TMI Blog2008 (4) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... in the tabular column. Particulars Appeal No. ST/1O8/2006 Appeal No. ST/ST/223/2006 Duty demand Rs. 34,40,560/- Rs. 63,53,085/- Interest and penalties Interest under Section 75 Penalty: Rs. 500 u/s 75A Rs. 100/day u/s 76 Rs. 5000/- u/s 77 and Rs. 34,40,560/- u/s 78 of the Act Interest under Section 75 Penalty: Rs. 500/- u/s 75A Rs. 100/day u/s 76 Rs. 1000/- u/s 77 and Rs. 63,53,085/- u/s 78 of the Act Show Cause Notice 25-9-2001 26-2-2004 Order-in-Original No. Date 2/2004 dated 11-1-2004 27/2004 dated 31-5-2004 Impugned Order-in-Appeal date 2/2005 dated 30-11-2005 1 2/06 dated 30-1-2006 Period of Dispute 1-9-1999 - 31-7-2001 1-8-2001 - 31-1-2004 Period within limitation April 2000 - July 2001 October 2002 - Jan 2004 3. Shri C. Shivadass and C. Venkatesh learned Advocates, appeared on behalf of the appellants and Shri R.P. Raheja, learned JCDR, for the Revenue. 4. We heard both sides. 5. The learned Advocates for the appellants stated that the appellant M/s. Cairn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods through pipeline service' arid have been paying service tax thereon. The Revenue proceeded against the appellants by way of issue of Show Cause Notice proposing to demand Service Tax on the ground that the appellants have been rendering 'clearing and forwarding agents service.' Penal action was also proposed. The lower authority confirmed the proposals in the Show Cause Notice and the Appellate Authority upheld the order of the lower authority. The appellants are highly aggrieved over the impugned order and therefore they have come before this Tribunal for relief. 6. The learned Advocate Shri G. Shivadass reiterated that the appellants are simply providing storage service and then the oil stored is transported by pipeline to the oil tankers that the oil tankers carry the oil to the refinery, which is actually the consignee of M/s. ONGC. They say the function of the appellant is only to store the crude oil received and then transport it through the pipeline. They cannot be considered as clearing and forwarding agents. He invited our attention to the definition of Taxable Service in the Finance Act, 1994 and also the following Trade Notices. (a) Trade Notice 59/1999 dated 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) Gujarat Chem. Port Terminal Co. Ltd. v. CCE C, Vadodara-II - 2008 (9) S.T.R. 386 (Tri.-Ahmd.) (c) Glaxo Smithkline Pharmaceuticals Ltd. v. CCE, Mumbai-IV - 2006 (3) S.T.R. 711(T) = 2005 (188) E.L.T. 171 (Tri.-Mum.) (d) Diebold Systems (P) Ltd. v. Commissioner of Service Tax, Chennai - 2008 (9) S.T.R. 546 (Tri.-Chennai) (e) S.R. Kalyanakrishnan v. CCE, Cochin - 2008 (9) S.T.R. 255 (Tri.-Bang.) = 2007 (83) RLT 602 (CESTAT- Bang.). 10. The Show Cause Notice has included the value of the "Port fee" which is recovered on actual basis by the appellants from ONGC in the computation of taxable value for the purpose of demanding service tax. It was submitted that even if the appellant is taxable under C F Agency, it can be charged to service tax only on service charges and not reimbursements. (a) Keralam Enterprises v. CCE, CUS ST Cochin - 2008 (9) S.T.R. 503 (Tri.-Bang.) (b) Jayalaxmi Enterprises v. CCE, Mangalore - 2008 (9) S.T.R. 19 (Tri. Bang.) (c) Scott Wilson Kirkpatrick (I) Pvt. Ltd. v. CST, Bangalore - 2007 (5) S.T.R. 118 (Tri.-Bang.) 11. The appellants were under the bona fide belief that their services are not covered under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agent. The taxable service has been defined as any service provided to a client, by C F agent in relation to clearing and for warding operations in any manner. The clearing and forwarding agents are engaged/appointed by manufacturer of goods (both excisable and non-excisable goods), producers and distributors of goods and shall also include such agents appointed for agricultural and mineral goods. Normally, there is a contract between the principal and the clearing and forwarding agent detailing the terms and conditions and also indicating the commission or remuneration to which the C F agent is entitled. A clearing and forwarding agent normally undertakes the following : (a) Receiving the goods from the factories or premises of the principal or his agents; (b) Warehousing these goods; (c) Receiving despatch orders from the principal; (d) Arranging despatch of goods as per the directions of the principal by engaging transport on his own or through the authorised transporters of the principal; (e) Maintaining records of the receipt and despatch of goods and the stock available at the warehouse; (f) Preparing invoices on behalf of the principal." 15. Moreover the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d an agent but between principal and principal. These agencies are neither receiving any despatch orders from the owners of the goods, nor are they arranging for the despatch of goods as per their directions by engaging transport, as is done normally by C F agents. They are also not carrying out any service directly or indirectly in connection with clearing and forwarding operations. Therefore, services rendered by such agencies, in relation to storage of cargo, cannot be considered to be in the nature of 'clearing and forwarding' and such agencies cannot be considered as "clearing and forwarding agents." 16. Further, in Circular No. 39/2/2002, dated 20-2-2002 the following is clarified. Normally C F agents do the job of clearing and forwarding. In a typical situation clearing forwarding agents are appointed in outstation location by manufacturers or wholesale distributors so that they may clear the goods, store them and then forward the goods according to the instructions of the Principal owner. Thus the person concerned is an agent and an agent is an authorized representative of a named principal owner. There is a contract between the principal (owner) and C F age ..... X X X X Extracts X X X X X X X X Extracts X X X X
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