TMI Blog2017 (10) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... that principal. Such a function can hardly be re-designed to describe the very reverse for delivery of procurements required by the principal. It would appear that the tax authority in its anxiety to deny the abatement that is the entitlement of provider of ‘goods transport agency service’ sought to bring the activity under an omnibus head that being bereft of a specific definition could be resorted to for that purpose, failed to identify the various services that were elements of this composite contract. Some of those could possibly have been taxable services. Nevertheless, section 65A of Finance Act, 1994 lays down the principles that should guide classification of composite services. It would appear that transportation is the most pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Coal India Ltd for transportation of this coal from the premises of supplier to the factory of M/s Grasim Industries Ltd at Nagda. The contract had specified the parameters of the coal to be supplied and it devolved on the appellant to undertake responsibility for conformity with these parameters which they were qualified to do. The risk of non-conforming coal being supplied was eliminated by inclusion of penalty and bonus clauses in the agreement. The appellant was to receive the consolidated consideration per ton as specified in the various contracts. 2. During this period, appellant had been paying tax on this consideration as provider of goods transport agency service and discharging tax liability thereon after availing abatement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d value after re-classifying the service. Apparently, the notice issuing authority lacked confidence in being able to convince that the activity could, justifiably, be re-classified. We have heard Learned Counsel for appellant and Learned Authorized Representative besides perusing the records. 5. The case of Revenue for re-classification lies in the breadth of responsibility assigned to the appellant in the agreements. It is contended that the appellant is not a mere transporter of goods but also supervises, on behalf of M/s Grasim Industries Ltd, the loading of coal with intent to ensure that the specified quality parameters are not breached. According to Revenue, the risk and responsibility assigned to appellant is akin to that underta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of coal rakes by the Railways; (ii) expediting and supervising the loading and labeling of rail wagons; (iii) drawing the samples of coal loaded on the wagons; (iv) complying with the formalities relating to payments for freight to the Railways; (v) dispatching of rail receipts to Ambuja companies and cited with approval the decision of the Larger Bench of the Tribunal in Larsen Toubro Ltd v. Commissioner of Central Excise, Chennai [2006(3) STR 321 (Tri-LB)] which, though deciding upon the coverage of commission agent within the scope of taxability as clearing and forwarding agent , enlarged upon that the normal activities of a clearing and forwarding agent thus 7 (i) receiving the goods from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in to clearing of the goods and thereafter forwarding those goods to a particular destination, at the instance and on the directions of the principal. xxxxx 12. Movement of the coal is under the contract of sale between the coal company and the Ambuja companies. Even the coal is loaded on to the railway wagons by the coal company. The goods are not under any legal detention from which they need to be freed by the appellant. Not only this, destination of the goods is known to the coal company and the railway rakes are placed by the coal company for the said destinations. The destination is the factories of the principal itself, namely, Ambuja companies, where the coal is to be delivered by the coal company as per pre-determine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. It would appear that the tax authority in its anxiety to deny the abatement that is the entitlement of provider of goods transport agency service sought to bring the activity under an omnibus head that being bereft of a specific definition could be resorted to for that purpose, failed to identify the various services that were elements of this composite contract. Some of those could possibly have been taxable services. Nevertheless, section 65A of Finance Act, 1994 lays down the principles that should guide classification of composite services. It would appear that transportation is the most prominent of these and the classification that was declared by the appellant cannot be faulted for its legality. More so, as the impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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