Mark-up on ocean freight treated as trading income, not taxable service consideration, so the service tax demand failed.

Mark-up earned on ocean freight was treated as trading income arising from purchase and sale of cargo space, not as consideration for a taxable service. On that reasoning, the service tax demand could not survive, particularly because an earlier decision in the same assessee's case had already taken the same view for a prior period. The demand was set aside and the appeals were allowed.

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Issues: Whether service tax was leviable on the mark-up earned on ocean freight, and whether the demand could survive in view of the earlier decision on the same issue.

Analysis: The dispute concerned the character of the amount collected over and above the ocean freight. The earlier Tribunal decision in the appellant's own case for a prior period had held that such mark-up represented trading in cargo space and not consideration for a taxable service. Following that binding reasoning, the present demand was held unsustainable.

Conclusion: The demand for service tax on the mark-up ocean freight was set aside and the appeals were allowed.

Ratio Decidendi: Mark-up earned on the purchase and sale of cargo space is trading income and not consideration for a taxable service, and therefore is not liable to service tax.

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