LexM/S. SUPER POLY FABRIKS LTD. versus COMMISSIONER OF CENTRAL EXCISE, PUNJAB
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(2008] 6 S.C.R. 1076 A M/S. SUPER POLY FABRIKS LTD. Ii- • v. COMMISSIONER OF CENTRAL EXCISE, PUNJAB (Civil Appeal No. 1713 of 2007) B APRIL 24, 2008 [S.B. SINHA AND V.S. SIRPURKAR, JJ.] t Finance Act, 1994 - s. 65 (19) and (25) - Service tax - Liability to pay - Assessee entering into 'Consignment c Stockistship Agreement' with a company- Demand of service tax - Assessee denying the liability on the ground that it was not rendering any service as a clearing and forwarding agent - Authorities/courts below holding the assessee liable - On appeal, held: The fact as to whether the assessee in effect 0 and substance was a clearing and forwarding agent, can be ascertained from the terms of the agreement - In the instant case, the same having not been decided, matter remitted to assessing authority for determination of the same - Finance Rules, 1994 - r. 7. E Appellants-assessee entered into an agreement 'Consignment Stockistship Agreement' with Gas Authority of India Ltd. Respondent-Revenue issued Show Cause Notice to the appellant-assessee asking it to pay 'service tax'. Showing the cause, the assessee stated that it was F not providing any service as a clearing and forwarding agent of GAIL. Revenue directed payment of service tax. ,.. \ The order was unsuccessfully challenged before the appellate authority as well as before Central Excise and Sales Tax Appellate Tribunal. Hence the present appeal. G Appellant contended that it was not liable to pay the tax as its activities did not extend to the job of a clearing and forwarding agent as it merely accepted offers on behalf of its principal. ~· H 1076 1 M/S. SUPER POLY FABRIKS LTD. v. COMMISSIONER 1017 · OF CENTRAL EXCISE, PUNJAB Respondent-Revenue contended that if the A agreement is read as a whole, the appellant, apart from · receiving orders on behalf of its principal, also used to get the insurance cover for the goods and sale of the goods which would come within the perview of clearing . and forwarding activities; and that such activities being s not incidental to the main purpose, the assessee is rightly held Hable to pay the tax. Partly allowing the appeal, the c·ourt HELD: 1. There cannot be any doubt whatsoever that c a document has to be read as a whole. The purport and object with which the· parties thereto entered. into a . contract ought to be ascertained only from the terms and conditions thereof. Neither the nomenclature of the document nor any particular activity undertaken by the 0 parties to the contract would be decisive. For the purpose of ascertaining as to whether the appellant in effect and substance was a clearing and forwarding agent or it was merely accepting orders for and on behalf of GAIL; the same must be ascertained from the terms of the agreement itself: [Paras 8 and 11} [1081-B; G] E V Lakshinanan Ii. B. R. Mangalagiri and Ors. 1995 Supp.(2) SCC 33; Assam Small Scale. Ind. Dev. Corp. ·Ltd. · .. and Ors. v. J.D. Pharmaceuticals. and Anr. 2005 (8) SCALE · 298 .- relied on. · '1 2. The agreement is titled as "Consignment Stockistship Agreement". Appellant has various jobs to j:>erfoqn thereunder. It is necessary to determine the . question as to whether the purported job of the appellant F as a clearing and forwarding agent was incidental to its G main activity, namely; getting orders from the clients and selling the products' to varii:>us customers of.the company >~ or not. In the notice .to show cause its activities are said to be sale and/or getting booking or.ders fo.r the product. H 1078 SUPREME COURT REPORTS [2008) 6 S.C.R. A Whether in the aforementioned situation, the appellant has 1- • incurred any liability to pay service tax or not has not been determined. Its principal activities, have not been determined. Appellant has also not appeared before the assessing authority or the appellate authority. The interest 8 of justice would be subserved if the matter is remitted to the assessing authority with liberty to the parties to adduce such evidence as may be found necessary for determining t the issue(s). [Paras 17, 18, 19, 20 and 21] [1083-H; 1084-A, D, E, H; 1085·A·C] c Larsen and Tourbo Ltd. v. Commissioner of Central Excise, Chennai 2006 (3) STR 321 (T·LB); Medpro Pharma Pvt. Ltd. v. CCE, Chennai 2006 (3) STR 355 (T·LB) ·-referred to. CIVIL APPELLATE JURISDICTION : Civil Appeal D No.1713 of 2007. From the Judgment and Order No
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