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of <h1>Customs Tribunal Reduces Pre-Deposit for Tax Appeal, Grants Extension</h1> <h3>M/s GREENWICH MERIDIAN LOGISTIC (I) PVT LTD Versus COMMISSIONER OF SERVICE TAX, MUMBAI-II</h3> The Court modified the Customs, Excise & Service Tax Appellate Tribunal's order, reducing the pre-deposit amount from Rs.89 lakhs to Rs.45 lakhs for ... Freight Forwarding Agency - Business Auxiliary Services - The appellant was a freight forwarding agency engaged in the business of booking cargo space on shipping lines for consideration and thereafter allotting the same to exporters also for consideration - Revenue was of the view that the Assesse was rendering business auxiliary services by promoting the service of cargo space provided by the shipping line - Held that:-Following Leaap International Pvt. Ltd. vs. CST [2013 (5) TMI 112 - MADRAS HIGH COURT] - When the question whether Assessee's services were classifiable under Business Auxiliary Service had to be adjudicated upon by the Tribunal, there cannot be a full waiver - The Tribunal prima facie was of the view that the appellant rendered services to the shipping lines and was liable to pay service tax under the category of business auxiliary services. The appeal was partly allowed – Pre-deposit was ordered to be paid - there shall be interim stay against recovery of tax, interest and penalty levied by the orders of the adjudicating authority – Partial Stay Granted. Issues:Challenge to order of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) granting stay against recovery of tax, interest, and penalty based on pre-deposit requirement.Analysis:The appellant challenged the CESTAT's order requiring a deposit of Rs.89 lakhs within 8 weeks to stay recovery of tax, interest, and penalty. The main issue raised was whether the pre-deposit of duty and penalty should have been completely waived for hearing the appeal on its merits. The appellant, a freight forwarding agency, argued it traded in cargo space without providing services to shipping lines, contrary to the revenue's claim of rendering business auxiliary services. The Tribunal's prima facie view was that the appellant did provide services, making it liable for service tax under business auxiliary services.The appellant contended it was not an agent of shipping lines, had paid for cargo space, and sold it to exporters for profit without receiving any payment from the shipping lines. The Tribunal's decision was influenced by a similar case in Chennai, where the pre-deposit amount was reduced by the High Court. Despite a tax demand of Rs.2.25 crores, the Tribunal directed the appellant to deposit Rs.89 lakhs within the limitation period, leading to the appeal.The Revenue argued that the pre-deposit amount was reasonable compared to the total tax demand of Rs.2.75 crores, justifying the Tribunal's decision. Considering the Chennai Bench's decision and the appellant's arguable case, the Court modified the order, reducing the pre-deposit amount to Rs.45 lakhs. The appellant requested a three-month extension due to liquidity issues, which was granted. The modified order required the appellant to deposit Rs.45 lakhs by a specified date to stay recovery of tax, interest, and penalty until then.
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