TaxTMI 
TaxTMI 
2016 (1) TMI 300
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....mer agent. They also incur additional expenditure towards arranging drinking water, garbage clearance, transport for crew etc. The shipping line reimburses these expenses to the respondent and the same does not form part of the service charges. Charges for the services rendered as a steamer agent to the shipping line are collected separately and service tax is being paid on the said amount. The Department issued Show Cause Notice C. No. IV/16/134/2004-STC dated 17.12.2004 for the period 2001-02, 2002-03 on the ground that as per the books of account of the respondent, the collected of reimbursable expenses for the above mentioned period works ort to Rs. 21,89,729/- and the surplus income generated by collecting excess amount over and above the actual expenses incurred attracts service tax and called upon the respondent to pay a sum of Rs. 1,55,740/- towards the excess value. The Show Cause Notice alleged that the said amount of Rs. 21,89,729/- also forms part of value of services rendered and also proposed interest and penalty of Rs. 100/- per every day under Section 76 and under Section 78. The respondent vide reply dated 19.01.2005 had objected to the proposals set out in the Sho....
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....provided by a steamer agent in relation to a ship's husbandry or dispatch or any administrative work related thereto as well as the booking, advertising or canvassing of cargo, including container feeder services. The value of the taxable service in relation to service provided by a steamer agent to a shipping line, shall be the gross amount charged by such agent from the shipping line for services in relation to a ships husbandry or dispatch or any administrative work related thereto or in relation to the booking, advertising or canvassing of cargo, container feeder services including the commission paid to such agent. 3.3 Steamer agents incur various types of expenses on behalf of the shipping line such as pilotage and berth hire charges, Indian Coast light dues paid to the port authorities, cargo expenses paid to port authorities and transporters such as CONCOR/ railways, private transporters, chartered accountants fee, Income Tax, brokerage paid on export cargo, ship handing expenses paid to stevedoring agents. For all the above charges the Steamer agent is ordinarily reimbursed by the shipping line. Further, the steamer agent bills the principals i.e. the shipping line, for....
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.... work related thereto as well as the booking, advertising or canvassing of cargo, including container feeder services" I find that as per the Departmental Clarifications on Frequently Asked Questions, in respect of the question of what would constitute value of taxable service in case of a Steamer Agent, it has been clarified, interalia : " 'taxable service' means any service provided to a shipping line, by a steamer agent in relation to a ship's husbandry or dispatch or any administrative work related thereto as well as the booking, advertising or canvassing of cargo, including container feeder services" I further find that the nature of expenses billed by the Appellant on which this dispute has emanated, relates to items like 'Marine Charges', 'Garbage and Sewage removal', 'Payment of air time charges for cellphones', 'Shipment of mail bags to France', 'supply of fresh water', 'potted plants', 'transport', 'toner cartridge', etc. By no stretch of imagination these services provided by the Appellant can be considered as service in connection with the 'ship's husbandry or dispatch and the rendering of administrative work related thereto', as the statutory definition....
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....remuneration/commission. The relevant paras of the said order is reproduced as under:- "5. In accepting the case of the respondent/assessee, the Customs, Excise and Service Tax Appellate Tribunal referred to the decision rendered by the Tribunal in the case of Sri Sastha Agencies Pvt Ltd., v. Asst. Commissioner reported in 2007 (6) S.T.R. 185 (Tri.-Bang.), holding that no element other than remuneration received by a Clearing & Forwarding agent from their principal was to be included in the taxable value of the service. Thus, the Tribunal allowed the appeal. 6. Aggrieved by this, the present appeal has been preferred by the Revenue. Learned Standing counsel appearing for the Revenue submitted that as per the provisions of Rule 6(8) of Service Tax Rules, 1994, the value of taxable service in relation to the services provided by the Clearing and Forwarding Agent to the client for rendering services of Clearing and Forwarding operations, in any manner, shall be deemed to be the gross amount of remuneration or commission (by whatever name called) paid to such agent by the client, engaging such agent. He further submitted that considering the charges collected towards freight, labou....