TMI Blog2006 (6) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... d Vaman Pharma Pvt. Ltd. v. CC., Bangalore [2006 (1) S.T.R. 274 (Tribunal) 2006 (130). ECR 0209 (Tri-Bangalore)]? 2. Section 65(23) of the Finance Act, 1994 reads as follows: "(23) Clearing and forwarding agent" means any person who is engaged in providing any service, either directly or indirectly, connected with the clearing and forwarding operations in any manner to any other person and includes a consignment agent." 3. As per Section 65(90), any service provided to a client by a clearing and forwarding agent in relation to clearing and forwarding operations in any manner would amount to taxable service; 4. In this context, in the agreement as entered into by the appellant with Cipla Limited on 1-6-1999, the following passage appears: "Whereas, therefore, CIPLA was on the look out to identify a suitable agency to take up such activities, and whereas MEDPRO came forward to act as C F agents "WHEREAS MEDPRO has offered to provide handling, clearing and for warding services for the said products to Cipla's various stockists in Tamil Nadu region and also to various distribution centres all over the country…" "Cipla -hereby appoints MEDPRO as its agent to receive, store ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overage for the definition of C F Agent' under Section 65(23), it had been rather restrictive while defining Taxable Services' under Section 65(90). To support his contention, the learned counsel seizes the ratio of the decision in the case of M/s. Mahavir Generics, Bangalore, - Order ST F.No. 12/04-NB (A) dated 27-4-2004, reported in 2004 (170) E.L.T. (Tribunal) = 2006 (3) S.T.R. 276 (Tribunal), wherein it was held that when products of principal were supplied to the appellant on consignment basis and sold by appellant to the customers, such activity cannot be taxed under 'C F Agent". 9. The learned Counsel further argues that as in the same year, the Legislature introduced three new categories, viz., customs clearing agent, steamer agent; and goods transport operators for levying service tax; by bringing all these three "ancillary" services, the Legislature had clearly intended to have a very restrictive scope definition for 'C F Agents'. 10. During the course of hearing, the Bench had an occasion to observe that the Legislature had preferred the use of word "operations" while defining the taxable service, and not "activities". It was observed that the expression "clearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon the definition of "forwarding agent" as defined in the Penguin Business Dictionary, where the word "clearing" is missing: "Forwarding Agent - A General Agent who specializes in moving goods from a factory or port of entry to their proper destination. Such an agent normally owns the transport necessary for this work and often arranges freight and customs formalities for the principal". 14. The learned Counsel also spent considerable time in anatomizing the word 'or' by referring to various 'sub-clauses under Clause (90) of Section 65 of the Act wherein the Legislature had specifically opted for this word. As a part of this wheeze, he referred to sub-clauses (a); (g); (h); (i); and (q), all of which have employed the word "or" and not "and", arguing all through that the Legislature could have chosen "or", had it intended to tax either "clearing" or "forwarding" activity. The Revenue side 15. The learned Authorized Representative (SDR) of the Department submits that there are instances where the word "and" which is normally conjunctive could be used as disjunctive to derive the right sense of meaning. In this context, he relies upon the ratio of decisions in Ishw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Appellants Reply 18. At this juncture, the learned counsel for the appellant, states that the Hon'ble Supreme Court in the case of Ape Belliss India Ltd. v.UOI, 2001 (132) E.L.T. 8 (S.C.) = (2001) 9 SCC 96, had an occasion to examine a Tariff Public Notice No. 56/78 dated 19-7-1978, which reads thus: "It is for the information of the importers, Customs House Agents and all other concerned that alloy steel which is known as stainless steel in the trade and having more than 11% chromium will be continued to be considered as stainless steel for the purposes of classification under the Customs Tariff Act, 1975". 19. While deciding this issue, the Hon'ble Court made the following observations: "6…… A plain reading of the Section (sic Tariff Public Notice) clearly shows, as contended by Mr Bhatt, that for an alloy steel to be considered as stainless steel, it will have to satisfy two conditions i.e the allow steel should be known in the trade as stainless steel and further, it should contain 11% chromium as a component of the allow 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 stai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can prepare the various documents required for the different countries, giving advice on those, which the exporter must by law prepare himself. Freight forwarders are often called clearing agents or act as a clearing agent when dealing in imports." (emphasis added) 24. He submitted that in view of this definition, 'Freight Forwarders' evidently end up performing the functions of a clearing agents or act as 'Clearing Agents', and hence a forwarding agent cannot extricate himself from being branded as a clearing agent, due to the inter-connection or inter-dependence that exists between these two activities. 25. He also refers to a Website Publication called 'Trade point Tanzania Dar e Salaam". which acknowledges that "professional forwarders (popularly known as 'Clearing Agents') are to process documentation and other procedures for clearing goods". Further, FIATA an International Association of 'Freight For warders' situated in Switzerland have also adopted an official description of 'Freight Forwarding and Logistics Services', which can be tailored to meet the flexi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re known by different names in different countries, such as "customs house agent", "clearing agent", "customs broker", "shipping and forwarding agent" and in some cases acts as a "principal carrier", that is, the main carrier. But one aspect of their activities which is common to all of them, whatever the name they use, is that they all sell their services only." 30. The learned SDR also relies upon the Principles of Statutory Interpretation by Guru Prasanna Singh, Ninth Edition, 2004 and draws our attention to the expression "sports" and "pastimes". In interpreting the said expression, Lord Hoffman said "As a matter of language I think that 'sports and pastimes' is not two classes of activities but a single composite class which uses two words in order to avoid arguments over whether an activity is a sport or pastime. [R.v. Oxfordshire Country Council, (1999) 3 All ER 385 p. 396 (HL)]. In the same way, it was submitted that 'C F Operations" should belong to the same class of activities, though they could be misconstrued as belonging to different activities. 31. We have heard both sides and perused the record. On a fresh look at the whole issue and after taking into account the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing and Forwarding Agent", so as to save him from the tax. Some customers may want only clearing operations, while some forwarding, and others both. The expression "clearing and forwarding operations" is a compendious expression of nature of services offered, any of which will bring the service providers in the tax net of this category. Moreover, in the process of forwarding operations - clearance stages may arise such as at octroi posts or subsequent transits. 33. We, do agree that it is the context in which the word "and" is positioned, being sandwiched between the words "clearing' and "forwarding" has to be looked into, while interpreting the meaning. Like the legendary Trishanku, the word "and" is dangling between "clearing" and "forwarding" - neither divorcing from the Heavens, nor from the Earth. In such a positioning, it is not possible to segregate the holistic concept of "clearing and forwarding" into divisible activities, either or both of which can be provided for answering the customers' needs. 34. It has also been argued before us at length that whenever any ambiguity exists, the decision should be in favour of the assessee. Thanks to the competent assistance avail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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