JUDGMENT

S.B. Sinha, J. —

1. Short question arising in the appeal is whether in the facts and circumstances of this case, the petitioner renders any services so as to incur the liability to pay service tax.

2. The factual background leading to the said question may briefly be noticed.

Appellants herein entered into an agreement with Gas Authority of India Ltd. (GAIL) titled ‘Consignment Stockistship Agreement’.

3. Inter alia, on the premise as to why they should not be asked to pay ‘services taxes’, a show cause notice was issued on the appellant on 20.10.2003. Cause was shown by it saying that no service is being provided by it as a clearing and forwarding agent of GAIL. An order in original was passed by the Deputy Commissioner, Central Excise on 17.3.2004 directing payment of service tax with interest as also penalties as demanded under the show cause notice.

4. An appeal preferred thereagainst by the appellant was dismissed by the appellate authority by a judgment and order dated 15.2.2005. A further appeal preferred by the appellant before the Central Excise and Sales Tax Appellate Tribunal has also been dismissed.

5. Mr. P.K. Sahu, learned counsel appearing on behalf of the appellant, drawing our attention to the impugned order, would submit that from a bare perusal thereof, it would be evident that the appellant merely accepts offer on behalf of its principal and its activities being not extended to the job of a clearing and forwarding agent, the impugned order cannot be sustained. It was urged that the authorities under the Act in determining the liabilities of the appellant had proceeded only on the premise that a processing agent would be a clearing and forwarding agent as was held in the case of Prabhat Zarda Factor (Pvt.) Ltd. v. CCE, Patna,1 [2002 (145) ELT 222] which having subsequently been overruled by the larger Bench of the Tribunal, the impugned judgment cannot be sustained.

6. Mr. Gopal Subramanium, learned Additional Solicitor General appearing on behalf of the Respondent, on the other hand, would contend that a document must be read as a whole. So read, it would appear that the appellant not only receives orders on behalf of GAIL but also gets the insurance cover for the goods and sale of the goods which would clearly come within the purview of clearing and forwarding activities. Such activities on the part of the appellant, it was urged, being not incidental to the main purpose for which it was appointed as a stockist agent, the impugned judgment cannot be faulted.

7. Before we embark upon the rival contentions of the parties, we may notice the definition of ‘clearing and forwarding agent’ as also ‘business auxiliary service’ as contained in Section 65(19) and Section 65(25) of the Act, which read as under :

“65(19) “business auxiliary service” means any service in relation to

(i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or

(ii) promotion or marketing of service provided by the client; or

(iii) any customer care service provided on behalf of the client; or

(iv) procurement of goods or services, which are inputs for the client; or

(v) production or processing of goods for, or on behalf of, the client;

(vi) provision of service on behalf of the client; or

(vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision, and includes services as a commission agent, but does not include any information technology service and any activity that amounts to “manufacture” within the meaning of clause (f) of section 2 of the Central Excise Act, 1944(1 of 1944).

(25) “clearing and forwarding agent” means any person who is engaged in providing any service, either directly or ind