TaxTMI 
TaxTMI 
2018 (8) TMI 2055
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....ts paid by the appellants to the shipping lines/airlines and the amounts recovered by the appellants from their customers (exporters/importers), is called the "mark-up". The department was of the view that this 'mark up' was for services provided by the appellants to their customers and was, therefore, liable to service tax under the category of "Support Services of Business or Commerce", covered under section 65(104c) of the Finance Act, 1994 r/w 65 (105). It is also alleged that after July, 2012, their services are not covered by any service, notified in the negative list, and is also not exempted, therefore, continues to be taxable. 4. Accordingly a show cause notice, dated 09.12.2014, was issued to the appellants demanding service tax of Rs. 98,27,702/- along with interest and penalty for the period 2008-09 to 2012-13. 5. The appellants filed reply to the show cause notice, as to why the demand was not sustainable. However, without appreciating the points raised by the appellants, the adjudicating authority i.e. Commissioner of Service Tax Delhi-II, vide his Order in Original dated 30.03.2015/31.03.2015, confirmed the full amount along with interest and also imposed penalties....
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....'Support Services of Business or Commerce' as defined in Section 65(104c) of the Finance Act,1994. It is submitted that support services are in the nature of outsourced services. The same cannot be said in respect of selling/trading of space in shipping lines/airlines. 9. Bulk (over 90%) of the shipments for which space was purchased and provided by the appellants to their customers, were food products (rice).These are exempt from Service Tax vide clause 20(i) of Mega Exemption Notification No: 25/2012-ST dated 20.06.2012. 10. In any case, the matter relates to interpretation of law for which extended time limit cannot be invoked. The normal time limit is 18 months from the 'relevant date' which is the due date of filing of the ST-3 returns. For the half year October 2012 to March, 2013 the date for filing the ST-3 returns was 25.04.2013. 18months from this date comes to 24.10.2014. Since the show cause notice has been issued on 09.12.2014, the whole demand is time barred. 11. For the same reason, penalty cannot be imposed on the appellants under Section 78 of the Finance Act, 1994. 12. The Ld. A.R. for the revenue reiterated the finding in the order in original. 13. Heard the....
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.... rendered for or to a client, that client has not been defined in the statute, that they do not receive payment from shipping lines, that they are not agents but intermediaries akin to ship brokers as held by the Tribunal in Interocean Shipping Co. v. Commissioner of Service Tax [2013 (30) S.T.R. 244 (Tri.-Delhi)], that even if the surplus were to be deemed as a discount the decision of the Tribunal in Group M. Media P. Ltd. v. Commissioner of Central Excise [2012-TIOL-804-CESTAT-MUM] would render this to be non-taxable, that a registered multi-modal transport operator is not an agent of either the shipper or the carrier. Learned Authorized Representative reiterated the findings in the impugned order and drew attention to the receipt of commission by the appellant from shipping lines. 6. We notice that the appellant has admitted to receiving commission from shipping lines on account of freight and discharge of tax liability on the same. However, we find no justification for fastening the same liability on all other receipts of the appellant. In Bax Global India Ltd. v. Commissioner of Service Tax, Bangalore [2008 (9) S.T.R. 412 (Tri.-Bang.)], the Tribunal held. '9 ... ... ... S....
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....rvice provider performing an activity for which consideration is received from the recipient of the service. A finding on these aspects is distinctly absent in the impugned order. 10. The original authority has proceeded on the assumption that there is only one payment and, that too, for freight charged by the shipping line. He has rejected the possibility of trading in space or slots on vessels by holding that trading in space or slots is a figment and freight is all that is transacted. This is a patent misconstruing of the usage of that expression. Freight, though used colloquially to describe all manner of carriage, is the nomenclature assigned to the consideration for space provided on a vessel for a particular voyage. Freight is charged by the entity that is in possession 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 cont....
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....ion 65(19) of Finance Act, 1994 will not address these independent principal-to-principal transactions of the appellant and, with the space so purchased being allocable only by the appellant, the shipping line fails in description as client whose services are promoted or marketed. 14. We, therefore, find no justification for sustaining of the demand and, accordingly, set aside the impugned order. Demands, with interest thereon, and penalties in both orders are set aside. Cross-objections filed by the department are also disposed of." 15.2 Commissioner Of Service Tax, New Delhi Vs Karam Freight Movers- [2017 (4) G.S.T.L. 215 (Tri. - Del.) wherein the Principal Bench at New Delhi held as Under :- "11. On the second issue regarding the service tax liability of the respondent under BAS, we find that the impugned order examined the issue in detail. It was recorded that the income earned by the respondent to be considered as taxable under any service category, should be shown to be in lieu of provision of a particular service. Mere sale and purchase of cargo space and earning profit in the process is not a taxable activity under Finance Act, 1994. We are in agreement with the findin....