agreement stipulates that the Company will dispatch their goods on self consignment from their factory to their depot covering transit insurance fo .....

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sale of the goods in the market. The definition of Clearing and Forwarding Agent covers any service either directly or indirectly connected with clearing and forwarding operation in any manner. The expression in any manner has wide amplitude. The definition of Commission Agent would apply predominantly on sale or purchase of the goods. In the present case, we find that the appointment of the Assessee is not as a Commission Agent, but for Depot Manager, and therefore, it would cover under the def .....

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