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Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

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PJ/Case Law/2013-14/1950

Whether activity of providing mere storage and facilitating delivery of the products leviable to service tax under Clearing & Forwarding service?

PJ/Case Law/2013-14/1950
 
Case:- MODERN AUTOMOBILES VERSUSCOMMISSIONER OF C. EX., PANCHKULA
 
Citation:-2013 (31) S.T.R. 161 (Tri. - Del.)
 
Brief facts:-  The facts of the case is that in the past order Revenue by entertaining the view that appellant has acted as clearing and forwarding agent for M/s. Maruti Udyog Ltd. raised a demand against them by way of show cause notice. The said show cause notice was dropped by the original adjudicating authority on the ground that by temporarily storing the vehicles cleared by M/s. Maruti Udyog Ltd. for DGS & D, they are not providing the services of clearing and forwarding agent. The vehicles supplied under the DGS & D rate contract are directly sold by M/s. Maruti Udyog Ltd. from their working factory gate under their own invoice and freight transit insurance policy are paid by the buyers to M/s. Maruti Udyog Ltd. who are arranging the deliv­ery of the vehicles from the premises of their various dealers located nearest to the consignee location. The mark up amount given to the dealer is for providing three free services as per directions and conditions of the rate contract and the dealer cannot be held to be clearing and forwarding agent in as much as he is not arranging for despatch, distributing or forwarding of the Maruti Vehicles from his premises to the ultimate buyers situated at different places. He is also not be­ing paid any amount in the form of commission towards clearing and forward­ing vehicles. As such, by referring to various decisions of the Tribunal, he dropped the demand. On appeal of the Revenue, Commissioner (Appeals) allowed the Revenue's appeal and set aside the impugned order of the original adjudicating authority. Hence, the present appeal.
 
Appellant’s Contentions:-The authorised representative for the appellant pleaded that the appellant are merely acting as a delivery point for M/s. DGS&D to take up the vehicles sold by M/s. Maruti Udyog Ltd. and are not being paid any commission on that count. As such, theappellant cannot be held to be clearing and forwarding agent for M/s. Ma­ruti Udyog Ltd.
 
Respondent’s Contentions:-The respondent reiterated the findings of the Commissioner Appeals and prayed for upholding the order in appeal.
 
Reasoning of Judgment:-After hearing both sides, we find that demand of duty of Rs. 95,672/- stand confirmed against the appellant by the impugned order of Commissioner (Appeals) vide which he has allowed the Revenue's appeal by setting aside the order of the original adjudicating authority vide which he had vacated the show cause notice. We have gone through the impugned order of Commissioner (App­eals). There is no dispute about the activities of the appellant. He is not raising any invoice on account of M/s. Maruti Udyog Ltd. and is acting only as a tempo­rary transit point for the vehicles directly sold by M/s. Maruti Udyog Ltd. to DGS & D under the cover of their invoice. The dealer is only acting as a delivery point for M/s. DGS&D to take up the vehicles sold by M/s. Maruti Udyog Ltd. and is not being paid any commission on that count. As such, we are of the view that appellant cannot be held to be clearing and forwarding agent for M/s. Ma­ruti Udyog Ltd. The above conclusion finds support from the decision of the Hon'ble Punjab & Haryana High Court in the case of CCE, Panchkula v. Kulcip Medicines P. Ltd. [2009 (14) S.T.R. 608 (P&H)] as confirmed by Hon'ble Supreme Court vide their order dated 17-12-2009 [2012 (25) S.T.R. J127 (S.C.)]. After hearing both sides, we find that the appellant is a authorized service station of Maruti Udyog Ltd. M/s. Maruti Udyog Ltd. entered into a con­tract with DGS & D for supply of vehicles to the said organization. The vehicles are cleared by M/s. Maruti Udyog Ltd. under the cover of invoices issued in the name of DGS & D at the rates entered into between the two. However, the said vehicles sold by M/s. Maruti Udyog Ltd. directly to DGS & D are dispatched by them to the dealers under the instruction to DGS & D for taking delivery directly from the dealer's premises. As such, we are of the view that impugned order is not correct and the order of the original adjudicating authority dropping the demand against the appellant is required to be upheld. We, accordingly, set aside the impugned order and restore the order of the adjudicating authority.
 
 
Decision:-Appeal allowed.
 
Comment:-The analogy drawn from this case is that every activity of storage and delivery cannot be leviable to service tax under the category of Clearing & Forwarding Agency Service. To levy service tax under this category, it is essential that goods are stored and cleared under the invoice of the person facilitating clearance of goods and that too on the instructions of the manufacturer. 

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