C.C.E. Ghaziabad vs M/S International Electron Devices Ltd

[Arising out of Order-in-Appeal No. 55-CE/GZB/2009 dated 26.02.2009 passed by C.C.E. Meerut-I]

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy of the order?

4. Whether order is to be circulated to the Department Authorities?

C.C.E. Ghaziabad Appellant

Vs.

M/s International Electron Devices Ltd. Respondent

Appearance:

Present for the Appellant: Shri B.B. Sharma, DR

Present for the Respondent: None

Coram: Honble Mr. R.K. Singh, Member (Technical)

Honble Ms. Sulekha Beevi C.S., Member (Judicial)

Final Order No.52565/2015

Per: Sulekha Beevi C.S.

The appeal is filed by Revenue challenging the impugned order passed by Commissioner (Appeals) which set aside the levy of Service Tax on Clearing and Forwarding Agents services alleged to have be rendered by the appellants.

2. Brief facts are that the respondents entered into an agreement with Lucky Exports, a partnership firm engaged in Merchant exports. As per the agreement, respondents were appointed as agents to assist procuring at best possible price and identifying vendors for medical equipment products. The respondents received commission for these activities. A show cause notice was issued alleging that these services would fall within the definition of Market Research Agency, Clearing and Forwarding Agency, Company Secretary, Engineering Consultancy Service, Management Consultant, or Scientific, Technical Consultancy. The notice finalized in the Order-in-Original which confirmed service tax demand and penalty classifying the services under the category of Clearing and Forwarding Agent Services. In appeal the Commissioner (Appeals) set aside the same observing that the appellants have not performed any activities of C&F agents. Aggrieved the Revenue is before us.

3. The learned DR vehemently argued that the services would fall within the ambit of C & F agents. He drew our attention to the agreement and urged that activities of the respondents included procurement of the goods and execution of order which are activities coming under C & F agents service.

4. Against this, the submissions on the side of respondents is that their activities would fall under Business Auxiliary Service which was not taxable during the relevant period. They also contended that from the show cause notice it is not clear under which category exactly they are sought to be taxed, as several categories are mentioned in the show cause notice. That their activities as an agent would not fall under any of these alleged services.

5. We have perused the records and considered the submissions made by both sides. The basic issue is whether during the period 2001-02 the activities for which the respondents received Commission would fall within the category of C & F agents service. On going through the agreement entered between respondents and Lucky Exports it is seen that respondents were appointed as agents exclusively for assisting in procuring the specified products at most attractive prices, by identifying suitable vendors. In consideration of such services, a commission at the rate of 8% of the purchase amount was agreed between them. The description of activities in this agreement clearly falls within the definition of BAS. But BAS services provided by Commission agents were outside the purview of levy of service tax till 8.7.2009. Further, in the Cross Objection filed by the respondents it is brought out that the demand is bared by limitation. The show cause notice was issued on 23.3.2007 for the periods 1999-2000 to 2001-2002. The Commissioner (Appeals) has therefore rightly set aside the demand raised in the Order-in-Original. We do not find any material that calls for interference in the impugned order.

6. From the foregoing, the appeal filed by Revenue is dismissed. The Cross Objection are also dismissed.

(Dictated and Pronounced in open Court)

(R.K. SINGH)

MEMBER (TECHNICAL)

(Sulekha Beevi C.S.)

Member (Judicial)

K. Gupta

4