TaxTMI 
TaxTMI 
2023 (6) TMI 703
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....r, and obtained centralized Service Tax registration for courier service. 2.2 During the course of audit, the Department has noticed that the appellant had not paid Service Tax on certain income accounted in their Trial Balance under the head "Courier Income - Non-Tax". On enquiry, the appellant had informed that they rendered services to other couriers viz. M/s. Flyer Express, M/s. City Courier, M/s. Professional International Couriers, M/s. XPS Couriers, etc., and received charges for their services. 3. Entertaining a doubt that the services rendered by the appellant were classifiable under business support service with effect from 01.05.2006, a Show Cause Notice C. No. IV/9/93/2008-STC.Adj. dated 03.04.2008 was issued proposing demand of Service Tax of Rs.59,20,783/- for the period from 01.05.2006 to 22.08.2007, with interest under Section 75 of the Finance Act, 1994, besides proposals to impose penalty under Sections 76 and 78 of the Act. 4.1 After following due process of the law, the Commissioner of Service Tax, Chennai classified the impugned service rendered by the appellant under business support service and confirmed the entire demand of Service Tax with interest besid....
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.... disposed of in the above terms." 5.1 In terms of the above directions of the Tribunal, the adjudicating authority, in de novo adjudication, has examined the assessee's claim as to whether they acted as a courier agency and whether Service Tax was paid on the value of sub-contracted portion. After examining the legal provisions relating to courier agency service, as given in the Finance Act, and also on the basis of the assessee's claim that they acted as a co-loader basing on two letters issued by M/s. United Business Xpress India Ltd., New Delhi and M/s. Professional International Couriers Pvt. Ltd., it was concluded that the services rendered by the assessee would not be classifiable under co-loader service, but would be coming under business support service which was brought under the Service Tax Net with effect from 01.05.2006 relying on the Board's clarification vide F. No. 137/131/2007-CX.4 dated 12.12.2007. 5.2 The learned adjudicating authority has also recorded a finding that the appellant though claimed as a co-loader, had not produced any contract or agreement or terms of arrangement regarding the exact service provided as co-loader except producing two letters issued....
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....ayable by the main contractor. It was also held that the appellant has failed to produce any evidence in support of the contention that the main courier had discharged their Service Tax liability. 6.1 In the written submissions, the appellant has pleaded that they were given courier business by M/s. EZ Worldwide Express, New Jersey, USA for whom they picked the courier parcels in India and sent to USA to be delivered by them to the consignees and to collect the charges on 'cash on delivery' basis. It has been submitted that as Chennai did not have a courier terminal, they engaged the services of United Business Xpress (I) P Ltd., for sending the parcels to USA to be delivered to M/s. EZ Worldwide Express to collect the money in foreign exchange and to remit the amount due to them by way of credit notes; they also represented the other courier companies that did not have operations in the areas operated by them, which is known as co-loading operations and did not pay the tax on the export services and on the income from co-loading operations having been guided by the Board Circular F.No.341/43/96-TRU dtd. 31.10.1996. It is further submitted that the transactions are related to co-l....
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....by the audit based on the records maintained by the assessee, no suppression can be alleged and extended time limit cannot be invoked. 6.5. The appellant further submitted that the issue concerned only interpretation of Circulars and Clarifications issued by the C.B.E.C. from time to time and their transactions were duly reported and reflected in their books of account. Relying on the decisions of the Tribunal in the cases of M/s. King Fisher Airlines Ltd. Vs. Commissioner of Service Tax, Mumbai-I 2015 (40) S.T.R. 1159 (Tri. Mum.)] wherein it was observed that the Airlines had duly disclosed the receipts from the passengers and M/s. Fortune Park Hotels Ltd. v. Commissioner of Service Tax, Delhi [2017 (49) S.T.R. 567 (Tri. Del.)], it is submitted by the appellant that no suppression could be alleged. It is also pleaded that the issue is one of interpretation of the taxing statue and as such, there being no element of fraud or suppression, the extended period is not invokable; the ratio of the decision of the Ahmedabad Bench of the CESTAT in the case of M/s. Shanti Construction Company v. Commissioner of Central Excise and Service Tax, Gujarat [2023-TIOL-223-CESTAT-AHM] was also rel....
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.... in relation to support services of business or commerce of other couriers. 8.2 She has argued that the appellant had stated in the initial round of dispute before the Tribunal that the main couriers had paid Service Tax whereas during the de novo proceedings, a new plea was taken that the services were exported and no Service Tax was payable, which is self-contradictory. 8.3 She also submitted that the appellant has failed to produce any documents before the adjudicating authority to prove their claim that in terms of the agreement entered into with M/s. EZ Worldwide Express, New Jersey, who wanted to get samples from the local suppliers, the charges for the courier activity were reimbursed. 8.4.1 She has further submitted that the letter dated 11.10.2010 from M/s. Professional International Couriers Pvt. Ltd. produced before the CESTAT and the letter dated 01.11.2012 by the same courier produced during the de novo proceedings are contradictory in nature. It is seen from the first letter that the appellants are engaged by the main courier to deliver documents on their behalf and service charges are paid. It was claimed therein that Service Tax has been discharged on the amount ....
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....has found fault with the appellant's contention that the "Circular issued on 23.08.2007 has withdrawn the earlier instructions amongst others was not correct." 8.8 She prayed that the appeal filed by the party may be dismissed. 9. The issue that is to be decided in this appeal is: whether the services rendered by the appellant are that of a co-loader / courier agency or whether these are to be classified under "support services of business or commerce". 9.1 The connected issues are: - * Whether the principal courier/s have discharged the Service Tax on the portion sub-contracted to the appellant. * Whether the services rendered by the appellant could be treated as export of service or not; and * Whether, in the facts and circumstances of the present case, it is justified to invoke the extended period of limitation. 10. For ease of reference, the definitions of "courier agency" and "support services of business or commerce" as per Sections 65(33) and 65(104c) of the Finance Act, 1994 respectively are extracted below: - Courier agency: "(33) "courier agency" means any person engaged in the door-to-door transportation of time-sensitive documents, goods or articles utilisi....
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....the year 1996, the relevant portion of which is extracted below: - "F. No. 341/43/96-TRU dated 31-10-1996 ..... . . . 15. It has been pointed out that in some cases one courier agency, who undertakes to deliver the documents, goods or articles received from customers, utilises the services of another company for in-transit movement of such documents etc. from one point to another. These are, technically, called co-loaders. The co-loader undertakes to transport the documents, goods or articles on behalf of the courier agency and charges the courier agency for such services. A question has been raised whether under these circumstances the co-loaders are also liable to pay service tax. 16. In this context, it is clarified that co-loaders provide service to the courier agencies as such. They do not provide directly any service to the customer who gives the documents, goods or articles to the courier agency for their delivery to the consignee. What is chargeable to service tax is the service provided by courier agency to the customer. In this case, the courier agency being not a customer as such, the service provided by co-loader to the courier agency is not chargeable to ....
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....sey, USA. In terms of the above agreement, the appellant would be reimbursed all reasonable out of pocket expenses incurred by the dispatcher of documents in connection with the collection and dispatch of documents from the various clients of the company located in India. It has also been stated therein that since it is only a reimbursement of expenses incurred in connection with the service, there is no Service Tax or Tax Deduction at Source on the said expenses. 14.2 The relevant clauses of the above agreement entered into with M/s. EZ Worldwide Express is reproduced below: - 14.3 However, the issue in this appeal is relating to taxability of the services rendered to M/s. United Business Xpress India Pvt. Ltd., New Delhi and M/s. Professional International Couriers Pvt. Ltd. Nothing has been brought on record relating to the rendering of any service or receipt of payment from M/s. EZ Worldwide Express. Though an agreement has been entered into between M/s. U.B. Xpress (South) Pvt. Ltd. (the appellant herein) and the overseas courier company M/s. EZ Worldwide Express, New Jersey, the appellant has failed to produce any record relating to the transactions and so, the purpose of b....
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....rovided further that for the purposes of this sub-rule, any taxable services provided shall be treated as export of services only if- (a) Such service is delivered outside India and used in business or for any other purpose outside India; and (b) Payment for such service provided is received by the service provider in convertible foreign exchange". 17.2 In terms of the above Rule with effect from 15.06.2005, the appellant would be liable to pay the Service Tax, as the service would be considered as export of service only if payment is received in convertible foreign currency. Apart from the letters issued by M/s. United Business Xpress India Pvt. Ltd., New Delhi and M/s. Professional International Couriers Pvt. Ltd. (reproduced at paragraph 11 above), the appellant could not produce any document like FIRC, to link his services to the export of courier parcels. As such, we hold that the appellant is liable to pay the required tax on the consideration received from these two courier agencies. 18. The appellant's reliance on the judgement of the Tribunal in the case of M/s. United Business Xpress India P. Ltd. v. Commissioner of Service Tax, Delhi [2017 (48) S.T.R. 270 (Tri. - D....