CESTAT, BANGALORE BENCH
CLEARING AND FORWARDING AGENT
Section 65 of the Finance Act, 1994 - Clearing and forwarding agent - Whether for purposes of service tax a consignment agent should be deemed to be a clearing and forwarding agent and services rendered by a consignment agent are liable to service tax under category of ‘Clearing and forwarding agent’ - Held, yes [Para 5.2]
Circulars and Notifications - CBEC’s Circular No. B43/7/97 - TRU, dated 11-7-1997.
The assessee was appointed as a consignment agent by a company under an agreement. It had paid service tax under the category of ‘Clearing and forwarding (C & F) agent’ under a mistaken notion. On realization of said mistake, it filed refund claim, which was rejected on the ground that the services rendered by it would amount to the services of C & F agent as per the Act. The Commissioner (Appeals) upheld the original authority’s order.
On appeal :
Commissioner of Central Excise, Belgaum
Service tax on C & F agents was introduced with effect from 16-7-1997. The Board’s Circular F. No. B. 43/7/97 - TRU, dated 11-7-1997 has clarified the scope of the activities of a C & F agent [Para 5.1]
The services rendered, in the instant case, could be compared with the clarification given by the Board. It would not be incorrect to hold that the assessee carried out the functions of C & F agent in the light of the Board’s clarification and also in terms of its agreement with its principal. One should also keep in mind that even while defining C & F agent, ‘consignment agents’ are included in the said definition in the Act. Therefore, it is correct to say that as far as service tax is concerned, a consignment agent should be deemed to be a C & F agent and the services rendered by a consignment agent are liable to service tax under the category of C & F agent. In such circumstances, the assessee did not have a strong case. It had been rightly paying tax under the category of C&F agent and no refund would arise. In the result, the impugned order-in-appeal was legal and correct. There was no reason to interfere with the impugned order and the appeal was to be dismissed [Para 5.2]