1. The fact of the case is that the appellant entered into contract with M/s. Grasim Industries Ltd. (GIL) to act as an agent of GII and lift of beneficiated coal from the washery of M/s. BLA Industries Pvt. Ltd. (BLA) and transport the same to GIL's Birlagram Plant in Nagda, M.P. As per the terms of the contract, the appellant were also responsible to ensure that the coal lifted and transported was quality specified in the contract and the payment terms were to some extent linked with the quality of the coal supplied. Also the supplier BLA was to raise invoices on GIL. However, the payments of the same were to be made by the appellant and they were required to collect these bills from BLA and raise their own bills from quantity of coal supplied, on a weekly basis. Accordingly, the appellants, on the premise that the service rendered by them is primarily a transportation service charged Service Tax in the invoice under the category of Goods Transport Agency Services after availing the benefit of abatement of 75% in terms of Notification No. 32/2004-ST dated 03.12.2004. The case of the Department is that the service provider by the appellant is not classifiable under GTA services but correctly classifiable under Clearing and Forwarding Agency Services. Accordingly, the demand was raised of Service Tax of Rs. 1,57,998/- for the period 2010-11. The adjudication order confirmed the demand and imposed penalty along with interest. The learned Commissioner (Appeals) in an appeal filed by the appellant upheld the Order-in-Original and rejected the appeal, therefore the appellant are before us.
2. Shri Jay Chheda, learned Chartered Accountant appearing on behalf of the appellant submits that in their own case on the identical issue for the period 2005-06 to 2009-10, this Tribunal vide Order No. A/89380/17/STB dated 06.09.2017 held that the same services is of GTA and not Clearing and Forwarding Agency Services, accordingly the demand was dropped. He placed reliance on the following judgment:-
(i) Coal Handlers Pvt. Ltd. Vs. CCE, Kolkata-I : 2004 (171) ELT 191 (Tri.-Kolkata)
(ii) Coal Handlers Pvt. Ltd. Vs. CCE, Range Kolkata-I : 2015 (38) STR 897 (S.C.)
(iii) V.S. Distributors Vs. CCE, Jaipur : 2010 (17) ELT 530 (Tri.-Del.)
(iv) Larsen & Toubro Ltd. Vs. CCE, Chennai 2006 (3) STR 321 (Tri.-LB)
3. Shri V.R. Reddy, learned Assistant Commissioner (A.R.) appearing on behalf of the Revenue reiterates the finding of the impugned order.
4. On careful consideration of the submissions made by both sides and perusal of the records, we find that on identical issue of the appellant itself, this Tribunal has already passed an Order No. A/89380/17/STB dated 06.09.2017. The entire facts and the contract is same in that case. In the present case, only difference is of the period, in the earlier Tribunal's order period was 2005-06 to 2009-10 and in the present case period is 2010-11. We have not come across any change of circumstances or in the law related to the present issue. In the earlier order dated 06.09.2017 Tribunal has passed the following order:-
5. The case of Revenue for re-classification lies in the breadth of responsibility assigned to the appellant in the agreements. It is contended that the appellant is not a mere transporter of goods but also supervises, on behalf of M/s. Grasim Industries Ltd., the loading of coal with intent to ensure that the specified quality parameters are not breached. According to Revenue, the risk and responsibility assigned to appellant is akin to that undertaken by clearing and forwarding agent and will conform to trade usage of that professional description. This averment relies upon the responsibility of the appellant to load the coal and carry it according to the instructions of the client, M/s. Grasim Industries Ltd., to their factory and the definition of the service in section 65(105)(j) of Finance Act, 1994 which is to any person, by a clearing and forwarding agent in relation to clearing and forwarding operations, in any manner with that of the provider in section 65(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 in Finance Act, 1994.
6. Though the definitions supra do not lend themselves to easy identification of the activity, the usage of the description in trade parlance to identify intermediaries in commercial activities has been resorted to in a plethora of decisions that govern taxation of services. The most prominent of these is the decision of the Hon'ble Supreme Court in Coal Handlers Pvt. Ltd. v. Commissioner of Central Excise, Kolkata-I : 2015-TIOL-101-SC-ST]. In a somewhat similar set of circumstances as narrated in the decision, M/s. Coal Handlers Pvt. Ltd. was
2 ..required to undertake the following activities on behalf of the Principal 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;
(v) dispatching of rail receipts to Ambuja companies and cited with approval the decision of the Larger Bench of the Tribunal in Larsen & Toubro Ltd. v. Commissioner of Central Excise, Chennai [2006 (3) STR 321 (Tri-LB)] which, though deciding upon the coverage of commission agent within the scope of taxability as clearing and forwarding agent, enlarged upon that the normal activities of a clearing and forwarding agent thus
(i) receiving the goods from the factories or premises of the principal or his agents;
(ii) warehousing these goods;
(iii) receiving dispatch orders from the principal; (iv) arranging dispatch of goods as per the directions of the principal by engaging transport on his own or through the authorized transporters of the principal;
(iv) maintaining records of the receipt and dispatch of goods and the stock available in the warehouse; and
(v) preparing invoices on behalf of the principal and enunciated that
10 In cases where the buyer is under an obligation to take delivery of the goods from the vendor's premises, there would not be any need on the part of the vendor to engage any forwarding agent, nor can a person engaged for the purpose of clearing and forwarding operations, insist on procuring orders for the principal in the absence of any stipulation to that effect.
7. Citing its approval of the decision of the Tribunal, the Hon'ble Supreme Court in re Coal Handlers Pvt. Ltd. observed that
9. Significantly, the Revenue accepted the aforesaid decision in the case of Larsen & Toubro (supra) and did not file any appeal there against. Even otherwise, we find that the larger Bench of the Tribunal in the said case has rightly interpreted the definition of clearing and forwarding agent contained in Section 65(25) of the Act.
11 .. As is clear from the plain meaning of the aforesaid expression, it would cover those activities which pertain to clearing of the goods and thereafter forwarding those goods to a particular destination, at the instance and on the directions of the principal.
12. Movement of the coal is under the contract of sale between the coal company and the Ambuja companies. Even the coal is loaded on to the railway wagons by the coal company. The goods are not under any legal detention from which they need to be freed by the appellant. Not only this, destination of the goods is known to the coal company and the railway rakes are placed by the coal company for the said destinations. The destination is the factories of the principal itself, namely, Ambuja companies, where the coal is to be delivered by the coal company as per pre-determined agreed covenants between them. Therefore, there is no occasion for the Ambuja companies to instruct the appellant to dispatch/forward the goods to a particular destination which is already fixed as per the contract between the coal company and the Ambuja companies.
All that is required is the substitution of Ambuja companies by Grasim Industries Ltd., rail to be substituted by road and modify the persona of the loader from the coal company to the appellant and we could well be narrating the facts of the dispute before us. Conscious as we are that the dispute before the Hon'ble Supreme Court was the attempt by Revenue to fasten the tax liability as provider of clearing and forwarding agent service on a purchase agent operating on commission basis with the appellant relieved of any liability to tax and that the present dispute is one of transforming the taxable service from that of goods transport agency service to that of clearing and forwarding agents service, we place reliance on the judgment for the exposition on the characteristics to determine the latter.
8. Thus, we are able to conclude that clearing and forwarding agent service is one where a manufacturer or its representative engages such an entity to handle the place utility function in a commercial chain with the goods delivered to customers on instruction of that principal. Such a function can hardly be re-designed to describe the very reverse for delivery of procurements required by the principal.
9. It would appear that the tax authority in its anxiety to deny the abatement that is the entitlement of provider of goods transport agency service sought to bring the activity under an omnibus head that being bereft of a specific definition could be resorted to for that purpose, failed to identify the various services that were elements of this composite contract. Some of those could possibly have been taxable services. Nevertheless, section 65A of Finance Act, 1994 lays down the principles that should guide classification of composite services. It would appear that transportation is the most prominent of these and the classification that was declared by the appellant cannot be faulted for its legality. More so, as the impugned order has failed to consider such an option. Nay, even the show cause notice is regrettably bereft of such a scrutiny. The activity of the appellant is not classifiable as clearing and forwarding agents service and the demand on that head must fail.
10. It now remains to examine the claim of the appellant that, with the difference in tax liability as well as interest having been discharged in full, the proceedings for the other demand of ` 94,75,010 must also fail. We find an inconsistency between the claim and the narration in the impugned order which has found only a portion of the demand to have been remitted. The appellant has also not made any submission on this matter. It would, therefore, be inappropriate to consider the cl
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aim of the appellant without this essential fact. That is a matter that must be decided upon by the original authority. If the entire tax and interest had been paid before the issue of notice, the claim of the appellant that notice should not have been issued cannot be denied. The differential tax pertains to the bonus that is awarded to the appellant for efficiency in catering to the requirements of the client and is paid over and above the contracted amount. Doubts in the mind of the appellant about its includability in the assessable value of the service cannot be discounted. 11. Accordingly, we hold that the service is taxable as goods transport agency service and set aside the demand arising from re-classification of the service. We remand the remaining portion of the impugned order to the original authority to determine whether section 73(3) is applicable in view of our observations supra. From the above order, it can be seen that the issue involved in the said order is identical to the fact of the present case. Accordingly, we following the ratio of the aforesaid Division Bench Order of this Tribunal set aside the impugned order. The appeal is allowed. (Pronounced in Court on 18.01.2018)