2017 (11) TMI 1109

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....us activities as Customs House Agent and Freight Forwarder. The dispute in the present appeal relates to their tax liability under the category of 'Business Auxiliary Service' for the period 01.07.2003 to 31.03.2007. As freight forwarder, the assessee-Respondents earned income of two types; one relating to profit on selling the space in the aircraft which they have purchased earlier and later made available to various cargo shippers, and another in the form of commission received from the airlines based on the business they provided to these airlines in transport of cargo. The Revenue sought to tax both the incomes under 'Business Auxiliary Services' by treating them as consideration for promoting the services of another person. The origina....

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....r the category of 'Business Auxiliary Service' has already come up for consideration before the Tribunal in the above mentioned cases and the Tribunal in the case of DHL Logistics (P) Ltd. (supra) has observed that : "4.2. Demand has been made on service tax under the head of Business Auxiliary Service for the revenue earned as freight rebate. Ld. Counsel has argued that the income is generated as a result of appellants buying cargo space in bulk and selling the same to foreign shipper, he argued that various essential activity in which there is no third party involved except the appellant and the carriers. In these circumstances demand under Business Auxiliary Service cannot be sustain. It is argued that for sustaining demand under BAS,....

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....on carrier from the airline directly to the exporters without themselves purchasing the space then it could have been considered as an activity involving promotion of sales. In the instant case the appellant are directly buying themselves and thereafter selling the same to the exporters. In this activity they are receiving incentive and commission based on the total space purchase by them from the airline. This activities can be no stretch of imagination by considered as BAS as for any service to statute the BAS at least three parties should be involved in the transaction namely the service provider, service recipient and the client. In the instant case there are only two parties in the transaction, the seller of space and the buyer of spac....