- (1.) CIVIL APPEAL NO. 7215 OF 2004 CIVIL APPEAL NO. 5159 OF 2013 Appellants in both these appeals are the assessees and the issue involved in these appeals is common. Both the appellants provide certain services as Agents under the contracts signed with their respective Principals. The issue is as to whether such services provided by them would label them as Clearing & Forwarding Agents (for short, 'C&F Agents') and, thus, make them liable to service tax in accordance with the Finance Act, 1994 (hereinafter referred to as the 'Act'), as amended from time to time. Since the issue to be decided in both the appeals is identical and also arises almost in the same factual background, it would serve our purpose if we reproduce the facts from Civil Appeal No. 7215 of 2004.
(2.) The appellant in this case is providing certain services as Agent. Such services are provided to M/s. Gujarat Ambuja Cements Limited and M/s. Ambuja Cements Eastern Limited (hereinafter collectively referred to as 'Ambuja companies'). At the material time, these were public sector undertakings under the Government of Gujarat. These industries need coal as a raw material for production of cement, which is the main manufacturing activity undertaken by the said companies. Industries that need coal as a raw material generally approach the Ministry of Industries, Government of India with their requirements. The Ministry of Industries, after enquiry, recommends to the Ministry of Coal the quantity that is required to be supplied to such industries. Thereafter, the Ministry of Coal, as per the norms prescribed, allots the coal to these industries through the Long Term Linkage Committee indicating the coal companies and the location from which coal can be made available to them. While fixing the locations from where the coal is to be supplied to such companies, the Committee takes into account the Railways commitment for movement of the coal. The Railways is responsible for placing of rail rakes according to the programme. To maintain constant liaison with the Railways for the actual placing of coal rakes, such companies generally appoint its Agents. The aforesaid Ambuja companies, for this purpose, had appointed the appellant for this purpose and a contract was entered into between the said Ambuja companies and the appellant. Under this Agency agreement, the appellant was required to undertake the following activities on behalf of the Ambuja companies: (i) following up the allotment of coal rakes by the Railways; (ii) expediting and supervising the loading and labeling of rail wagons; (iii) drawing the samples of coal loaded on the wagons; (iv) complying with the formalities relating to payments for freight to the Railways; and (v) dispatching of rail receipts to Ambuja companies.
(3.) The issue that arose for consideration was as to whether aforesaid services were liable to service tax under the provisions of the Act. By the said Act, sub-section (25) was inserted in Section 65, which defines C&F Agent as under: "(25) "clearing and forwarding agent" means any person who is engaged in providing any service, either directly or indirectly, connected with the clearing and forwarding operations in any manner to any other person and includes a consignment agent;" We may also note that the taxable service as provided in Section 65(48)(j) of the Act in relation to service of C&F Agent means 'any service provided to a client, by a clearing and forwarding agent in relation to clearing and forwarding operations in any manner'.;