Service Tax: Constitutional validity of Section 65(105)(zzzz) and Section 66 of the Finance Act, 1994 as amended by Finance Act, 2010 providing for levy of service tax on renting of immovable property service: Scope: This Court just followed the Full Bench decision of Delhi High Court in Home Solutions Retails (India) Ltd. v. Union of India and Others [2011 (45) VST 413 = 2011 (24) S.T.R. 129 (Del.) = STO 2011 Del 999], upholding the validity of the statutory provisions challenged in this Court. However, it was brought to the notice of this Court that in the Special Leave Petitions filed against the Full Bench decision of Delhi High Court (supra), Supreme Court granted conditional stay orders directing payment of service tax on renting of immovable property service from 1-10-2011 and following the Supreme Court order in the very same special leave petition [2012 (26) S.T.R. (J118) (S.C.) = STO 2011 SC 1166], the collection of arrears of tax until 30-9-2011 was stayed by this court. further interim orders, if any, issued by Honourable Supreme Court modifying the stay orders in the special leave petition pending against the judgment of Delhi High Court in Home Solutions Retails (India) Ltd. case (supra), will be applied in the case of all respondents and the Department is free to call for details of arrears and to recover the amount which is ordered by Supreme Court(Para 1,6).

Review petitions are disposed off.

Ultra Vires: Vires of Circular dated 08.05.12 challenged being not in consistent with the provisions of Point of Taxation Rules, 2011 and provisions of the Finance Act, 1994.Notice issued

Refund: Adjustment of excess service tax paid not allowed by department: Demands raised for the same excess paid service tax for the subsequent quarters and petitioners paid that amount on the insistence of department: Refund claim filed: HELD: It is not refund of a duty which is found upon completion of assessment excess paid that the petitioner is asking for. It is a duty which the petitioner has already paid separately and second time under insistence of the department which he is asking for being refunded. Under the circumstances, the question of unjust enrichment cannot be applied.

Service Tax: Clearing and Forwarding Agent of BALCO: Respondent was appointed as a consignment agent for a further period between 1-4-1999 to 31-3-2000: Scope and liability: Essentially under the agreement respondent was receiving the goods for sale outright to the customers that the respondent would get. It is of-course true that price thereof was pre-decided by the principal and respondent could not charge any higher or further rate. Nevertheless, sale was made by the respondent under its own invoice. For such purpose, respondent would receive a certain discount. Respondent would have to place the orders so as to reach the principal by 7th February of every month. In case of credit basis, same would be on freight pre-paid basis through BALCO’s nominated transporter. On advance payment, however, the same would be either on freight pre-paid basis or on freight to pay basis. The respondent was liable to pay sales tax and other taxes. Respondent also had responsibility to reach a minimum prescribed turn over of such sales. Most importantly, the qualifying criteria for renewal of agency provided that consignment agent would be renewed depending upon the performance in terms of committed off-take in both the products and release of payment on due dates and timely submission of sales tax forms. Thus the renewal of agency depended on the performance of the respondent in fulfilling its minimum consignment commitment and regular payments. Thus the task cannot be equated with that to be performed by C & F Agent in connection with clearing and forwarding operations(Para 12).

The Appellate Commissioner vide his order allowed the appeal and reversed the order passed by the original authority making following observations :“From the above, it is clear that the appellants is neither clearing any goods, nor forwarding any goods. Rather they purchase goods from BALCO and sell it to the customers on their own invoices. Further, it is admitted fact that they were receiving/they have received quantity discount and not commission. Such an activity would not come within the scope of services of clearing and forwarding agents and as mentioned in Mumbai Commissionerate above trade notice. Unless their services can be treated as one to a client by clearing and forwarding agent in relation to clearing and forwarding operation, in any manner the services cannot be taxed. Merely because the word consignment agent has been used in agreement they cannot be compelled to pay service tax. In this context, the Hon’ble CESTAT, New Delhi in case of Mahavir Generics reported at STO 2004 CESTAT 77 held that Service tax - Clearing and forwarding operations - Products of principal supplied to appellant on consignment basis and sold by appellant to customers - Activity not comes within services provided to client by clearing and forwarding agent in relation to clearing and forwarding operations - Service tax not leviable.” The department challenged the order of the Appellate Commissioner before the CESTAT. The Tribunal by impugned order dated 1-3-2005 rejected the Revenue’s appeal. The Tribunal relied on its earlier decision in case of M/s. Cipla Ltd. and Mahavir Generics [ STO 2004 CESTAT 77](Para 4,5).