TaxTMI 
TaxTMI 
2023 (8) TMI 539
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....been filed by the Department to assail that part of the order dated 22.05.2018 by which the Commissioner has dropped the demand of Rs. 22,12,87,459/-. 4. The details of the aforesaid three appeals are as follows:- Appeal No. ST/52935/2016 (by the Appellant) ST/53001/2018 (by the Appellant) ST/53002/2018 (by the Department) Order-in-Original 10.08.2016 22.05.2018 22.05.2018 Show cause notice 1. 10.10.2014 (for the period 2009-10 to 2012 -13) 2. 26.08.2015 (for the period 2013-2014) 11.04.2016 (for the period 2014-2015) 11.04.2016 (for the period 2014-2015) Tax demand in dispute For the period 2009-10 to 2012-13 is Rs. 15,34,338 (out of this Rs. 3,25,820, which was paid before issuance of show cause notice along with interest, has been appropriated) For the period 2013-2014 is Rs. 6,03,465/- [Total Demand= Rs. 21,37,803/-] Rs. 10,60,782/- Rs. 22,12,87,459/- 5. The appellant is a multi-modal transport operator under Multi-Modal Goods Transport Act, 1993 and is having a license/registration dated 08.03.2007 issued by Directorate General of Shipping. The appellant is inter-alia engaged in providing (i) customs clearan....
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....14 and 11.04.2016 were adjudicated by a common order dated 10.08.2016, whereby demand of Rs. 21,37,803 with respect to certain issues was confirmed and rest of the proposed demand was dropped. 10. The third show cause notice dated 11.04.2016 was adjudicated by an order dated 22.05.2018, whereby demand of Rs. 10,60,782/- was confirmed and demand of Rs. 22,12,87,459/- was dropped. 11. The department has filed an appeal against the findings recorded by the Commissioner for dropping the aforesaid demand. 12. Shri B.L. Narasimhan, learned counsel for the appellant and Shri Rohit Issar learned authorised representative of the department made submissions on the following issues: (i) Non-payment of service tax on mark-up in freight income (ocean freight) confirmed in both the orders and assailed in the two appeals filed by the appellant; (ii) Non-payment of service tax on commission income under category of BAS confirmed in the order dated 10.08.2016 and assailed in Service Tax Appeal No. 52935 of 2016 appeal filed by the appellant; (iii) Non-payment of service tax on legal expenses and on difference in figures in ST-3 confirmed in order dated 10.08.2016....
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.... received for such activity is a profit earned from sale, which cannot be attributed to be consideration for a service. Thus, as the activity is not a service, it cannot be subjected to levy of service tax. 16. In this connection, reference can be made to the decision of the Tribunal in M/s. Tiger Logistics (India) Ltd. vs. Commissioner of Service Tax-II, Delhi [2022 (2) TMI 455-CESTAT New Delhi] and the relevant portion of the decision is reproduced below: "7. We have considered the arguments on both sides and perused the records. For a service tax to be leviable: a) a service must have been rendered; b) the service so rendered must be a taxable service within the meaning of section 65(105) of Chapter V of the Finance Act, 1994; and c) a consideration must have been paid for that service. 8. If a service is not rendered at all, no service tax can be levied regardless of the fact that an amount has been received. Similarly, if the service so rendered does not squarely fall within the definition of „taxable service„ under section 65 (105), no service tax can be levied. Even if it is doubtful whether the service is taxable o....
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.... exporter. Invoices were raised on exporters. 3. The freight forwarder is undertaking all the legal responsibility for transportation of the goods and undertakes all the attendant risks. The appellant issued Bill of Lading in its own name and thus, all risk of transportation is borne by the appellant. Further, there may be a situation where cargo space is sold at lesser price. Thus, loss risk is borne by the appellant. 20. In terms of paragraph 3 of the Circular dated 12.08.2016, the demand is liable to be set aside as the destination of goods are outside India in terms of rule 10 of the Place of Provision of Service Rules, 2012. For imports, the transaction would be non-taxable in terms of section 66D (ii)(p) of the Finance Act. Demand of service tax on Commission income under BAS 21. As regards non-payment of service tax on commission income under category of business auxiliary services [BAS], the finding recorded by the Commissioner is as follows: (i) The assessee is acting on behalf of the shipping lines and is selling cargo space of such shipping lines in lieu of which amount is also collected by the assessee from the client. Thus, the asses....
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....part of demand in show cause notice dated 10.10.2014; (ii) Custom duty is a statutory levy and further, same is just a reimbursement from client. Thus, it is not taxable; (iii) Components like BAF and CAF are part of ocean freight and are merely paid to the shipping lines which are later reimbursed from the client. Thus, they cannot be taxed; and (iv) A Chartered Accountant certificate has been provided by the appellant supporting that the aforesaid amount has been recovered from clients without any value addition. Thus, the assessee would be to the eligible for benefit of pure agent under rule 5 of the Service Tax (Determination of Value) Rules, 2006. Further, no facts have been changed since issuance of the first show cause notice. Such amounts are also in nature of reimbursements and thus, not taxable. 26. The demand has been rightly dropped in the order dated 22.05.2018. By letters dated 01.01.2016 and 15.01.2016, the appellant was asked to provide details of the value shown as non-taxable under financial data summary sheet earned for activities covered under BSS. In the third show cause notice dated 11.04.2016, which was issued for period 2014-15 ....