LexM/S. COAL HANDLERS PVT. LTD. versus COMMISSIONER OF CENTRAL EXCISE RANGE KOLKATA - 1
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A B c [2015] 4 S.C.R. 860 M/S. COAL HANDLERS PVT. LTD. v. COMMISSIONER OF CENTRAL EXCISE RANGE KOLKATA-1 (Civil Appeal No. 7215 of 2004 etc.) MAY 5, 2015 [A.K. SIKRI AND R. F. NARIMAN, JJ.] Finance Act, 1994 - s. 65(25) - Services provided by appellants under Agency contract - Whether were liable to service tax in relation to 'Clearing and forwarding agency' - Held: clearing and forwarding operations would cover 0 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 - In the present cases, no such activities were performed by the appellant -Agent - Thus the services E rendered by the appellants would not qualify as 'Clearing and Forwarding Agent' within the meaning of s. 65(25) - The demand of service tax from the appellants is quashed. Words and Phrases - 'Forwarding agency' - Meaning F of, in the context of s.65(25) of Finance Act, 1994. Allowing the appeal Nos. 7215 of 2014 and 5159 of 2013 and dismissing the appeal No. 9967 of 2014, the Court. G HELD: 1. From the reading of the definition contained in s.65(25) of the Finance Act, 1994, together with its dictionary meanings contained in Legal and Commercial dictionaries, it becomes apparent that in H 860 COAL HANDLERS PVT. LTD. v. COMMISSIONER OF 861 CENTRAL EXCISE RANGE order to qualify as a C&F Agent, such a person is to A be found to be engaged in providing any service connected with 'clearing and forwarding operations'. Once it is found that such a person is providing the services which are connected with the clearing and forwarding operations, then whether such services are B provided directly or indirectly would be of no significance and such a person would be covered by the definition. [Para 11] [877-C-E] 2. Clearing and forwarding operations, would C 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. In the present cases, it would essentially include getting the coal cleared as D an agent on behalf of the principal from the supplier of the coal (which would mean collieries in the present case) and thereafter dispatching/ forwarding the said coal to different destinations as per the instructions of the principal. In the process, it may include· E warehousing of the goods so cleared, receiving dispatch orders from the principal, arranging dispatch of the goods as per the instructions of the principal by engaging transport on his own or through the F transporters of the principal, maintaining records of the receipt and dispatch of the goods and the stock available on the warehouses and preparing invoices on behalf of the principal. [Para 11] [877-F-H; 878-A·B] 3. On the facts of the present case, it is found that G none of the aforesaid activities are performed by the appellant. There is no role of the appellant in getting the coal cleared from the collieries/ supplier of the coal. Movement of the coal is under the contract of sale H 862 SUPREME COURT REPORTS [2015] 4 S.C.R. A between the coal company and the principal 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. Destination of the goods is known to B the coal company flnd the railway rakes are placed by the coal company for the said destinations. The destination is the factories of the principal itself, where the coal is to be delivered by the coal company as per pre-determined/agreed covenants between them. C Therefore, there is no occasion for 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 principal companies. The appellant does not even D undertake any loading operation. The primary job of the appellant, as per the contract between the appellant and the principal companies, is of supervising and liaisoning with the coal company as well as the E Railways to see that the material required by principal companies is loaded as per the schedule. At no stage, custody of the coal is taken by the appellant or transportation of the coal, as forwarders, is arranged by the appellant. Thus, the services rendered
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