9911796707
TMI Blog2022 (9) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... 78 of Finance Act, 1994 as well as recovery of Rs. 2,89,99,396 as tax dues for period thereafter ending March 2015. 2. The essence of the allegation for both periods against the appellant herein, according to the first of the impugned orders, is '2.....Providing services falling under the taxable category of 'Clearing & Forwarding Agent Services' but not registered under the said category of service. They appears to have vivisected the services so provided to their clients and thereby indulged in evasion of service tax on the consideration received, reflected as 'transportation income' in their books of accounts claiming to be the consideration received on account of 'GTA Services' so provided to their clients wherein the responsibility to meet the service tax liability lies with clients under reverse charge with 75% abatement.' 3. The argument of Learned Counsel for applicant is that the legislative disbarment of levy of tax on 'goods transport agency' service in the hands of the provider has been sought to be overcome by inclusion of the value thereof in 'support service of business and commerce' on which liability has been discharged by them by contriving the scope of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and with intent to extract levy that is not authorised by law. He contends that the factual convergence of the same provider and same recipient does not, either by logic or in accordance with law, justify such aggregation. He submits that expansion of scope of business does not alter the nature, and flexibility, of the existing operations which, admittedly, had not been proposed by service tax authorities as taxable in the hands of the appellant until after the additional engagement with the existing recipients fructified. 7. Pointing out that the activity undertaken by them does not conform to description of the taxable service in section 65(105)(j) of Finance Act, 1994 or to the definition of 'clearing and forwarding agent' in section 65 (25) of Finance Act, 1994 he submits that the decision of the Hon'ble Supreme Court in Coal Handlers Pvt Ltd v. Commissioner of Central Excise, Range Kolkata-I [2015 (38) STR 897 (SC)] on the imperative of fitment within the definition had been ignored by the adjudicating authority as also the legal intent of distinguishing 'clearing and forwarding' from 'goods transport agency' in the decisions of the Tribunal in Toll India Logistics Pvt Ltd v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a-I [2015 (38) STR 897 (SC)]. 10. As it is the tax authorities who have sought to re-classify the service with the objective of enhancing the assessable value, it would be appropriate to ascertain the discharge of onus devolving on them before venturing upon the appropriateness of the entry within which the appellant herein has placed itself. It is common ground that the value excluded by tax, by separate charge on the two 'taxable services', is that of freight on which, admittedly and but for the attempt at invoking of 65A of Finance Act, 1994 and section 66F of Finance Act, 1994, levy on provision of 'goods transport agency' service falls to the recipient in the those circumstances. There is no allegation, let alone a finding, that the tax arising therefrom has not been discharged by 'person liable to tax' and, in the absence of such, may well have the implication of tax administrators unwarrantedly enriching the exchequer. Else, the impugned order, by obliviating the abatement intended by statute to exclude the non-service component of freight, carries the stain of disobeying of the law. 11. The definitions, of provider i.e., '(25) "clearing and forwarding agent" means any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispatch orders from the principal, arranging dispatch of the goods as per the instructions of the principal by engaging transport on his own or through the transporters of the principal, maintaining records of the receipt and dispatch of the goods and the stock available on the warehouses and preparing invoices on behalf of the principal. The Larger Bench rightly enumerated these activities which the C&F Agent is supposed to perform.' in re Coal Handlers Pvt Ltd but, to us, it appears to highlight the essentiality of both clearing and forwarding be handled by the provider of service to qualify as such agency; delivery to a particular destination is, undoubtedly, effected by the appellant herein, but that is no less that of providing transporting and it is only with the addition of clearing that the transformation perceptibly occurs. Considering the complexities, as well as statutory responsibility devolving on a manufacturer under Central Excise Act, 1944, clearance by an external entity is not even in the realm of conjecture and, therefore, does not concern the appellant. 13. In re Cadila Healthcare Ltd, the issue before the Hon'ble High Court was the eligibility, in the contex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any stipulation to that effect. affords no support for the stand adopted in the impugned order which, in any case, has not acknowledged the restricted scope thereto. 15. On the other hand, the two services sought to be amalgamated are not only independently taxable but differs in the mechanism of collection and should, intuitively, be immiscible. The provisions of section 65A of Finance Act, 1994 and section 66F of Finance Act, 1994 have not been appreciated in its context. The said statutory enablement is intended to be invoked when the nature of the service, and the consideration thereto, are not perceptibly divisible and differential treatment necessitates adoption of the appropriate rate of tax to the whole. In the present dispute, the rate of tax does not pose any difficulty; it is only the availability of abatement to isolate the 'service' component and the transference of responsibility to discharge liability that distinguishes. 16. Consequently, we have no doubt that the two services are rendered independently even if the transactions of the appellant are with the same recipient and, therefore, is not 'clearing and forwarding agency' service. The treatment of 'goods t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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