TaxTMI 
TaxTMI 
2023 (7) TMI 546
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....70 of the Finance Act. 2. Service Tax Appeal No. 52621 of 2022 has been filed by the Commissioner Central Goods and Service Tax (CGST) the department claiming the following relieves in regard to the aforesaid order dated 18.11.2021 passed by the Commissioner: "A. Whether the Order-in-Original No. 41-42/Commr/Delhi East/AP/2021 dated 18.11.2021 passed by the Commissioner, CX & GST, Delhi East in the case of M/s Tiger Logistics (India) Limited [earlier known as Tiger Logistics (India) Private Limited], 804-A-807, 8th floor, 60, Skylark Building, Nehru Place, New Delhi-110019, was legally correct & proper to the extent of: (i) Imposition of penalty under Section 78(1) of the Finance Act, 1994 which was not proposed in any of the Show Cause Notices. (ii) Non-imposition of penalty under Section 76 of the Finance Act, 1994 which was proposed in both the Show Cause Notices. B. Whether by an order passed under sub-Section (7) of Section 86 of the Finance Act, 1994 the Hon'ble Tribunal should modify the aforesaid order; and C. Any other order as may be deemed fit and proper by the Hon'ble CESTAT, under the circumstances of the case, in furtherance of the objectives of ju....
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....ing the period 01.03.2015 to 31.03.2017 after mentioning that the legal provisions regarding the issues had been discussed in detail in the show cause notice dated 23.04.2015 issued by the Principal Commissioner. The latter Statement of Demand proposed a demand of service tax amounting to Rs. 3,16,09,047/- for the taxable services rendered by the appellant for the period 01.04.2017 to 30.06.2017. This Statement of Demand also mentioned that the legal provisions on the issues had been discussed in detail in the earlier show cause notice dated 23.04.2015 issued by the Principal Commissioner. 8. It would, therefore, be appropriate to refer to the show cause notice dated 23.04.2015 issued by the Principal Commissioner containing reasons for proposing service tax under various heads for the period October 2009 to February 2015. They are: S. No. Liability on account of 1. Income/Mark up earned on Sea freight (01.10.2009 to 28.02.2015) 2. Expenditure incurred on Legal Services and Rent-a-Cab Service (01.07.2012 to 28.02.2015) 3. Brokerage (BAS), Sundry others Charges, Forklift Charges, Fumigation Charges (CHA) (01.10.2009 to 28.02.2015) 4. Reversal of Credit in respect of commo....
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....uring investigation, is hereby appropriate against the said interest liability. (iv) I impose penalty under Section 78 (1) of the Finance Act, 1994 equal to hundred percent of the amount of service Tax confirmed for the period up to 07.04.2011 and penalty equal to fifty percent of the service tax confirmed for the period 08.04.2011 to 28.02.2015 on M/s Tiger Logistics (India) Pvt. Ltd. under first proviso to section 78(1) of the Act ibid However, as provided in second proviso to Section 78 ibid, if they pay the amount of Service Tax confirmed as above along with interest thereon, within thirty days from the communication of this order, the amount of penalty shall be twenty-five per cent of the service tax so determined. The benefit of reduced penalty shall, however, be available to the Noticee only if the amount of such reduced penalty is also paid within such period. (v) I refrain from imposing penalty on the Noticee under Section 76 of the Finance Act, 1994; (vi) I hereby impose penalty of Rs 10,000 each on the Noticee under the provisions of section 77(1) (a), and section 77(2) of the Finance Act, 1994." 10. This order was assailed by the appellant before the Tribunal and....
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....l. 14. In Marinetrans India Pvt. Ltd. vs. CST, Hyderabad-ST 2020 (33) G.S.T.L. 241 (Tri.-Hyd.), the Division Bench held after considering the Circular dated 12.08.2016 issued by the Central Board of Excise and Customs that buying and selling space on ships does not amount to rendering a service and any profit or income earned through such transactions would not be leviable to service tax. The relevant portions of the order passed by the Tribunal is reproduced below: "6. We have considered the arguments on both sides and perused the records. It is not in dispute that the appellant herein is purchasing the space from the shipping lines and then is selling the same to exporters. It is the case of the Revenue that this amounts to acting as an intermediary for helping the business of the shipping lines and therefore they are liable to pay service tax on business auxiliary services on the profit which they receive. It is the case of the appellant that this is a deal on principal to principal basis between them and the shipping lines and again between the exporters and them. They are not acting as an agent. They could purchase the space for a lower price and sell it at a higher price a....
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....en 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." 7. 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 undisputedly the case here. We, further, find that in an identical case, in the case of Phoenix International Freight Service Pvt. Ltd. (supra) the Tribunal has held that buying and selling space on ships does not amount to rendering a service and any profit or income earned through such transactions is not leviable to service tax. We find no reason to deviate from this view taken by the Tribunal which view is also supported by the C.B.E. & C. circular cited above. In conclusion, the demand of service tax, interest and penalties are liable to be set aside and we do so." ( emphasis supplied ) 15. In Bhatia Shipping (P) Limited vs. Commissioner of Service Tax-I, Mumbai 2022 136 taxmann.com 407 (Mumbai-CESTAT), the Division Bench followed the earlier Division Benches and observed as follows: "....