Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  GST registration cancellation without reasons amounts to ‘Economic Death’ of business: Supreme Court. *  No GST refund if appeal before GSTAT is filed late: Gujarat High Court. *  Mere upload of GST notice on portal not valid service, appeal limitation won’t start: Punjab & Haryana High Court. *  Taxpayer can’t be penalised for missing notices hidden under ‘Additional Notices/Orders’: Calcutta High Court allows fresh adjudication. *  State tax officer can’t issue GST SCN beyond CBIC-assigned jurisdiction: Bombay High Court stays recovery proceedings. *  Earlier 7.5% Pre-Deposit must count towards mandatory 10% for Appeal: Uttarakhand high court quashes CESTAT Order. *  Third Parties can’t challenge GST Advance Rulings merely due to financial impact: Karnataka HC *  GST SCN generated using AI tool quashed: Punjab & Haryana High Court *  Bank Attachment Quashed as Madras HC Quashes GST Order Issued Against Deceased Person *  ITC Blocking Order for Failure to Record ‘Reason to Believe’ U/R 86A Quashed: Allahabad High Court *  Govt Extends GSTAT Appeal Filing Deadline From 30 June to July 31, 2026 *  GST Demand on RWA Stayed: Allahabad High Court Questions Taxability of Electricity Distribution to Flat Owners *  CBIC Clarifies Jurisdiction After GST Registration Transfer: Earlier Proceedings Remain Valid, New Officer to Continue Action *  GST authorities’ certification not mandatory for reimbursement, but tax payment must be proven: Karnataka HC *  Contractor can’t seek gst reimbursement through writ when contract has arbitration clause: Karnataka HC *  Unsigned Order Is No Order in Law: AP HC Quashes GST Assessment Order for Want of Officer’s Signature *  Customs Can’t Levy Rs. 1.36 Crore Cost Recovery Charges Without Proof of Full-Day Officer Deployment: CESTAT  *  12% IGST Payable On Imported Dialysis Machine Parts: CESTAT *  Bombay High Court Admits Challenge to GST Limitation Extension Notifications; Grants Protection Against Coercive Recovery *  Criminal Case Can’t Run Parallel to GST Proceedings on Same Facts: Allahabad High Court *  Allahabad High Court Stays GST Detention Order; Directs Release of Vehicle and Goods on Deposit of Rs. 1.44 Lakh *  Service Tax Can’t Be Levied on Loss-Making Contracts: Gujarat High Court *  GSTN Mandates Ship-to GSTIN in e-Invoice and e-Way Bill APIs; Introduces Voluntary e-Way Bill Closure Facility from August 1, 2026 *  GST Appeal Can’t Be Rejected as Time-Barred When Taxpayer Was Pursuing Rectification Remedy: Telangana High Court *  Absence of E-Way Bill and Transport Documents Justifies Customs Seizure U/s 110: Gauhati HC *  Madras High Court Upholds GST Late Fee and Penalty for Non-Filing of Annual Return, Dismisses Challenge  *  GST Records, Purchase Documents Sufficient to Discharge Burden Under Customs Act: CESTAT Orders Release of 3.65 Kg Gold  *  No Sugar Cess Payable on Sugar Exported Out of India: CESTAT *  Road Construction Services Exempt and SCN Time-Barred: CESTAT Quashes Service Tax Demand Based Solely on Form 26AS  *  ITC Freeze Upheld After GST Dept Find Suppliers Were Allegedly Fake Bill-Trading Entities: Madras HC 
Subject News *  Input service benefits can’t be denied: CESTAT allows export refund despite MMTC acting as Canalising agency. *  No service tax demand without proof of service of SCN: CESTAT. *  Service tax demand quashed as dept. fails to prove service of SCN: CESTAT *  GST : Mere allegation of inadequate consideration of reply not enough to invoke writ jurisdiction: Delhi High Court *  Onerous conditions imposed for provisional release of seized imported goods shouldn’t amount to virtual denial of relief: CESTAT. *  GST SCN without alleging fraud cannot invoke sec. 74: Karnataka High Court quashes adjudication order. *  Extended Limitation Can’t Be Invoked Merely on Form 26AS Data: CESTAT *  Revenue-Sharing with Restaurants Not Taxable as Business Support Service: CESTAT *  R. 6(3) Option Can’t Be Forced on Taxpayer; CESTAT Quashes Rs. 12.36 Crore CENVAT Credit Demand *  Excise Duty | Power Consumption Alone Can’t Prove Clandestine Manufacture: Karnataka High Court *  Madras High Court Examines DGGI’s Authority to Issue GST Penalty Orders Under Section 122, Adds DGGI as Party *  Proceedings under omitted r. 96(10) can’t survive without saving clause: andhra pradesh high court quashes gst refund recovery *  Excise duty power consumption alone can’t prove clandestine manufacture: karnataka high court *  Madras high court rules GST show cause notices must disclose grounds for invoking extended limitation *  Court Can’t Direct Extension GST Return Deadlines or Waive Interest and Penalties: Karnataka High Court *  GST Notifications Can’t Go Beyond GST Council Recommendations: Madras High Court Quashes SCN on Branded Pulses *  Appeal Can’t Be Dismissed for Delay When Dept’s Own Order Mis-states Limitation Period: CESTAT *  No Evidence of KYC or Due Diligence Breach By Customs Broker: CESTAT Quashes Licence Revocation in Export Overvaluation Case *  Glucometers Are Chemical Analysis Instruments Classifiable Under Tariff Heading 9027: CESTAT *  Validity of Post-GST Service Tax Proceedings Upheld: Gujarat High Court Dismisses Challenge to S. 73 SCN *  Rectified GST Refund Applications Can’t Be Rejected as Time-Barred If Original Refund Claim Was Filed Within Limitation: Gujarat HC *  Service Tax Refund Can’t Be Denied as Time-Barred When Levy Itself Is Unconstitutional: Gujarat High Court *  Same Officer Can’t Act As Auditor & Adjudicator: Karnataka High Court *  Karnataka High Court Condones 324-Day Delay, Revives Customs Appeal in Jewellery Pilferage Case  *  Madras High Court Quashes GST Assessment Order Passed Ex Parte Despite Prior ITC Reversal; Lifts Bank Attachment *  Tobacco Process Doesn’t Amount to Manufacturing: Madras High Court Quashes Rs. 1.32 Crore Compensation Cess Demand  *  Recovery Notice Unsustainable After Voluntary Reversal of Unutilised Credit: CESTAT  *  GST | ‘System Generated’ SCN Without Officer Details Invalid: Allahabad HC  *  Electronic Records Without Statutory Certification Requirements Can’t Justify Undervaluation Allegations: CESTAT *  Madras High Court Stays GST Order, Finds Prima Facie Merit in Plea Against S. 74 Proceedings Based on S. 73 Intimation  

Comments

Print   |    |  Comment

PJ/Case Laws/2012-13/1055

Supply & Arrangement for transportation of Coal-whether C&F Agent Service or BAS service?

Case: M/s KAVERI COAL SUPPLIERS Vs CCE, KANPUR
 
Citation: 2011-TIOL-1593-CESTAT-DEL
 
Issue:- Whether supply and arranging for transportation of coal covered under Clearing & Forwarding Agent Service?
 
Appellant registered under BAS since 2004 – Whether for prior period i.e. 2000 to 2004, the service can be said to be falling under C&F Agent Service for demanding service tax?
 
Brief Facts:- Appellants were providing services of coal merchants and are registered under Business Auxiliary Service since 2004. They are engaged in financing to prepare pre-paid R/R and were paying freight in advance on behalf of their customers at Ferozabad and were making payment to principal coal agent on behalf of coal buyers.
 
Department contended that the said service was classifiable under the category of "Clearing & Forwarding Agent" service. That the service of Clearing & Forwarding Agent was taxable w.e.f. 16.7.1997, and that the appellants had provided such services to their clients during the period 2000-01 to 2003-04 as per balance sheet and the same was liable to service tax under the category of Clearing & Forwarding Agent. On pointing out, the appellants had deposited the service tax under protest.
 
Therefore, show cause notices were issued proposing the confirmation of demand and appropriation of amount deposited by the appellants and imposition of penalty u/s 75A, 76, 77 & 78 of the Finance Act, 1994. The Show cause notices were adjudicated and demands along with penalty were confirmed against the appellants. Aggrieved from the said orders, the appellants are before the Tribunal.
 
Appellant’s Contention:- Appellants submits that they are engaged in the activity of making payment of price of coal for various persons and arrange transportation of the same by paying the freight and arranging insurance, & R/R etc. is not covered the services of Clearing & Forwarding Agent as the appellants are receiving commission from their clients, to whom they were providing finance.
 
It was further, submitted that on similar facts in the case of Hanuman Coal Co. vs. CCE, Kanpur [2011-TIOL-547-CESTAT-DEL this Tribunal has held that Revenue cannot contend that prior to registration under "Business Auxiliary Services", they were providing "Clearing & Forwarding Agent" services and also held that show cause notice is barred by limitation.
 
Respondent’s Contention:- Revenue submits that the appellants are providing services to their clients by handling coal and arranging transportation on the instruction of their clients. Therefore, the appellants are covered under the category of Clearing & Forwarding Agent and demands are rightly confirmed against them. They also relied upon the following case law.
 
- Coal Handlers (P) Ltd. vs. CCE, reported in 2005 (190) ELT A175 (SC)
- CCE, Bangalore vs. Mahavir Generic, reported in 2010 (17) STR 225 (Kerala)
 
Revenue further submitted that as the appeal of Coal Handlers (P) Ltd. is pending before the Apex Court the matter may be adjourned till final disposal of the same by the Apex Court.
 
Reasoning of Judgment:- The Tribunal noted that appellants are engaged in financing their clients for purchase of coal and also for arranging transportation of coal. The Tribunal perused the definition of Clearing & Forwarding Agent given in the Finance Act.  It was held that the case law relied upon by Revenue are not relevant to the facts of this case as in the case of Coal Handlers (P) Ltd. services undertaken are the persons providing service on behalf of client prior to holding of coal i.e. obtaining consent of coal companies to load the coal makes, sanction from railway authorities, supervising) of loading of wagons, sending samples and assuring proper quality and quantity, arranging freight payment etc. which were held to be covered under the definition of Clearing & Forwarding Agent. In the cases before us, the appellants are only financing the purchase of coal. In the case of Mahavir Generics also the facts are different from the facts of the cases in hand. In fact, in that case also the High Court has observed that the appellant had authority to appoint dealers, stockists and agents on behalf of the principal. In that case it was services were not merely that of commission agent. But the Appellant had the responsibility to carry out activity of getting the goods stored by clearing it and then forwarding it to the stockist and dealers, if any, appointed by the Appellant himself as directed by the principal. These are not the facts in these cases. In fact, in these cases the main activity of the appellants is to arrange finance for payment of coal on behalf of their client.
 
Further, the Tribunal found that in the case of Hanuman Coal Co. this Tribunal on similar set of facts has held that the activity of making payment for price of coal bought by various persons and arranging transportation of the same by paying freight and arranging Railway Receipt etc. is not covered under the category of services rendered by Clearing & Forwarding Agent. Moreover, in that case for the period prior to their registration under the category of "Business Auxiliary Services" the Revenue felt that the services undertaken by them were falling under the Clearing & Forwarding Agent Services for which show cause notices were issued on 12.7.2005 proposing confirmation of demand and imposition of penalty after relying upon the decision of the Larger Bench of this Tribunal in the case of Larsen & Toubro Ltd., reported in 2006 (3) STR 321 (Tri.-LB). In that case the Larger Bench has held that expression "directly or indirectly" and “in any manner” occurring in the definition of "clearing and forwarding agent" cannot be isolated from the activity of clearing and forwarding operations. Thereafter, there are a number of decisions of the Tribunal which hold that such type of services would not be covered by service of Clearing & Forwarding Agent. This Tribunal has, further, observed that the appellants are now registered under "Business Auxiliary services" and in such a situation the Revenue cannot contend that prior to such registration they were providing services of Clearing & Forwarding Agents. The Tribunal set aside the order confirming demands under the category of "Clearing & Forwarding Agent".
 
The following decisions are relied upon:
 
- Mercedes Benz India (P) Ltd. vs. UOI, reported in 2010 (252) ELT 168 (Bombay)
 
- Mahadeolal Kanodia v. The Administrator General of West Bengal, AIR 1960 SC 936 (at p.941)
 
-Vivilon Textile Industries vs. CCE, Raigarh
 
- Sant Lal Gupta & ors
 
Considering the fact, that coordinate Bench of this Tribunal in the case of Hanuman Coal Company has also arrived at a decision and since are also of the view that the decision taken by the coordinate bench of this Tribunal is a correct view. Hence, the request for adjournment of the respondent is rejected.
 
It was held that the issue has already been settled in favour of the assessee by holding that the activity undertaken by the appellants in these cases is rightly covered under the category of "Clearing & Forwarding Agent". Impugned order set aside.
 
Decision:- Appeal allowed.
 
Comment:- Whenever an assessee takes the registration and pays the service tax, then the department plead that they are covered under other service and the tax is payable under that category. We have also faced many litigation on this score. This is being done as the service tax will be payable under other category from prior date.
 
However, this litigation will come to an end as the all services are taxable except the negative list. The classification disputes of service will not be seen henceforth.

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com