TMI Blog2023 (11) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... f the agreement,, the subsidiary company retains a 15% commission of the ultimate sale price to the third parties for each shipment or part thereof and bank transfer the reaming 85% proceeds to the appellant. The appellant are booking the said expenses under the head selling expenses as commission on sales (export). There is difference between commission agent and consignment agent. Consignment agent actually deals with the goods, when he receives the same from the principal and dispatches them on the direction of the principal, to the ultimate customer. Consignment agent may not be even associated with the procurement of orders or does not directly deal with the sale purchase. He is acting on behalf of the principal and deals with the movement of the goods as per the direction of the principal. On the other hand commission agent is only concerned with the procurement of orders for which he may receive the fixed amount along with some percentage amount. The Subsidiary company is also undertaking the activity of clearing and forwarding agent. No clause of the agreement provides that subsidiary company also undertaking any marketing or promotion activity for the sale of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant is not providing Business Auxiliary Services to the appellant. Subsidiary company of the appellant is acting as consignment cum clearing and forwarding agent. Payment made by the appellant to subsidiary company is shown in the books of account of the appellant as Commission on Sales (Export). The department seeks to tax this amount under the category of Business Auxiliary Services alleging that subsidiary company is acting as Commission agent for the appellant. This allegation made by the department is clearly unsustainable and the activity undertaken by their subsidiary company is classifiable under clearing and forwarding agent service. 4. By relying the definition of consignment agent and consignment he further submits that consignment agent can act as an intermediary between the seller and the purchaser, by receiving the goods from the seller and transmitting the same to the purchaser. In the present case also, the subsidiary company as receiving the goods from the appellant on consignment basis and undertaking the clearing and forwarding activity in USA in order to transmit the same to the customers of the appellants, therefore, the activity undertaken by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e nature of the services provided which is a trite law. The contention of the revenue that the appellant have paid the commission on sales (based on Balance Sheet nomenclature) therefore, acted as commission agent, is incorrect in law as well as on fact. He placed reliance on the following judgments. (i) Moped India Limited. -1986(23) ELT 8 (SC) (ii) Hindustan Gas Industries Ltd. -1991(54) ELT 383. 10. He further submits that the show cause notice had been issued to the appellant on 02.09.2011. The period in dispute is April 2006 to March 2011. The extended period of limitation cannot be invoked in the present case as there was no suppression of facts with intent to evade payment of service tax. The Appellant have maintained regular books of accounts shown as the commission paid in the P L account of the appellant. The appellant has shown the same in the income tax returns. The demand in the present case is based on the books of accounts maintained and provided during the course of investigation only. The Appellant were under bonafide belief that they were not liable to pay Service tax. He placed reliance on the following judgments:- (i) Continetal Foundation vs. CCE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85% proceeds to its Indian Parent Company, Enbee Education Centre Pvt. Ltd. within 360 days of the invoice date. Clause 3 provides for port of loading and destination. According to this clause, the port of loading is to be determined at the seller s choice and the port of destination shall be ASWP CIF BASIS ANY USA PORT Clause 4 provides the documentation details. This clause provides that following documents must be in English language and shall be sent directly to the buyer or to the buyer s bank within 21 working days from the bill of landing date. (i) 3/3 set of bill of lading (3 original and 3 copies) (ii) Certificate of Origin, issued by the chamber of commerce of the country of origin (iii) Signed commercial invoices in the name of buyer, (iv) Packing list of shipment Clause 5 provides that the seller shall provide insurance at his sole expenses and responsibility. Clause 6 provides for vessel discharge and terms of delivery. Clause 6.4 Provide that all the import expenses on cargo at the port of destination are sole responsibility of the buyer. The Buyer guarantees it has authority to import the cargo at the destination port. Clause 6.6 prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the appellant subsidiary company is acting as consignment cum clearing and forwarding agent. However there is difference between the terms consignment agent and commission agent . This distinction is also clarified in Board Circular No. 59/8/2003-ST dated 20.06.2003. The relevant portion is reproduced as below: It may be appreciated that the nature of service provided by a Consignment agent is different than that provided by a commission agent. A consignment agent s job is to receive the goods from the principal and dispatch them on the directions of the principal, whereas a commission agent s job is to cause sale/purchase on behalf of another person. Thus, the essential difference is that a commission agent sells or purchases on behalf of the principal while consignment agent receives and dispatches the goods on behalf of a principal. It is possible that a person may be a consignment agent as well as a commission agent. Such a person would already be covered in the category of Clearing and Forwarding agent and would be liable to pay service tax in that category. In other words, the present exemption is available only to such commission agent who is not a consignmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
