Case: M/S Super Poly Fabriks Ltd Vs. Commnr. Of Central Excise, Punjab

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.

Court's reasoning:
8. There cannot be any doubt whatsoever that a document has to be read as a whole. The purport and object with which the parties thereto entered into a contract ought to be ascertained only from the terms and conditions thereof. Neither the nomenclature of the document nor any particular activity undertaken by the parties to the contract would be decisive.For the purpose of ascertaining as to whetherthe appellant in effect and substance was a clearing and forwarding agent or it was merely accepting orders for and on behalf ofGAIL, the same must be ascertained from the terms of the agreement itself.What is necessary for determining the question is as to whether the purported job of the appellant as a clearing and forwarding agent was incidental to its main activity, namely, getting orders from the clients and selling the products to various customers of the company or not. The notice to show cause contained the followingService charges of Rs.500/- PMT shall be paid by M/s GAIL to the consignment stockist (i.e. noticee) for the quantity sold by them.(ii) Rs.400/- PMT shall be paid to the consignment stockist for getting/booking orders for the product of M/s. GAIL.(iii) Rs.100/- PMT shall be paid to the consignment stockist for release/clearance of product locally from their stock on the orders booked by M/s. GAIL directly.The period in question is from 1.9.1999 to 31.7.2002. The notice to show cause had referred only to paragraph 20.1 and 20.3 of the agreement. Its activities are said to be sale and/or getting booking orders for the product.20.Whether in theaforementioned situation, the appellant has incurred any liability to pay service tax or not has not been determined. Its principal activities, as indicated hereinbefore, have not been determined.21. It is true that the appellant has not appeared before the assessing authority or the appellate authority.However, keeping this in view, we are of the opinion, that the interest of justice would be subserved if the matter is remitted to the assessing authority with liberty to the parties to adduce such evidence as may be found necessary for determining the issue(s). Appellant, however, shall not take any adjournment before the assessing authority and shall render all cooperation with it in the matter of determination of the question.