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2018 DIGILAW 1232 (RAJ)

Shreenath Roadways v. Union Of India

2018-05-09

K.S. JHAVERI, VIJAY KUMAR VYAS

body2018
JUDGMENT K.S. Jhaveri, J. - By way of this appeal, the appellant has challenged the judgment and order of the Tribunal [2017 (52) S.T.R. 371 (Tribunal)] whereby the Tribunal has dismissed the appeal preferred by the assessee. 2. This court while admitting the appeal on 9-8-2017 framed the following substantial questions of law :- "(ii) Whether, the Tribunal was justified in holding that the service rendered by the appellant falls in the category of clearing and forwarding and liable to pay service tax as per the Section 65(105)(j) of the Finance Act, 1994? (iii) Whether, the Tribunal was correct in law and in not deciding the ground of limitation taken in memo of Appeal, irrespective of the fact that it was decided by the Adjudicating authority as such order passed by the Tribunal can be said to be proper and legally sustainable while confirming the demand as adjudicated of Rs. 3,20,604?" 3. Brief facts of the case are that the appellants are engaged in providing service with reference to loading, unloading, transportation, storage of cargo for M/s. Binani Cement Ltd. The dispute in the present case is relating to their service tax liability under the category of "Clearing and Forwarding Agent" in terms of Section 65(25) read with Section 65(105)(j) of the Finance Act, 1994. The appellants were registered with the Department from 2003 onwards under the said category and were paying service tax. The present proceedings are with reference to non-payment of service tax on full consideration received by the appellant from their clients. The Original Authority confirmed the service tax liability of Rs. 3,20,604/- and imposed equal amount of penalties under Sections 76 and 78 of the Finance Act, 1994. 4. Counsel for the appellant has contended that the Tribunal has committed serious error in dismissing the appeal of the assessee inasmuch as the period involved in the present case is from 1st April, 2000 to 9th September, 2004 which is clear from the order of the Original Authority. 5. He has also taken us to definition of clearing and forwarding agent under Section 65 (25) of the Finance Act, 1994 which reads as under :- "Clearing and Forwarding Agent" means any person who is engaged in providing any service, either directly or indirectly, connected with the clearing and forwarding operations in any manner to any other person and includes a consignment agent. Section 65(105)(j) of the Finance Act, 1994 provides definition of taxable service in relation to clearing and forwarding agent as under :-"taxable service" means any service provided to a client, by a clearing and forwarding agent in relation to clearing and forwarding operations, in any manner. Section 67 of the Finance Act, 1994 provides that the value of any taxable service shall be the gross amount charged by the service provider for such service rendered by him." 6. Thereafter, he has taken us to the conditions of the contract dated 18-6-1998 and transportation contract entered on 1-4-2005 which reads as under :- "Further, you shall be responsible for maintaining all the records/registers, formats, and submission of daily/periodical report to us/to our staff as per directions from time to time. You shall engage your own labour and other manpower as may be required to carry out all such operations and you shall be reimbursed loading and unloading charges as mentioned below : Unloading charges Rs. 7/- per MT Loading charges Rs. 7/- per MT Apart from the above, you shall be paid service charges as mentioned below as remuneration for the services rendered : Service charges Rs. 7/- per MT "Handling and storage : You shall be responsible for all the handling work of cement of out Depot i.e. Unloading of cement from the trucks/trailers at our depots, properly stacking the same in the godown and arranging loading of the cement in trucks or any other vehicle for onward despatch against our Delivery Orders." 7. Further, Learned Counsel for the appellant has taken us through the defence taken by him before the original authority which reads as under :- "that M/s. Binani Cement Ltd. have a storage depot at Sadva, Mansarovar, Jaipur where the said M/s. Binani Cement Ltd. are transferring the Cement manufactured by them for storage at the same place for convenient distribution/sale of the said cement to the customers in the vicinity and around the said storage depot. that the time of arrival of the goods at Rail Heads under the Cover of Transfer challans issued by M/s. Binani Cement Ltd., the staff employed at the above said storage places requisition the services of labour from the noticees for unloading of the cement at Rail heads-and its loading in the Trucks for transportation of the Cement from the Rail head to the above said storage place." 8. Therefore, he contended that the Original Authority has not appreciated the facts of the case correctly. 9. He has also taken us to the order passed by the Commissioner (Appeals) wherein it has been observed as under :- "Now in the present case since there is no dispute about the fact that the Appellants are not engaged in clearing of any Cement from the factory of M/s. Binani Cement Ltd. and they hare engaged only in dealing handling of the goods which have already been cleared by M/s. Binani Cement Ltd. from their factory and are transferred to their depots for convenient sale for the said Cement. Now since it is clearly establish that the Appellants are not engaged in clearing of any Cement from the factory of M/s. Binani Cement Ltd. and they are dealing with the goods which have already been cleared by M/s. Binani Cement Ltd. from their factory, the activities undertaken by the Appellants, by no stretch of imagination can be covered under the heading Clearing and Forwarding Agent as defined in Section 65 (105)(j) of the Finance Act, 1994. On this ground alone the impugned Order-inOriginal is liable to be set aside. In support of contention as above reliance is placed on the Division Bench judgment of the Hon'ble High Court of Punjab and Haryana at Chandigarh in the case of Commissioner of Central Excise, Panchkula vs. Kulcip Medicines (P) Ltd. reported in 2009 (14) S.T.R. 608 . 10. He contended that the Tribunal while considering the matter has wrongly decided against the appellant. 11. He has relied upon the Circular F. No. 137/04/2002-CX.4, dated 24-4-2002 where Clause (10) provides as under :- "The matter has been examined. Normally, a C and F agent receives goods from the factories or premises of the Principal of his agents, stores these goods despatches these goods as per orders received from the Principal of owner, arranges transport, etc. for the purpose and prepares invoices on behalf of the Principal. For this service, the C&F agents receives commissions on the basis of agreed terms. Therefore, an essential characteristic of any services, to fall in the category of C&F agent, is that the relationship between the service provider and receiver should be in the nature of principal (owner) and agent. for the purpose and prepares invoices on behalf of the Principal. For this service, the C&F agents receives commissions on the basis of agreed terms. Therefore, an essential characteristic of any services, to fall in the category of C&F agent, is that the relationship between the service provider and receiver should be in the nature of principal (owner) and agent. The C&F agent carries out all activities in respect of goods right from stage of their clearances from the premises of the principal to its storage and delivery to the customers." 12. Counsel for the appellant has relied on the decision of Punjab and Haryana High Court in Commissioner of Central Excise, Panchkula vs. Kulcip Medicines (P) Ltd. - 2009 (14) S.T.R. 608 (P&H) wherein it has been observed as under :- 2. Brief facts of the case may first be noticed. The assessee-respondent is holding registration certificate in form ST 2 for payment of Service Tax as 'clearing and forwarding agent'. Under Section 70 of the Finance Act, 1994 every person liable to pay service tax is required to furnish to the proper officer of Central Excise a return in the form of ST-3. As per amended Rule 7(1) of Service Tax Rules, 1994 the return is to be filed on half yearly basis. The assessee-respondent entered into an agreement with M/s. Cipla for handling and distribution of their products and were entrusted with the job of receiving, storing and distributing CIPLA products to their authorised stockists and distributing centres. For the service so rendered, the assessee-respondent was entitled for commission based on agreed percentage of sales figures and also for reimbursement of recurring expenses. The assessee-respondent failed to submit the half yearly return for the period ending 31-3-2001 therefore a show cause notice dated 15-6-2001 was issued by the Deputy Commissioner, Ambala Division as to why penalty be not imposed upon them under Section 77 of the Finance Act, 1994 for contravention of Section 70. A penalty of Rs. 1000/- was imposed and the assessee-respondent was directed to pay service tax on the taxable service rendered by them along-with interest and to file the return in form ST-3 for the half year ending 31-3-2001 vide order-in-original dated 30-10-2002 (A.1). A penalty of Rs. 1000/- was imposed and the assessee-respondent was directed to pay service tax on the taxable service rendered by them along-with interest and to file the return in form ST-3 for the half year ending 31-3-2001 vide order-in-original dated 30-10-2002 (A.1). The assessee-respondent preferred an appeal before the Commissioner (Appeals) but the same was rejected vide order dated 8-9-2003 (A.2) by holding that assessee-respondent has been correctly treated as "C&F agent". 5. On the basis of the afore-mentioned para, the Tribunal concluded that even the circular clarified that levy would be attracted only when clearing and forwarding agent carries out both clearing and forwarding operations. It referred to the terms of the agreement showing that the dealer only attended to the clearing of the medicines manufactured by CIPLA. The consignment of medicines are cleared by the manufacturer and delivered to the dealer at his premises. After recording the aforesaid finding, the Tribunal proceeded to hold that once there is no clearing activity taken by the dealer therefore the service rendered by him would not satisfy the requirement of clearing and forwarding agent and consequently it set aside the demand. It also followed the earlier view taken by the Tribunal in the case Mahavir Generics vs. Commissioner of Central Excise, Bangalore. It is appropriate to notice that in Mahavir Generics case, (supra) Delhi Bench of the Tribunal has taken the view that the agreement between the dealer and the company clearly showed that dealer was not acting as a clearing and forwarding agent then services rendered by the dealer could not be treated as one to a client by the clearing and forwarding agent in clearing and forwarding operations in any manner. Therefore the service cannot be taxed. The tax liability in relation to service tax as per the scheme of 1994 Act is attached to the taxable service. Consequently the Tribunal held that so long as the dealer is not providing taxable service he cannot be brought under the net of service tax. 11. The question which falls for consideration is whether word 'and' used after the word 'clearing' but before the word 'forwarding' at two places in Clause (j) be considered in a conjunctive sense or dis-injunctive sense. It appears to be fairly well settled that the context and intention of legislature are the guiding principles. 11. The question which falls for consideration is whether word 'and' used after the word 'clearing' but before the word 'forwarding' at two places in Clause (j) be considered in a conjunctive sense or dis-injunctive sense. It appears to be fairly well settled that the context and intention of legislature are the guiding principles. In that regard reliance may be placed on the judgment of Hon'ble the Supreme Court in the case of Mazagaon Dock Ltd. vs. Commissioner of Income Tax - (1958) 34 ITR 368 (SC) . By necessary intendment the expression 'a clearing and forwarding agent in relation to clearing and forwarding operations, in any manner' contemplates only one person rendering service as 'clearing and forwarding agent' in relation to 'clearing and forwarding operations'. To say that if, one person has rendered service as 'forwarding agent' without rendering any service as 'clearing agent' and he be deemed to have rendered both services would amount to replacing the conjunctive 'and' by a disjunctive which is not possible. The counsel for the revenue has not been able to bring on record any material to show the word 'and' should be construed as disjunctive. He has not shown any 'trade practice' which may lead to a necessary inference that service of one kind rendered by one is invariably considered to comprise both. No argument has been advanced before us by him to canvass that the legislature intention is discernible from the scheme of the statute or from any other relevant material. Therefore the word 'and' should be understood in a conjunctive sense. [See Maharaja Sir Pateshwari Prasad Singh vs. State of U.P. - (1963) 50 ITR 731 (SC)] . In these circumstances if we read the word 'and' as 'or' then it would amount to doing violence to the simple language used by Legislature which cannot be imputed ignorance of English language. In that regard we place reliance on the judgment of Hon'ble the Supreme Court rendered in the case of Inayat Ali Khan vs. State of U.P. - (1971) 2 SCC 31 (Para 5) and para 6 of the judgment of Hon'ble the Supreme Court rendered in the case of APE Belliss India Ltd. vs. Union of India - 2001 ECR 229 (SC) . The observations of their Lordship reads thus : "6... A plain reading of the Section (sic Tariff Public Notice) clearly shows, as contended by Mr. The observations of their Lordship reads thus : "6... A plain reading of the Section (sic Tariff Public Notice) clearly shows, as contended by Mr. Bhatt, that for an alloy steel to be considered as stainless steel, it will have to satisfy two conditions i.e. The alloy steel should be known in the trade as stainless steel and further, it should contain 11% chromium as a component of the allow steel. This is clear from the use of the word "and". If the intention of the trade notice was to treat the two types of alloy steels as stainless steel, then it would have been made clear by using the word "of instead of the word "and". 12. We are further of the view that the circulars issued by the Board are binding and meant for adoption for the purposes of bringing uniformity. In that regard reliance may be placed on the judgments of Hon'ble the Supreme Court in the cases of Ranadey Micronutrients vs. Collector of Central Excise - 1996 (87) E.L.T. 19 (S.C.) and Paper Products Ltd. vs. Commissioner of Central Excise -1999 ECR 284 (SC) . If the aforesaid principle is applied to the facts of the present case there does not remain any doubt that the circular issued by the Board is to be considered as binding and cannot be deviated even by the department. On that account also the expression 'clearing and forwarding agent' have to be interpreted in the light of the circular. 13. The view taken by the Tribunal in Mahavir Generics's case (supra) has been accepted by the revenue as no appeal has been filed. Moreover we are not able to persuade ourselves to accept the view taken by the Larger Bench of the Tribunal in the case of Medpro Pharma Pvt. Ltd. (supra) which has been fascinated by musical notes of symphony as is evident from the following paras : "31. We have heard both sides and perused the record. Moreover we are not able to persuade ourselves to accept the view taken by the Larger Bench of the Tribunal in the case of Medpro Pharma Pvt. Ltd. (supra) which has been fascinated by musical notes of symphony as is evident from the following paras : "31. We have heard both sides and perused the record. On a fresh look at the whole issue and after taking into account the various new Fangled arguments and nascent lines of thinking, unwrapping before us, as discussed in the fore-going paragraphs, we find ourselves in a better position to appreciate the wisdom in the words of Jules Romains when he said "What I say below represents only conclusions with which I would identify myself, if I were obliged to stop thinking today". The underlying wisdom in these words has greatly encouraged us in this inquest to appreciate the emerging facts and scenario in a proper perspective. Crucial key-word the definition of taxable services, namely "C&F Operations" needs to be viewed afresh in this scenario. The whole "operations" involved in "C&F operations" now remind us of an orchestra, performing a western classical symphony. It reminds us of a connoisseur's experience of harmony in western classical music. While listening to Mahler's 9th symphony, one does not listen to an individual violin or a trumpet, but the harmony emanating from many different seemingly unrelated instruments. In same way, a C&F Agent's functions consisting of seemingly unrelated tasks are well orchestrated. This view of ours is strengthened by various references including the Report of United Nations Economic Commission for Africa referred to by us in the preceding paragraphs all revealing in no uncertain terms that the freight forwarders are known variously as clearing agent, shipping forwarding agent etc. We are, therefore, of the view that even if one segment of activities is not demonstrated to be performed, it cannot be held that the appellants were not engaged in taxable service. Due to their orchestrated nature of work, such isolated activity can also be covered under "C&F Operations". Merely, because the bassoon was not played in one of the movements of a symphony, it does not cease to be otherwise a part of the orchestra. While forming this view, we have certainly not overlooked the fact that while music can be sometimes taxing, a tax can never be musical. 32. Merely, because the bassoon was not played in one of the movements of a symphony, it does not cease to be otherwise a part of the orchestra. While forming this view, we have certainly not overlooked the fact that while music can be sometimes taxing, a tax can never be musical. 32. While arriving at this conclusion, we also go by the trade understanding based on sheer common sense, which is often uncommon. Because a buyer buys only rice and not wheat in a grocery shop, which claims to sell "wheat and rice", the shop cannot cease to be a shop selling "wheat and rice". In the same-way, rendering only "forwarding" service cannot make the appellant ceases to be "Clearing and Forwarding Agent", so as to save him from the tax. Some customers may want only clearing operations, while some forwarding, and others both. The expression "clearing and forwarding operations" is a compendious expression of nature of services offered any of which will bring the service providers in the tax net of this category. Moreover, in the process of forwarding operations-clearance stages may arise such as at octroi posts or subsequent transits. 33. We, do agree that it is the context in which the word "and" is positioned, being sandwiched between the words "clearing" and "forwarding" has to be looked into while interpreting the meaning. Like the legendary Trishanku, the word "and" is dangling between "clearing" and "forwarding" - neither divorcing from the Heavens, nor from the Earth. In such a positioning, it is not possible to segregate the holistic concept of "clearing and forwarding" into divisible activities, either or both of which can be provided for answering the customers' needs." 14. We have not been able to understand with utmost respect to the Tribunal as to what is 'Orchestrated nature of work' involved in the present transaction. The dealer in the present case as per the arrangements reached between the parties has to receive goods which are already got 'cleared' by the manufacturer. The dealer is to store those goods and forward to the buyer of the goods as per direction received. The dealer in the present case as per the arrangements reached between the parties has to receive goods which are already got 'cleared' by the manufacturer. The dealer is to store those goods and forward to the buyer of the goods as per direction received. In that regard the findings of the Tribunal in the instant case is patently clear when it observed as under in para 6 : "It is clear from the terms of the agreement that appellant herein does not attend to the clearing of the medicines manufactured by Cipla. Consignments of medicines are cleared from the factory by the manufacturer and delivered to the appellant at his premises. In this factual situation, it has to be held that there is no clearing by the appellant and for that reason, the service rendered by the appellant does not satisfy the requirement of clearing and forwarding. We, therefore, are of the view that the demand is not sustainable. To the same effect is our earlier decision in the case of Mahavir Generics." 15. The example of 'wheat and rice' grocery shop is obviously wholly misappropriate and does not fit in the context. We are also not in agreement with the interpretation of word 'and' which has already been dilated upon by us." 13. He contended that the said judgment was confirmed by the Supreme Court in Commissioner of Central Excise, Panchkula vs. Kulcip Medicines (P) Ltd. - 2012 (25) S.T.R. J127 (S.C.)] . 14. He further submits that the said judgment has been followed by the Tribunal in Narottam and Company vs. Commissioner of Central Excise, Jaipur - 2014 (33) S.T.R. 472 (Tri.-Del.) which is an identically situated contractor holding as under :- 3. 14. He further submits that the said judgment has been followed by the Tribunal in Narottam and Company vs. Commissioner of Central Excise, Jaipur - 2014 (33) S.T.R. 472 (Tri.-Del.) which is an identically situated contractor holding as under :- 3. Shri Mayank Garg, Advocate, the learned Counsel for the appellant, pleaded that appellant are not involved in clearing operations at all, that they only provide labour for unloading of the cement at the rail heads, loading into the trucks for transportation to the storage godown of M/s. Binani Cement and thereafter unloading at the godown and its stacking and thereafter arranging the dispatch of the cement as per the directions of M/s. Binani Cement, that they also maintained a record of the receipt and dispatch, that the activity of the appellant is only of forwarding and not clearing and forwarding and, hence, the same is not taxable, that Larger Bench judgment of the Tribunal in the case of Medpro Pharma Pvt. Ltd. vs. CCE, Chennai (supra) has been overruled by Hon'ble Punjab and Haryana High Court in the case of CCE, Panchkula vs. Kulcip Medicines (P) Ltd. reported in 2009 (14) S.T.R. 608 (P&H) , wherein it was held that the word and used after the word clearing but before the word forwarding in Section 65(105)(j) of the Finance Act, 1994 has to be understood in conjunctive sense and that for attracting service tax under Section 65(105)(j) read with Section 65(25) a person must engage both in clearing as well as forwarding activity and that in view of this, the impugned order, which is based on the Larger Bench judgment of the Tribunal in the case of Medpro Pharma Pvt. Ltd. vs. CCE, Chennai (supra) is not correct. 7. The dispatch of the goods from the factory to the godown is arranged by the principal M/s. Binani Cement and not only this, even the godown has been rented by M/s. Binani Cement only where they have deployed their own staff. Thus, the activity of the appellant is only of forwarding and not clearing and forwarding and hence in view of judgment of Hon'ble Punjab and Haryana High Court in the case of CCE, Panchkula vs. Kulcip Medicines (P) Ltd. (supra), the appellants activity would not be covered by the C&F agents service taxable under Section 65(105)(j) read with Section 65(25) of the Finance Act, 1994. We also find that the judgment of Hon'ble Punjab and Haryana High Court in the case of CCE, Panchkula vs. Kulcip Medicines (P) Ltd. (supra), has been upheld by the Apex Court vide judgment reported in 2012 (25) S.T.R. J127 (S.C.). In view of this, the impugned order is not sustainable. The same is set aside. The appeal is allowed." 15. He has also relied on another decision of Supreme Court in Coal Handlers Pvt. Ltd. vs. Commissioner of Central Excise, Range Kolkata-I - 2015 (38) S.T.R. 897 (S.C.) wherein it has been held as under :- "11. From the reading of the definition contained in the aforesaid provision, together with its dictionary meanings contained in Legal and Commercial dictionaries, it becomes apparent that in order to qualify as a C and F Agent, such a person is to be found to be engaged in providing any service connected with 'clearing and forwarding operations'. of course, 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 provided directly or indirectly would be of no significance and such a person would be covered by the definition. Therefore, we have to see as to what would constitute clearing and forwarding operations. As is clear from the plain meaning of the aforesaid expression, it would 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 context of these appeals, it would essentially include getting the coal cleared as 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 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 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. The larger Bench rightly enumerated these activities which the C and F Agent is supposed to perform. 12. The larger Bench rightly enumerated these activities which the C and F Agent is supposed to perform. 12. On the facts of the present case, we find that 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 between the coal company and Ambuja 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. Not only this, destination of the goods is known to the coal company and the railway rakes are placed by the coal company for the said destinations. The destination is the factories of the principal itself, namely, Ambuja companies, where the coal is to be delivered by the coal company as per pre-determined/agreed covenants between them. 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 Ambuja companies. The Appellant does not even undertake any loading operation. The primary job of the Appellant, as per the contract between the Appellant and the Ambuja companies, is of supervising and liaisoning with the coal company as well as the Railways to see that the material required by Ambuja 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. We are, thus, of the clear opinion that the services rendered by the Appellant would not qualify as C and F Agent within the meaning of Section 65(25) of the Act." 16. He also relied on the judgment of Mumbai Tribunal in case of Novacare Drug Specialities Pvt. Ltd. vs. Commr. of C. Ex. Mumbai-II - 2014 (34) S.T.R. 247 (Tri.-Mumbai) wherein it has been observed as under :- "5.1 We have perused the agreement entered into by the appellant with Cipla Ltd. From the terms and conditions specified therein, the activities of the appellant start from receiving the goods supplied by Cipla, warehousing the same and dispatching as per the instructions given by Cipla. The appellant does not undertake any clearing functions from the premises of Cipla. Thus the activity of the appellant is a forwarding activity. 5.2 In the Kulcip Medicines case, the Hon'ble High Court of Punjab and Haryana held that to come under the category of "Clearing and Forwarding Agent" both the functions, namely, clearing and forwarding should be undertaken and the word "and" has been used in a conjunctive sense. The Hon'ble High Court also took notice of the Larger Bench decision in the case of Medpro Pharma and overruled the said decision. The SLP filed by the Revenue against the said decision was dismissed by the Hon'ble Apex Court after hearing the Petitioner. In these circumstances, the decision of the Hon'ble P&H High Court in Kulcip Medicines case prevails and have to be followed by all other subordinate authorities. The reliance placed by the Revenue on the Mahaveer Generics case does not help because it dealt with the case of a consignment agent which was included specifically in the definition of a C and F agent. Those are not the facts obtaining in the present case." 17. He therefore, contended that the view taken by the Tribunal is required to be reversed. 18. Counsel for the respondent Mr. Sandeep Pathak contended that the view taken by the Tribunal is just and proper in view of the observations made by the Original Authority which reads as under :- "19. I have carefully gone through the case records, personal hearing as well as reply to the Show Cause Notice and the Ruling prevailing on the subject issue. The assessee at the outset denied of having entered into any contract dated 18-6-98 and 1-6-2001 as the dump was not in existence and the said contracts were not signed by any of the parties. I find that Sh. Madhu Sudan Agrawal was issued summon on 20-10-2005 to appear on 24-7-2005 with some records but he failed to comply. Further the copy of contract dated 18-6-98 and 1-6-2001 were obtained through fax from M/s. Binani Cement Ltd., Ahmedabad on 22-10-2005. Sh. Vipul Mehta, Dy. Manager (A/c) of M/s. Binani Cement Ltd., Ahmedabad signed these contracts at the bottom of the same as these sign tally with sign on letter dated 1810-2005 addressed to the Department by M/s. Binani Cement Ltd. Ahmedabad in connection with Service Tax investigation against M/s. Shreenath Roadways. Sh. Vipul Mehta, Dy. Manager (A/c) of M/s. Binani Cement Ltd., Ahmedabad signed these contracts at the bottom of the same as these sign tally with sign on letter dated 1810-2005 addressed to the Department by M/s. Binani Cement Ltd. Ahmedabad in connection with Service Tax investigation against M/s. Shreenath Roadways. Further letter dated 30-1-2002 of M/s. Binani Cement Ltd., Ahmedabad addressed to M/s. Shreenath Roadways in connection with the investigation handling charges w.e.f. 1-2-2002 also beers the reference of their letter dated 18-6-98 and 23-112001. Thus, it is evident that the said contracts did exist and submission of the assessee is falls. Moreover, the assessee has failed to provide any detail or evidence that on what account the alleged amount has been received. 20. The assessee has further submitted that his activities relate to supply only labour which is not covered by the heading "C&F Agent" of the Service Tax Rules, 1994. I observe from the documents that the assessee had obtained Service Tax registration for the service being provided as C&F Agent on 10-12-2003 and started to pay Service Tax on part value from 1-4-2003 and full taxable value from 10-92004" 21. From the perusal of the said contracts it would be observed that the assessee was not only responsible for arranging labour but was also responsible for handling work at dump of M/s. Binani Cement Ltd., Ahmedabad, transportation for delivery of the material from dumps to dealers and maintaining the relevant records. For these activities viz. loading, unloading and other providing services the assessee was being paid the remuneration at agreed rates. Had the assessee been providing labour only. Fie would have not been paid remunerations for three different categories separately as explained above. Further, on careful reading of Section 65 (25), 65(105)(j) and 67 of the Finance Act, 1994. I find that the definition on the subject is quite clear and squarely applicable in the matter, which dines C&F means any person who is engaged in providing any service, either directly or indirectly, connected with the clearing and forwarding operations in any manner to any other person and includes a consignment agent. I find that the definition on the subject is quite clear and squarely applicable in the matter, which dines C&F means any person who is engaged in providing any service, either directly or indirectly, connected with the clearing and forwarding operations in any manner to any other person and includes a consignment agent. For this purpose definition of taxable service is also defined under Section 65(105)(j), which means any service provided to a client by a C&F Agent in relation to C&F operation, in any manner i.e. the service provided in the case is the service of loading unloading services being handling agent of M/s. Binani Cement Ltd. For this purpose, the value of taxable service will be the gross amount charged by M/s. Shreenath Roadways for such service (loading/unloading) rendered. Because normally a C&F agent receives goods from the factories or premises of the Principal or his agents, stores these goods, despatches these goods as per orders received from the Principal or owner, arranges transport, etc. for the purpose and prepares invoices on behalf of the Principal. For this service, the C&F agent receives commission on the basis of agreed terms. Therefore, an essential characteristic of any services, to fall in the category of C&F agent, is that the relationship between the service provider and receiver should be in the nature of principal (owner) and agent. The C&F agent carries out all activities in respect of goods right from stage of clearances from the premises of the principal to its storage and delivery to the customers and it is very well defined under Para 10 of Section 37B Order No. 2/1/2002-Service Tax, dated 2-4-2002. Further the assessee could not differentiate that the activities undertaken prior to taking Service Tax registration on 10-12-2003 was different from the activities undertaken on or after taking Service Tax registration. Thus, it is evident that the activities undertaken by the assessee is covered under C&F Agent and I hold accordingly." 19. He has also taken us to the observations made by the Tribunal which reads as under :- "We note that it is not factually correct to state that the appellants are engaged only in forwarding services as seen clearly from the terms of the contracts. He has also taken us to the observations made by the Tribunal which reads as under :- "We note that it is not factually correct to state that the appellants are engaged only in forwarding services as seen clearly from the terms of the contracts. For instance from a contract dated 1-6-2001 available in the impugned order, it is clear that the appellants were obliged to clear the consignments from railways on behalf of their clients and in case of delay in getting Rrs, they were to clear the cargo under necessary indemnity bond. They were also to bear the railway expenses incurred for getting the consignments cleared, liability for payment of demurrage, wharfage penal whargar, etc., which will be on the appellant's account. We find in such situation, it is clear that factually the appellants are involved in clearing activities also in terms of the statutory definition for C&F Agents. As the appellants were involved in both the clearing and forwarding activities alongwith maintenance of records for such dealings, their services are covered by tax entry. The appellants did not establish existence of any bona fide belief or reasonable cause for nonpayment of service tax during material time. They were registered with the department for C&F Agent service and were paying service but not on full quantum. As such, we find no reason to interfere with the impugned order. The appeal is dismissed." 20. We have heard both the parties. 21. Before proceeding with the matter, it will not be out of place to mention that from the clause which we have reproduced hereinabove, it is very clear that the appellant herein was only responsible for the handling of the work at the depot and in view of clause (10) of the circular they were not involved in the manufacturing activity. 22. Even otherwise, in view of the decision of Punjab and Haryana High Court in Kulcip Medicines (P) Ltd. (supra) which has been followed in Narottam and Company (supra), we are of the opinion that the case of the appellant herein is identically situated, therefore, both the questions are required to be answered in favour of the assessee against the department. 23. The appeal stands allowed.