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of <h1>Tribunal rules in favor of appellant on tax issues</h1> <h3>Chinubhai Kalidas & Bros. Versus C.S.T. Service Tax- Ahmedabad</h3> Chinubhai Kalidas & Bros. Versus C.S.T. Service Tax- Ahmedabad - TMI Issues:1. Taxability of brokerage income and special commission.2. Taxability of Air Commission under BAS.3. Application of extended period of limitation for demand of service tax.4. Relevance of exemption notification for Air Commission.5. Basis of demand on accrual basis vs. receipt of income basis.Issue 1: The appellant contested the demand of service tax on brokerage income and special commission, arguing that the activities involved trading of freight space in shipping lines, not promoting the services of any provider. The appellant relied on various decisions supporting their stance. The Tribunal referenced precedents like Continental Carriers and Karam Freight Movers, emphasizing that mere sale and purchase of cargo space for profit does not constitute a taxable activity under the Finance Act, 1994. Following these rulings, the Tribunal found no merit in the demand for service tax on brokerage and commission income from shipping lines related to the sale and purchase of freight space.Issue 2: Regarding the taxability of Air Commission under BAS, the Commissioner (A) had set aside the penalty, noting the element of doubt and subsequent clarification from DGST post-litigation. The Commissioner (A) observed reasonable cause for the appellant's actions and waived penalties under sections 76 and 78 of the Finance Act, 1994. Consequently, the Tribunal found it just to set aside the demand and allow the appeal concerning Air Commission.Issue 3: The appellant argued against the invocation of the extended period of limitation for the demand of service tax. The Tribunal considered the reasonable cause for non-payment of duty in the case of Air Commission and decided to set aside the extended period of limitation, ultimately leading to the demand being set aside and the appeal being allowed.Issue 4: The appellant asserted entitlement to exemption under notification no. 13/2003-ST for the Air Commission. However, the Tribunal's decision did not explicitly address the relevance or applicability of this exemption in the judgment.Issue 5: The appellant raised a concern regarding the demand being based on the trial balance sheet prepared on an accrual basis, emphasizing that service tax should be demanded based on the receipt of income at the material time. While this argument was presented, the Tribunal's decision did not delve into this issue specifically in the judgment.
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