TMI Blog2019 (6) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Agent Service. Hence, M/s. IEL will be liable for payment of Service Tax as a service provider in terms of the agreement and we uphold the demand for Service Tax. Time Limitation - HELD THAT:- The service, Clearing and Forwarding Agent Service has been the subject matter of much Litigation. There have been conflicting decisions at the level of various judicial fora regarding the activities which are covered under the definition of Clearing and Forwarding Agent Service. A perusal of the agreement indicates that the activity undertaken is in the nature of Consignment Agent which is subsumed within the definition of Clearing and Forwarding Agent Service - the Revenue is not entitled to raise the demand for the extended period of limitation. Appeal disposed off. - Appeal No. ST/105/2008, ST/314/2009 - FO/75373-75374/2019 - Dated:- 29-1-2019 - SHRI P. K. CHOUDHARY, MEMBER (JUDICIAL) And SHRI V. PADMANABHAN, MEMBER (TECHNICAL) Shri Ravi Raghavan, Harsh Shukla Advocates Shreya Mandra, CA for the Appellant Shri K. Chowdhary, Suptd. (A. R.) for the Revenue ORDER PER CORAM The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Rules. The net effect of such validating provisions was that any Service Tax already paid under the disputed categories on Reverse Charge Basis would continue to remain with the Government and any Refund Claims for such tax will not be entertainable. Consequent upon the amendments by Finance Act, 2000, the Jurisdictional Assistant Commissioner rejected the refund claim filed by M/s. IES vide his Order-in-Original dated 10/06/2003. The First Appeal against the said order was decided by the Commissioner (Appeals), vide order dated 29/03/2004. When the above order was appealed against in this Tribunal, the matter was remanded to the Commissioner (Appeals) for Denovo decision vide the Tribunal s Order dated 03/10/2007 reported as 2008 (9) STR 509 (Tri.-Kolkata). In the Denovo proceedings before the Commissioner (Appeals), the impugned order dated 06/10/2009 was passed in which he up-held the Order-in-Original rejecting the refund. This order is under challenge in the Appeal No. ST/314/2009. 5. The Appeal No. ST/105/2008 deals with the dispute for the subsequent period 2004-2005. The Department issued a further Show Cause Notice dated 21/04/2006 to M/s. Indian Explosiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. With reference to appeal No. ST/105/2008 following arguments were advanced:- (i) It was submitted that the Show Cause Notice dated 21/04/2006 had been issued by invoking the extended period of limitation to cover the demand for the period 2000-2001 to 2003-2004. He submitted that the demand for the above period under the category of C F Agent Service has been made on the basis of the agreement dated 29/08/1996 which was also the subject matter of the earlier dispute which is the subject matter of the other appeal. He relied on the decision of the Apex Court in the case of Nizam Sugar Factory Vs. Coll. Of CE reported as 2006 (197) ELT 465 (S.C.) and submitted that the Department was not justified in invoking the extended period of limitation for a second time after issuing an earlier Show Cause Notice for the same offence in earlier period. (ii) If the demand is restricted to the normal time limit, he submitted that the entire demand made under C F Agent Service would be hit by time bar. 10. The Ld. DR justified the impugned orders. He argued that the demand involved in the appeal ST/105/2008 is not hit by time bar. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of clause 3.2 of the agreement was to use its best endeavour to promote and market the products of the appellant. Clause 3.3 required the Agent to promote, market and sell the products of the appellant. According to clause 3.2.1 of the Agreement, the Agent was required to accept orders from the customers for effecting sale of the products. Clause 3.14 required the Agent to bear all distribution costs including customers servicing, credit evaluations, selling, advertising, marketing, transportation, transit losses and delivery cost pertaining to the products. As per para 7.2 of Agreement, for discharging the duties under the Agreement, the Agent was entitled to a commission of 21% of the net selling price of the products. 14. The Clearing and Forwarding Agent is defined under Section 65 (25) of the Finance Act, 1994 as under:- (25) 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. The above definition essentially covers a relationship be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra), Service Tax paid under the category of C F Agent Service, will not be refundable. Hence, we find no infirmity in the decision of the First Appellate Authority vide its impugned order dated 06/10/2009, up-holding the rejection of refund claim. We uphold the decision and reject the appeal No. ST/314/2009. 16. Next, we turn to Appeal No. ST/105/2008, the demand has been raised by Show Cause Notice dated 21/04/2006 for payment of Service Tax under the category of Clearing and Forwarding Agent service. The Lower Authority has examined the agreement dated 29/08/1996 (the same agreement which was examined in the other dispute covered appeal ST/314/2009). He has concluded that the activity is covered under the category of clearing and forwarding agent service and hence, liable for payment of Service Tax under Section 65 (25) ibid. In the discussion in the above paragraphs, we have examined the agreement dated 29/08/1996 and have come to the conclusion that M/s. ICI has acted as C F Agent of M/s. IES for providing clearing and forwarding agent service. Since the agreement has continued during the dispute period, the classification of the service will conti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We take up the appellant s contention on limitation first. The submission of the learned Counsel is that facts noted in the impugned order itself would show that the failure to pay tax, if at all, is the result of a bona fide belief by the appellant that the service in question was not taxable as clearing and forwarding agency service. Reference in this connection is made to para 26 of the Commissioner s order where the Commissioner has noted as under :- I find that two opposite views of the CEGAT/CESTAT are available on the issue of taxability of consignment agents i.e. the cases of Prabhat Zarda Factory and Mahavir Generics. Hon ble Supreme Court in the cases of Liberty Oil Mill Pvt. Ltd. v. CCE [ 1995 (75) E.L.T. 13 (S.C.)J and Novopan India Ltd v. CCE [ 1994 (73) E.L.T. 769 (S.C.) = 1994 (6) J.T. 80] have issued guidelines for interpreting the taxing statute. As per these guidelines, in case of ambiguity or doubt in an exemption provision, the same will be resolved in favour of the revenue and not in favour of the assessee. I feel that the CEGAT s decision in the case of Prabhat Zarda Factory is more appropriate in the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be confirmed. 11. We have already noted the observations of the Commissioner that I conflicting views had been taken by the Tribunal on the issue of taxability of consignment agent as clearing and forwarding agent. It is well settled that when different views are prevalent about the applicability of a tax, extended period is not available to the revenue for the purposes of raising demands. The present is such a case. The Tribunal itself had rendered conflicting decisions and the issue was subsequently decided by a Larger Bench [ 2007 (3) S.T.R. 321 (Tri. - LB)]. In this factual situation, we are of the opinion that the procedural failure on the part of the appellant was the result of bona fide belief that it was not liable to pay the tax and that extended period is not applicable in the facts of the case. 12. In view of what is stated above, the Appeal No. 25/06 of M/s. Bharat Aluminium Co. is allowed on the ground of limitation with consequential relief, if any. 19. The decision of the Tribunal in the case of Bhart Aluminum was affirmed by the Hon ble High Court, Chhattisgarh reported in 2012 (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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