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of <h1>Tribunal Upholds Service Tax Demand on Excess Airfreight Charges</h1> <h3>M/s FLYJAC LOGISTICS PVT LTD. Versus COMMISSIONER OF SERVICE TAX. BANGALORE</h3> M/s FLYJAC LOGISTICS PVT LTD. Versus COMMISSIONER OF SERVICE TAX. BANGALORE - TMI Issues:1. Applicability of service tax on excess airfreight charges collected.2. Classification of services under cargo handling services.3. Invocation of the extended period of limitation.4. Financial hardship plea not raised by the appellant.5. Prima facie case for total waiver of dues.Analysis:1. The appellant, a logistics provider, engaged in handling imported goods and raised bills on importers under various heads. The dispute arose regarding the excess airfreight charges collected from importers. The Commissioner confirmed the demand of service tax on amounts collected in the name of freight but exceeding the actual freight charges. There were additional demands under the category of Business Auxiliary Service (BAS), along with interest and penalty.2. The appellant contended that the excess amount collected represented their profit on transportation and not payment for cargo handling services. The Chartered Accountant argued that their activities did not fall under cargo handling services as defined. However, the Deputy Commissioner argued that the appellants acted as cargo handling agents, specifically as console agents, a fact not rebutted by the appellants.3. The Tribunal analyzed the submissions and records, finding the appellant's argument regarding the excess amount as profit in freight not acceptable. It was noted that the appellant had not rebutted the finding that they acted as console agents. Consequently, the Tribunal held that the appellant failed to establish a prima facie case for a total waiver of the dues as per the impugned order.4. Despite the above findings, considering the facts and circumstances, the Tribunal directed the appellant to deposit a sum of Rs.25 lakhs within six weeks. Upon compliance, there would be a waiver of predeposit of the balance of dues as per the impugned order, with a stay on recovery until the appeal's disposal. The Tribunal's decision balanced the interests of the appellant and the revenue authorities pending the final resolution of the appeal.
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