ORDER
S.L. Peeran, Member (J)
1. The stay and appeal are taken up together for disposal as the issue is covered by this Bench’s Final Order No. 848/2007 dated 31.7.2007 rendered in the case of CCE v. Transasia Sales Syndicate, Bangalore.
2. This appeal arises from Order-in-Appeal No. 126/2006 CE dated 16.11.2006 by which the Commissioner (A) confirmed the Order-in-Original No. 2/D/II/2006 dated 18.1.2006 passed by the Assistant Commissioner of Central Excise, Division-II, Bangalore confirming Service Tax of Rs. 2,08,283/- besides penalties in terms of the order.
3. The Revenue proceeded against the assesses to bring them within the category of “Clearing and Forwarding Agent’s Service” for the period 2001-2003. The allegation against them is that they have received commission as a ‘Consignment Agent’, hence they should be treated to fall under the above noted category. The assessee contested the department’s contention and contended that the activity of ‘Consignment Agent’ cannot be considered to be that of ‘Clearing and Forwarding Agent’ for the purpose of paying Service Tax. However their pleas were rejected by the Original Authority and Commissioner (A) also did not accept the various contentions raised by them with regard to non-coverage under the said heading.
4. The learned Counsel submits that this very issue was subject matter of decision in the case of CCE v. Transasia Sales Sydicate by Final Order No. 848/2007 dated 31.7.2007. This bench held that the ‘Consignment Agent’ cannot be considered as coming within the category of ‘C &F Agent’. The copy of the final order is produced.
5. The learned JDR reiterated the department’s view.
6. On a careful consideration, we notice that this very issue on the very facts was considered in the Revenue appeal against M/s. Transasia Sales Syndicate (Final Order No. 848/2007 dated 31.7.2007) and this Bench after due consideration held in Para 5 that a ‘Consignment Agent’ cannot be brought within the category of ‘C & F Agent’. Para 5 of the above noted Final Order is reproduced herein below.
5. We have gone through the records of the case carefully. Revenue has relied on the decision in the case of Prabat Zarda Factory. However, the Larger Bench, in the case of Larsen and Toubro Ltd. v. CCE, Chennai 2006 (3) STR (Tri.-LB), has overruled the decision in the case of Prabat Zarda Factory. Therefore, Revenue’s reliance on the above mentioned decision is not of much consequence for their case. In our view, the Mahavir Generics Order has clearly brought out the distinction between ‘Clearing & Forwarding Agents’ and ‘Consignment Agents.’ A Clearing & Forwarding Agent normally arranges the despatch of goods as per the directions of the principal by engaging transport on his own or through the authorized transporters of the principal. In other words, he does not have the right to sell the goods. This is the subtle distinction between C & F Agent and the Consignment Agent. In the present case, the Consignment Agent sells the goods and gets a commission. In the Larson and Toubro case, in para 9.2., the functions of the Clearing & Forwarding Agent are furnished. It has been held that a Commission Agent engaged to procure, orders and not entrusted with the work of clearing and forwarding of the goods would not be covered under C & F Agents. In the Chandan Chemicals case, the contention of the Revenue that a Commission Agent does not physically deal with goods and upon dealing with goods, he becomes a clearing and forwarding agent has not been accepted in the light of the statutory definition of Business Auxiliary Services. In the light of the above decisions, we hold that the decision of the Commissioner (Appeals) is correct Revenue’s appeal has no merits and the same is rejected.
7. The above finding clearly applies to the facts of this case. Respectfully following the ratio of the above noted decision, the stay application and appeal are allowed with consequential relief, if any.
(Pronounced and dictated in open Court)