RAMNATH & CO. PVT. LTD. Vs. COMMISSIONER OF SERVICE TAX
LAWS(CE)-2015-4-20
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on April 06,2015

Ramnath And Co. Pvt. Ltd. Appellant
VERSUS
COMMISSIONER OF SERVICE TAX Respondents

JUDGEMENT

- (1.)WHEN the appellant was carrying out an activity of Del -credere Agency, Revenue has held that service provided by the appellant of the following nature shall be clearing and forwarding agency: - -
(2.)"i. To organize, propagate, advertise and promote the sale of products in India
ii. To establish close coordination and connection between RIL and the customers and/or potential customers;

iii. To Indent/Order acceptance form as prescribed by RIL shall be filled in and signed by the Assessee and submitted to RIL.

iv. From time to time and at least once in every calendar month submit to RIL a market report or survey based on their estimate of the volume of competitor's business. Such reports shall also contain information and details regarding the market potential and prospects of business for the products and any other additional information as required by RIL from time to time.

v. Furnish the true and correct information and details regarding the financial soundness, reputation and goodwill of the customers in the market, from time to time.

vi. To collect the price of the product from the customers and remit in RIL. If the sale proceeds are not collected by the Assessee within the credit period from the customers such outstanding together with interest as per the policy of RIL, shall be paid forthwith without demur by the Assessee to RIL.

vii. In consideration of the services rendered by the Assessee, RIL will pay a commission of certain amount per MT of the product sold by the Assessee.

viii. Assessee as Del -credere Agent undertakes to procure and otherwise submit to RIL all necessary declarations, forms and documents, required for Sales Tax in respect of the sales made by RIL through the Assessee."

The term 'clearing and forwarding agency' is defined under Section 65(25) of the Finance Act, 1994 meaning any person which is engaged in providing any service either directly or indirectly with the clearing and forwarding operation in any manner to any other person and includes consignment agent. This definition of the term 'clearing and forwarding agent' makes clear that activity should be confined either directly or indirectly in connection with the clearing and forwarding operation. Any other operation, not connected to such activity shall not fall under the scope of clearing and forwarding.

(3.)THE appellant is found to be a del -credere agent who in the commercial world guarantees recovery of the debt. Even reading of the scope of the activities carried out by appellant as depicted in the appellate order does not appeal to common sense that the appellant carried out clearing and forwarding service when Department has not brought out which are the consignments he cleared and origin and destination of the goods for forwarding.
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