1. This is an appeal filed against Order-in-Appeal No. 662/2002-CE., dated 29-10-2002 passed by the Commissioner of Central Excise (Appeals), Bangalore.
M/s. CIPLA Limited, a manufacturer of pharmaceutical products appointed the appellant as their agent for receiving, storing and distribution of their products to various stockists, distributors and other customers. In terms of the Agreement between the CIPLA and the appellants, the appellant renders service of receiving, storing and distributing the pharmaceutical products, as per the directions of CIPLA from time to time. Initially the appellants registered as a Service Tax assessee and started paying Service Tax on the commission received by them from CIPLA. Later, they realized that their activity would not come within the purview of "Clearing & Forwarding Agents" and informed the Deputy Commissioner of Central Excise regarding surrendering their registration certificate but the departmental authorities directed the appellants to continue the registration under the category of C. & F, Agents and to comply with the provisions. The Assistant Commissioner passed an OIO dated 11-9-2001. The appellants approached the Commissioner (Appeals) who passed the impugned order. Aggrieved over the OLA, the appellants have come before this Tribunal for relief.
3. Shri G. Shiva Dass, the learned Advocate appeared for the appellants and Shri Ganesh Havanur, the learned SDK for Revenue.
4. The learned Advocate submitted that only those who carry out Clearing and Forwarding operations are liable to service tax in terms of Sub-clause Page 0211 (j) of Clause 72 of Section 65 of the Finance Act, 1994. As far as the appellant is concerned, they are receiving the products, storing them for distribution. They do not carry out the clearing operations. Hence, they cannot be called as Clearing and Forwarding Agents and are not liable to pay the service tax in that category. The learned Advocate relied on the definitions of Clearing & Forwarding Agents as given in Standard dictionaries. He also referred to the Agreement entered between the appellants and CIPLA. He relied on the following case-laws.Kulcip Medicines (P) Ltd. v. CCE, Delhi-III 2006 (1) S.T.R. 36 (Tribunal) : 2005-TIOL - 790-CESTAT-DEL.
6. We have gone through the records of the case carefully. As per the Agreement between the appellants and CIPLA, CIPLA hereby appoints Vaman (appellants) as its Agent to receive, store and distribute stocks of the products including promotional materials in the premises of 75, Bennerghatta Rd., N.S. Palya, Bangalore 560 076 and forward them in such lots and in such manner to parties and destinations within the country as may be directed by CIPLA from time to time.
From the above, it is clear that the appellants do not engage in the activity of clearing. As per Board's Circular dated 20-4-2002, Para 10, "The C&F agent carries out all activities in respect of the goods right from stage of their clearances from the premises of the principal to its storage and delivery to the customers". The Tribunal, in the case of M/s. Kulcip Medicines (P) Ltd. cited supra, has held that the activities undertaken by the assessee therein (another Agent of CIPLA) would not fall under the category of "Clearing and Forwarding Agents" since both the activities have not been undertaken by the assessee. In the above case, the Tribunal has followed the decision in the case of Mahavir Generics v. CCE (cited supra). A similar view has been taken by the Tribunal in the case of CCE v. Trade Tek Corporation (supra). Since in the present case, the appellant is not carrying out the activity of clearing in the light of the definition of the C&F Agents and also the ratio of the decisions cited, they would not come within the purview of C&F agents for levy of Service Tax. In the result, the appeal is allowed.
(Operative portion of this Order was pronounced in open Court on conclusion of hearing)