TMI Blog2002 (2) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... n the said appellants. In addition, penalties have also been imposed on the second appellant, Mr. Pradeep Kumar Arya who is director of M/s. Prabhat Zarda Factory. 2. The appellants, M/s. Prabhat Zarda Factory, are engaged in the manufacture of tobacco product. The said appellants entered into an agreement dated 25-10-89 with M/s. Ratna Zarda Company (hereinafter referred to as RZC), appointing the said M/s. RZC as an agent of M/s. Prabhat Zarda Factory. As per the terms of the said agreement, M/s. RZC was appointed as agent for the purpose of marketing the appellants' product and for the function of booking of orders, managing, supervising and developing of the market. The said M/s. RZC was also to act as the appellants' attorney to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is entirely different. As such, the question of payment of Service Tax does not arise. Initially, they also took a stand that it is the receiver of the commission who was to pay Service Tax on the quantum of commission received by him and they cannot be made liable to pay the same. However, during the course of personal hearing, they contended that after the amendments in Service Tax Rules through the Finance Bill, they should have been issued a fresh show cause notice. During the course of personal hearing before Commissioner they filed figures of the value of sales effected through their agent and the amount of commission paid by them during the period 1-11-98 to 31-8-99. 5. After considering the submissions made by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Principal by employing transport of his own, maintaining records of the receipt and despatch of goods and the stock available at the warehouse and preparing invoices on behalf of the Principal. He submits that inasmuch as M/s. RZC is not doing any of the activities enumerated in the said Trade Notice, they cannot be called as clearing and forwarding agent and the commission so earned by them cannot be made liable to Service Tax and the appellants cannot be held guilty of non-payment of Service Tax. 7. Shri Narasimhan also urged that after amendment in the Service Tax Rules through the Finance Bill, 2000, the Revenue authorities should have issued a fresh show cause notice inasmuch as the earlier show cause notice dated 1-2-99 had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly few of the activities undertaken by clearing and forwarding agent as is apparent by the use of the expression 'normally'. As such, it is clear that the activities given in the said Trade Notice are not exhaustive but are inclusive in nature and describes the jobs to be normally undertaken by the clearing and forwarding agent. As per the definition of clearing and forwarding agent, he is a person who is engaged in providing 'any' service, either directly or 'indirectly' connected with clearing and forwarding operations in 'any' manner to any other person (Emphasis provided). The use of expression 'any' and 'indirectly' in the said definition of clearing and forwarding agent, is indicative of the fact that the scope of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should have been issued a fresh show cause notice. The Commissioner has observed that through the Finance Bill, 2000, the Government of India has validated certain action taken under Service Tax Rules. As per Clause 113(1) of the Finance Bill, 2000, any action taken or anything done or purported to have been taken or done at any time during the period on and from the 16th day of July, 1997 and ending with the day, the Finance Act, 2000 receives the assent of the President shall be deemed to be valid and always to have been valid for all purposes, as validly and effectively taken or done. Accordingly, he has held that the show-cause notice issued on 9-2-99 is a valid show cause notice. We do not find any infirmity in the above views of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
