OPEL ALLOYS PVT. LTD. Vs. CCE

JUDGEMENT

(1.) NONE for the appellant. Accordingly, we are disposing of the appeal after pursuing record. Heard the learned SDR.

(2.) THE service tax demand in the present case is in regard to commission earned by the appellant for "procuring orders and passing on the same to the principal for execution". The impugned order has stated that this activity is service of clearing and forwarding and thus confirmed service tax demand. We may read the operative portion of the order: I find that it has been admitted by the appellant that what they actually did, was to introduce two parties i.e. purchaser and seller of the goods and where their deal materialized, they got commission from the party. They have however, contended that this is not regular business and they are not appointed agents by any party i.e. purchaser or seller and hence the services provided by them are not covered under the category of C&F Agent as defined under Section 65 of the Finance Act, 1944. In the instant case the appellants are engaged directly or indirectly in executing the work viz. procuring of orders for supply of goods from other parties on behalf of their client. In the case law of M/s Prabhat Zarda Factory Ltd. v. CCE, Patna (145) ELT 122 (T), it has been clearly held that procuring orders and passing them on to the principal for execution in lieu of Commission is within the scope of service of clearing & forwarding Agent, even if goods are not directly dealt with. In the said case law it has also been held that "the taxable service has been defined as any service provided by 'clearing & Forwarding Agent' in relation to clearing and forwarding operations in any manner (emphasis provided). Therefore the plea put forth by the appellant as per their grounds of appeal that there was no physical movement of gods at their hands or at the end of the appellant or they were not directly involved in the warehousing/transportation of the goods etc. is not tenable and relevant to the case.

(3.) IN the present case, the appellant does not deal with the goods under transaction. It only books orders and receives a commission. While the impugned order has been passed by the Commissioner relying on the decision of this Tribunal in the case of M/s Prabhat Zarda Factory Ltd., it is seen that under a Larger Bench order of the Tribunal in the case of L&T v. CCE, Chennai as reported at 2006 (3) S.T.R. 321 (Tribunal - Larger Bench) it was held that decision in the Prabhat Zarda Factory case does not constitute correct law and dealing in goods by way of clearing and forwarding is essential to attract the tax liability. The impugned order is not sustainable in the face of the Larger Bench judgment. It is accordingly, set aside and appeal is allowed with consequential relief, if any, to the appellant.