High-seas sale trading margin cannot be separately taxed as service at the interim stage, with recovery stayed.

Import documents and invoices showed a principal-to-principal trading transaction on high-seas sale terms, with the trade margin already included in customs assessable value. The Board circular indicated that, in a high-seas sale, the contract price and trade margin form part of customs transaction value. On that basis, the same margin could not be separately subjected to service tax as Business Auxiliary Services at the interim stage. The appellant was therefore granted waiver of pre-deposit and recovery of the adjudged dues was stayed pending appeal.

---

---

Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery in a case alleging service tax liability on a high-seas sale trading transaction.

Analysis: The import documents and invoices indicated that the transaction was one of trading and sale on a principal-to-principal basis. The trade margin charged by the appellant was already included in the assessable value for customs purposes. The Board circular also indicated that, in a high-seas-sale transaction, the actual contract price and trade margin form part of the transaction value for customs valuation. On that basis, the same component could not be separately subjected to service tax as Business Auxiliary Services at the interim stage.

Conclusion: The appellant was granted waiver of pre-deposit and recovery of the adjudged dues was stayed during the pendency of the appeal.

---