COMMISSIONER OF C. EX., VADODARA Vs. PAREKH APPARELS

JUDGEMENT

(1.) THE issue involved in the present appeal of the revenue is as to whether the respondent M/s. Parekh Apparels, the Wills Life Style Store can be considered as Clearing and Forwarding Agent so as to be liable to payment of Service tax. Commissioner (Appeals), by accepting the respondents pleas and after going through the agreement between them and M/s. ITC Ltd. has held that they cannot be called as C and F agent. The respondents have raised the following grounds before the Commissioner (Appeals) :

(2.) THE appellate authority has considered the terms of agreement between the appellant and M/s. ITC Ltd. and has noticed following the relevant clauses :

(3.) ACCORDINGLY , he has observed as under : The agreement with specific reference to the clauses quoted above would show that the appellants neither receiving dispatch orders from the principal nor arranging dispatch of goods as per the direction of the principal by engaging transport on his own nor preparing invoices on behalf of the principal. In this case, admittedly, the appellants are providing storage facilities to the principal. However, the Board vide Circular No. 37B Order No. 2/1/2002 -S.T. dated 24 -4 -2002 wherein it has been clarified that merely allowing storage facilities does not amount to services of a clearing and forwarding agents. Thus, activities carried out by the appellants does not fall within the ambit of services of clearing and forwarding agents and as detailed of the activities mentioned in Mumbai Commissionerate Trade Notice. Unless their services can be treated as one to a client by clearing and forwarding agent in relation to clearing and forwarding operation in any manner the services cannot be taxed. As such, by relying on the decision of the Tribunal in the case of Mahavir Generics reported in 2006 (3) S.T.R. 276 (Tribunal) = 2004 (170) E.L.T. 78 (Tri -Del), he has held that products of principal supplied to appellant on consignment basis and sold by the appellant to customers, the activity cannot come within services provided to client by Clearing and Forwarding agent. The said order of the Commissioner (Appeals) is appealed before the Tribunal.