ORDER
S.L. Peeran, Member (J)
1. Revenue is aggrieved with Order-in-Appeal No. 74/2005 (ST) dated 29.7.2005 by which the Commissioner (A) has set aside the Order-in-Original No. 14/2005 dated 28.1.2005 passed by the Assistant Commissioner of Service Tax holding the assesses to be carrying on the services of Clearing and Forwarding. Agency to M/s. Bechem OKS Lubricants (India) Ltd., Mysore during the period 1.9.1999 to 31.3.2002. The assessee’s contention was that they were appointed as an “Indenting Agents” for marketing their products but as per the provisions of the agreement entered between them, the assessee has to procure orders from the customers and to pass on the same to the BOI and ensure payments for the products supplied by BOI to customers, for which they were paid commission on 30% of net sale value of BOI. They contended that their services were in the nature of “Del Credere” Agent. The Commissioner after detailed consideration accepted their plea in the light of the several judgments of the Tribunal. The finding recording by him is reproduced herein below.
I have gone through the records of the case including the submissions made in the appeal memorandum as also oral submissions made at the time of personal hearing.
I find that the appellant has been appointed as ‘Indenting Agent’ by M/s. BOI, vide indenting agent agreement dated 4th Feb. 1999. As per the said agreement the appellant has to procure orders for the products manufactured by M/s. BOI, the principal and are responsible for the non-payment of any sales consideration by customers arising out of the sale of the products to them, for which they are paid commission of 30% on net sale value. That is, they are authorized to sell the goods belonging to the principal. Other than this the appellant has no other responsibility. It may be seen that the appellant neither receives goods nor handles them. The goods are directly supplied by M/s. BOI to the customers whose orders are procured by the appellant The facts and circumstances of the present case are similar to that of the case of Mahavir Genetics v. The Commissioner of Central Excise, Bangalore reported at , where the Honourable CESTAT held that “the appellants are neither clearing any goods not forwarding any goods. Products of the principal are supplied to the appellant on consignment basis and the appellant sells the products to the customers. Such an activity would not come within the services provided to a client by clearing and forwarding agent in relation to clearing and forwarding operation Further in the case of Raja Rajeswari International Polymers (P) Ltd. v. CCE, Bangalore , the Hon’ble CESTAT, Bangalore held that Del Credere Agency does not come within the purview of clearing and forwarding operations. In the present case the appellant is a Del Credere agent who as per the agreement has to indemnify M/s. BOI against all costs, expenses or losses arising out of the non-receipt of any sales consideration from customers pursuant to the agreement.
By following the ratio of above two judgments, I am inclined to accept the contentions of the appellant and accordingly I aglow the appeal filed by M/s. OKS Specialities Lubricants (India) Pvt. Ltd. and set aside the OIO No. 14/(D-II)/2004-05 dated 28.01.2005 passed by the Assistant Commissioner of Central Excise, Service Tax Division-II, Bangalore.
Revenue is aggrieved with this findings.
2. We have heard both sides and perused the grounds of appeal and considered the same. The learned Counsel relied on Larger Bench judgment rendered in the case of Larsen & Toubro Ltd. v. CCE, Chennai 2006 (3) STR 321 (Tri.-LB) which has clearly upheld the assessee’s plea that the activity carried out by them cannot be brought under the heading of Clearing & Forwarding Agent, as they were merely booking orders and receiving the commission and the activity was in the nature of principal and agent, and not as Clearing and Forwarding Agent. We have considered the submissions and perused the impugned order as well as the Larger Bench judgment.
3. We find that the assessee was not carrying on the activity of Clearing and Forwarding Agent as defined under the Finance Act. They were not handling the goods at all and they were only engaged in booking the orders for which they were getting the commission. Therefore, the Commissioner (A) has rightly analyzed the matter and correctly followed the ratio of the judgment cited by him, which is extracted supra. The rulings cited by the Commissioner are now supported by the Larger Bench judgment cited by the learned Counsel. Hence, there is no merit in this appeal and the same is rejected.
(Pronounced and dictated in open Court)