commission agent and not of clearing and forwarding agent.

Malhotra Distributors Pvt.  Ltd.  v/s CCE [2015] 55 taxmann.com 245 (Mumbai-CESTAT)

 

Where      the      assessee     merely      procures purchase    orders     based    on    prices     deter- mined  by the  principal  and  does  not  deal  with goods  at all, his services   would  be that of commission  agent and not of clearing  and forwarding  agent.

 

FACTS:

The Appellant received commission from manufacturer of goods for rendering assistance in the marketing of goods, by  obtaining  orders  and  also  ensuring  that  the  goods are sold at the terms and discounts specified by the manufacturer. The Appellant contended that the activities are taxable under Clearing and Forwarding services

 

HELD:

The Tribunal observed that in terms of agreement between the parties, the Appellant has to only procure the orders from the stockists and forward them to manufacturers and ensure that the goods are sold at the terms and discounts specified in writing by the manufacturer. For the services so rendered, commission at prescribed percentage on the net sale value was receivable. Therefore,  having regard to the terms of agreement and relying upon various cases including  Larsen & Toubro Ltd. [2006] 4 STT 231 (New Delhi) the Tribunal  held   that the Appellant  did not deal with the goods at all as is expected in the case of clearing & forwarding Agent and he was liable for service tax  as commission agent.