TaxTMI 
TaxTMI 
2018 (8) TMI 1108
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....of convenience. 2. During the course of audit of accounts of the assessee, it was noticed that they were providing various services related to freight forwarding. During the course of providing such services, the assessee made booking of space for the cargo and thus procured cargo space from the shipping lines at specified agreed rates. The assessee solicit cargo from their clients and used the space booked for forwarding the cargo of such clients. For this service, they collected higher freight charges from their clients than the amount paid by them to the shipping lines. Thus, by booking the space for cargo and making available the same to the clients/actual user of space, the assessee charged the mark up on the amount paid to the ship....
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....es the assessee would make gain and sometimes the transaction would be loss depending upon the market conditions involving in the attendant business risk. The department has treated these transactions as 'managing distribution and logistics' which would fall under Business Auxiliary Service for the period upto 30/4/2006 and thereafter under Business Support Services with effect from 1/5/2006. He adverted to the decisions in the case of Greenwich Meridian Logistics (I) Pvt. Ltd. vs Commr. Of S.T., Mumbai 2016 (43) S.T.R.215 (Tri. - Mumbai) and submitted that the Tribunal has analysed the very same activity and the issue of its' taxability wherein the issue stands covered in favour of assessee. Similarly in the case of Phoenix International F....
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....icable to the facts of the case, as the activity of the appellants would fall under managing distribution and logistics services. 5. Heard both sides. 6. The activity carried out by the appellant, as stated in the show cause notice is that 'the assessee books space in cargo and procures cargo space from shipping lines at specified agreed rates. The assessee procures cargo from their clients and used the space in forwarding the cargo to their clients. For this they collect higher freight charges from their clients, than the amount paid by them to the shipping lines. Thus by booking a space for cargo and making available the same to the clients/actual user of space, they charged the mark up on the amount paid to the shipping lines'. ....
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....and/or, as and when the bills is raised, and sells the same to their customers at a profit. The appellant is not rendering any service either to the shipping line or to its customers, more so, under business auxiliary service. This view of ours is fortified by the decision of this very same bench in the case of Greenwich Meridian Logistics (India) Pvt. Ltd. (supra) and by a Coordinate Bench of this Tribunal in the case of DHL Lemuir Logistics Pvt. Ltd. (supra). Since the issue involved in this case is already decided against the Revenue, respectfully following the same, we set aside the impugned orders in both the appeals as regards the demand raised and confirmed under this issue. Airline incentive income : 6.2 On perusal....
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....n of space on a vessel from an entity that requires the space for carriage of cargo. 11. Slots may be contracted for by the shipper or its agent with the shipping line through the steamer agent. Implicit is a uni-directional flow of consideration because the space belongs to the shipping line. Steamer agent or agent of shipper may earn commission in such a transaction. Leaving that situation aside, the contention of the appellant is that it is a 'multi-modal transport operator' which entails a statutorily assigned role in cross-border logistics. According to Section 2 of the Multi-modal Transportation of Goods Act, 1993. (m) "multimodal transport operator" means any person who - (i) concludes a multimodal transpor....
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....-principal transaction and the freight charges are consideration for space procured from shipping line. Correspondingly, allotment of procured space to shippers at negotiated rates within the total consideration in a multi-modal transportation contract with a consignor is another distinct principal-to-principal transaction. We, therefore, find that freight is paid to the shipping line and freight is collected from client-shippers in two independent transactions." 13. The notional surplus earned thereby arises from purchase and sale of space and not by acting for a client who has space or slot on a vessel. Section 65 (19) of Finance Act, 1994 will not address these independent principal-to-principal transactions of the appellant and....