CESTAT, AHMEDABAD
BENCH
Commissioner
of Central Excise, Vadodara
v.
Parekh Apparels
Mrs.
ARCHANA WADHWA, JUDICIAL MEMBER
and
M. VEERAIYAN, TECHNICAL MEMBER
FINAL
ORDER NO. A/2720/WZB/AHD/2007
SERVICE
TAX APPEAL NO. 85 OF 2004
OCTOBER 8, 2007
CLEARING AND FORWARDING AGENT
Section 65 of the Finance Act, 1994 - Clearing and forwarding agent -
Assessee was appointed as consignment agent by ITC for sale of its goods -
Assessee sold those goods on its own invoices at retail price for a commission
- Service tax was demanded from assessee treating it as a clearing and
forwarding agent - Whether assessee was merely a shopkeeper, who was selling
goods of principal under its own invoices and not on behalf of principal and,
therefore, it could not be treated as a clearing and forwarding agent for
purpose of service tax - Held, yes [Para 4]
Circulars
& Notifications - Trade Notice No. 59/99, dated 4-10-1999
>> Facts
The assessee was appointed
as consignment agent by ‘ITC’ for sale of its goods. The revenue considered the
assessee as a clearing and forwarding agent and demanded service tax from it.
On appeal, the Commissioner (Appeals) set aside the demand holding that
products of principal were supplied to the assessee on consignment basis who
sold the same to the customers, hence, the activity could not come within the
definition of services provided to client by clearing and forwarding agent.
On revenue’s appeal :
>> Held
The revenue in their
grounds of appeal had themselves observed that ‘ITC’ had appointed the assessee
as consignment agent for stocking, display, and sale exclusively from the
showroom of the consignor-branded apparels. It was also admitted in the appeal memo, that the assessee was to sell the goods at the retail
price for a commission of 2 per cent. There was no denial of the fact that such
sale was under the assessee’s own invoices and could
be to any person. Clearing and forwarding agents forward the goods on behalf of
the principal to the customer, directed by the principal only and are not free
to sell the same to any person. That was not the case in the instant case.
Merely because the ownership of the apparels did not pass on to the assessee,
it did not mean that the assessee became the clearing and forwarding agent. The
scope of the said service stands clarified by the Board and various circulars
of the Commissionerates. It was clear from the Mumbai
Commissionerate’s Trade Notice No. 59/99, dated
4-10-1999 that the clearing and forwarding normally receives the dispatch order
from the principal and arranges dispatch of the goods as per the direction of
the principal and prepares invoices on behalf of the principal. All those
factors were missing in the instant case. The assessee was merely a shopkeeper
who was selling the goods of ITC under its invoices. There was no infirmity in
the view taken by the Commissioner (Appeals). Accordingly, the appeal filed by
the revenue was to be rejected. [
>> Cases referred to
Mahavir Generics v. CCE [2007] 6 STT 523 (
D.S. Negi for
the Appellant. S.R. Dixit for the Respondent.
nn