AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 192
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....warding and other allied activities as that of booking of container/air cargo with various shipping lines/airlines for their customers i.e. exporters/importers and is collecting charges from their customers towards Terminal Handling, Loading/unloading, inspection charges etc. The party is charging Service Tax on all the above charges under the category of 'Business Auxiliary Services', except for the mark-up on ocean freight as well as air freight. 2. During the verification of the records of the appellant the Department found that the appellant had not paid service tax on some of the income heads including excess value charged and collected over and above the ocean freight actually paid. With these observations Show Cause Notice bearing....
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....ers is actually the markup charges collected by the appellant, hence, is not against providing the service of business support as is alleged by the Department. Ld. Counsel has also mentioned that the issue of this appeal has already been decided vide catena of decisions. ld. Counsel had laid reliance upon following decisions:- (i) Final Order No. ST/A/52258/2017-CU (DB) Dt-07.03.2017 in appeal to ST/2644/2012-ST (DB), CESTAT, Delhi in Commissioner of service tax appeal Vs Karam Freight Movers (ii) Commissioner of Service Tax New Delhi Vs. Continental Carries 2017-TIOL-3964-CESTAT-DEL. (iii) Commissioner of Service Tax Chennai Vs Supply Chain Logistics Pvt. Ltd. - 2118-TIOL-3118-CESTAT-MAD. The departmental appeal ....
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....addressed in the decisions of this Tribunal itself specifically in the case of DHL Logistics (P) Ltd. vs. Commissioner of Service Tax, Mumbai 2017-TIOL-3894 CESTAT, Mumbai. It has been held as follows:- "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, there h....
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....rrier 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 purchased by them from the airline. This activities can by no stretch of imagination be considered as BAS as for any service to statute the BAS atleast 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 space. An....
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....that the appellants often even in the absence of shippers, contract for space or slots in vessels in anticipation of demand and as a procured 4 ST/471/2009-DB from shipping lines. The surplus earned by the respondent arising out of purchase and sale of purchase and sale of space and not by acting for client who has space or not on a vessel. It cannot be considered that the respondents are engaged in promoting or marketing the services of any "client." 9. We also observe that there has been a circular of the CBEC, the relevant para whereof is as follows:- "2.1 The freight forwarders may deal with the exporters as an agent of an airline/carrier/ocean liner, as one who merely acts as a sort of booking agent with no responsibility f....
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.... transportation of goods, from a place in India to a place outside India. He is bearing all the risk and liability for transportation. In such cases they are not covered under the category of intermediary, which by definition excludes a person who provides a service on his account. 3. It follows therefore that a freight forwarder, when acting as a principal, will not be liable to pay service tax when the destination of the goods is from a place in India to a place outside India." 10. It is evident from the C.B.E. & C. circular also that the Revenue was also of the view that service tax is payable when one acts as an intermediary and not as a trader dealing on principal to principal basis on their own account which is undisputedl....