Clearing and Forwarding Agency Service

CCE, Salem vs. Salem Starch & Mfrs. Service Indl. Co-op. Society Ltd. 2014 (33) STR 16 (Mad.)

The assessee in this case a co-operative society formed for improvement of tapioca and sago, starch industry and economic condition of cultivators. The owners/principals brought consignment for sale to society’s premises for auction. After sale, goods were delivered to buyer at sales premises itself by owner/principal. Society prepared invoices on behalf of principal, for amount paid to them for storage, testing charges and other handling charges and they have also maintained records on receipt of the amount and the stock received and available after the sale.

The High Court after observing facts held that, society was not doing forwarding service. Handling goods on receipt raising invoices on sale or maintaining of records as to stock availability, at the best, showed Society only as agency offering storage facility, which could not convert the transaction as that of C&F Agent. Incidental services offered in transaction in arranging transportation of goods to buyer could not decide the nature of transaction. Further, department itself was not certain about head under which transaction would fall and it attempted to hit at some clause to bring society somehow within the net of taxation.