9911796707
TMI Blog2004 (4) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... ia. When service tax was introduced on Clearing and Forwarding agent services under Chapter 5 of Finance Act, 1994 w.e.f. 16-7-1997 the appellants got themselves registered with the Central Excise authorities and started paying service tax on the commission received by them from M/s. Cipla Limited as consignment agents. It is contended that later on realizing that the services rendered by them would not amount to a taxable service as one rendered by a Clearing and Forwarding agent they surrendered the certificate of registration under letter dated 29-1-2001. The Assistant Commissioner of Central Excise, Service Tax Cell, Bangalore-I Commissionerate vide his order dated 31-12-2001 directed the appellant to continue their registration as Clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the category of "clearing and forwarding agents". According to the Commissioner the appellants are providing service of receiving, storing and distributing the goods manufactured by M/s. Cipla Limited and therefore, they are covered by the definition of "clearing and forwarding agent" and thus liable to pay service tax. 4. The learned Counsel for the appellant took us through the terms of the agreement with M/s. Cipla Limited and contended that under the agreement they are not providing any service to a client in the nature of clearing and forwarding operation. Even if the consignment agents are brought under the definition of "clearing and forwarding agents" unless the service rendered by a consignment agent is made taxable by making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing agent who receives goods for transit, issues bills of lading, makes contracts in his own name for carriage, is as to a person with whom he contracts for the delivery of goods, a 'common carrier" The Concise Commercial Dictionary - "Forwarding agent- An agent who attends to the collection, forwarding and delivery of goods." In Halsbury's Laws of England Fourth Edition Volume 5 "Forwarding Agent" is dealt with as follows - "A forwarding agent is one who carries on the business of arranging for the carriage of goods for other people. It must be clearly understood that a forwarding agent is not, in general, a carrier; he does not obtain possession of the goods; and he does not undertake the delivery of them at the other end. All that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat even when services are indirect but the same are connected with the clearing and forwarding operations in any manner of the other persons, it would be covered by the definition of clearing and forwarding agent. 7. On going through the terms of the agreement between M/s. Cipla Limited and the appellant we notice the following clauses as relevant : 1. AND WHEREAS the Principal has agreed to appoint the AGENT as its Consignment Agent for the sale of the Product throughout India on the following terms and conditions : - 2. The Principal will supply the product from any of its depots and loan licence (as per Annexure 1) to the Agent on a consig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... month's sales. (b) The Agent will be entitled to a commission of 9% on net price (excluding commission and sales tax) on liquid preparations. The commission so calculated shall be paid to him directly on the previous month's sales. 8. The agreement, with specific reference to the clauses quoted above, would show that the appellant was not acting as a clearing and forwarding agent. Unless its service can be treated as one to a client by a clearing and forwarding agent in relation to clearing and forwarding operations in any manner, the service cannot be taxed even if the consignment agent is brought under the definition of clearing and forwarding agent. Under the scheme of the Finance Act, 1994 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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