TaxTMI 
TaxTMI 
2021 (9) TMI 500
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....ation April 2003 to October 2005 April 2006 to September 2008 NIL NIL 4. Demand (In Rs.) 79,79,919/-C&F Agent 5,53,604/- Steamer Agent 3,58,63,971 4,54,33,422 4,48,76,032 1,97,74,117 5. 15,44,81,065 6. Amounts paid & appropriated (In Rs.) 6,99,811/-towards demand 1,18,895- towards interest - - - - 7. Amounts paid as pre-deposit (In Rs.) 10,00,000 35,86,397 45,43,342 44,87,603 15,00,000 8. Interest As applicable under Section 75 of the Finance Act, 1994 9. Penalty Section 76 of the Finance Act, 1994 Section 77 of the Finance Act, 1994 Section 78 of the Finance Act, 1994 Section 76 of the Finance Act, 1994 Section 77 of the Finance Act, 1994 Section 77 of the Finance Act, 1994 Section 78 of the Finance Act, 1994 10. Order-in-Original 12/2008 dated 5.05.2008 25/2011 dated 23.02.2011 13/2012 dated 11.01.2013 1/2012 dated 28.09.2012 32/2013-14 dated 6.03.2014 2. The issues which fall for consideration in these appeals are as follows: a) Is the appellant liable to....
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.... for the following: i. Ocean Freight ii. Halting Charges iii. Fumigation Charges iv. Customs Documentation charges v. Bill of lading charges vi. Transportation charges vii. Service charges, etc. c) For Ocean Freight and other related services of other agencies, namely M/s. Airsea Forwarders, Bangalore, M/s. Rosemount Shipping (India) Pvt. Ltd., Bangalore etc., is availed, who in turn raise an invoice for such services provided, on the assessee. d) The assessee raises a consolidated bill, which includes ocean freight and other charges on the shipper. e) Though the prime activities undertaken by the assessee relate to that of a freight forwarder, they also arrange the incidental / ancillary services through other agencies. For example, the assessee is not a CHA but gets the work done through other licensed CHA, and the assessee not being a shipping agent or shipping liners, gets the materials shipped through other agents. f) Scrutiny of the bills/invoices revealed that the assessee did not charge ocean freight, CHA charges etc., on actual basis. Extra realization had been affected witho....
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....ent / contract or it could be on case-to-case basis in which the shipping line is engaged after the appellant gets confirmation from the customer to move their goods. The appellant issues its own documents for Ocean freight and assumes full responsibility and liability towards the customer. In case of export, the appellant gets paid after it issues its own Bill of Lading (BL) to the client depending upon the payment terms agreed. In case of imports, appellant gets paid after it issues delivery order to its customers upon arrival of goods at the port of discharge as per the terms agreed with the customers. Appellant does not have any warehouse and the goods are always held in the ICDs or CFS pending clearances. The appellant has been raising bills upon the customers for their services under the following heads: (i) Ocean Freight (ii) Halting Charges (iii) Fumigation Charges (iv) Customs Documentation charges (v) Bill of lading charges (vi) Transportation charges (vii) Service charges, etc. 6. Under dispute is the amounts which they have collected towards Ocean Freight from the customers which was in many cases higher ....
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....oss be called as service rendered to their customers. This service is not a part of the Clearing and Forwarding Agent Service rendered by the appellant, for which they are collecting service charges and have undisputedly paid service tax on them. 9. As far as the demand on the service tax on the alleged "Steamer Agent Service" in appeal No.ST/263/2008 is concerned, it is the case of the appellant that during the disputed period they had received some commission from the agents of the shipping lines who are authorized by the shipping lines to book the cargo for a commission. The commission or brokerage which they receive from the agents cannot be called as Steamer agent service because no service is being rendered by them to the shipping lines at all. Steamer Agent and Steamer agent Service are defined in Section 65(100) and section 65 (105) (i) as follows: Section 65(100) "Steamer Agent" means any person who undertakes, either directly or indirectly,- (i) to perform any service in connection with the ship's husbandry or dispatch including the rendering of administrative work related thereto; or (ii) to book, advertise or canvass for cargo for ....
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....), [(zzzzj), (zzzzk), (zzzzl), [(zzzzm), (zzzzn), (zzzzo), (zzzzp),(zzzzq), (zzzzr), (zzzzs), (zzzzt), (zzzzu), (zzzzv) (zzzzv) and (zzzzw)] of clause (105) of section 65 and collected in such manner as may be prescribed. Therefore, for service tax to be charged, there must be a taxable service as defined in any of the clauses of section 65 (105) of the Act according to which (105) " taxable service" means any service provided or to be provided,- (a) (b) .. (i) 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;' (j) 'to a client, by a clearing and forwarding agent in relation to clearing and forwarding operations, in any manner"; The first issue identified by us to be decided in this case is "Is the appellant liable to discharge service tax on the difference between the amounts charged by it from its clients towards Ocean Freight and the amounts paid by it to the Shipping line towards Ocean Freight under the head of 'Clearing and Forwarding Agency Serv....
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....t. 15. The nature of the transaction is also clear from the fact that there are cases on record where the appellant had booked the space for higher amount on the ship but due to market conditions, had to sell the space to its customers at a lower price incurring loss. Therefore, in our considered view, the profits gained by the appellant by buying space on ships at lower price and selling at a higher price to the customers cannot by any stretch of imagination be called "Clearing and Forwarding Agent Service". No service tax can be charged on this amount. On an identical question, in the case of Seamax Logistics Ltd. vs Commissioner of Central Excise and Service Tax, Tirunelveli, reported in 2018 (7) TMI 262-CESTAT Chennai has held that no service tax is chargeable on the difference between the ocean freight collected from the clients and the ocean freight paid to the shipping lines. 16. The second question which we have framed is whether in Service Tax Appeal No.263 of 2008, the appellant is liable to discharge service the on the amounts which it received from the agents of the Shipping Line for booking cargos under the head 'Steamer Agency Service' or not. It is undisputed t....