TaxTMI 
TaxTMI 
2023 (12) TMI 527
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....ight for the above, known as the ocean freight and air freight respectively, are fixed / agreed between the appellant and the shipping companies based on the destination and the size of the container. The export / import cargo may be either FCL (Full Container Load) or LCL (Less than Container Load). 2.2 The appellant receives booking orders from their customers for export / import of cargo through e-mail or through phone. In the case of FCL, the appellant books a container from the liners shipping companies and places the container in the CFS. The goods meant for export are received at the CFS and the export cargo is unloaded at the CFS. After Customs examination of the goods, the same is loaded into the said container and sealed by the Customs authorities. The container is then moved to the port and the shipping companies will make arrangements for the transhipment of the export cargo to the destination by ship. After sailing of the vessel, the appellant collects the Bill of Lading from the shipping companies by paying freight. In the case of LCL, the export goods are placed in the CFS after Customs formalities. Depending on the availability of the container and vessel, the good....
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....ellant. The appellant is registered as Clearing and Forwarding agent and for providing Cargo Handling Services. It is submitted that ocean freight in respect of both export and import does not attract Service Tax for the disputed period. Under Section 66D(p)(i) of the Finance Act, 1994, (prior to 01.06.2016) services by way of transportation of goods by an aircraft or vessel from a place outside India up to the customs station of clearance in India falls under negative list and hence the same falls outside the ambit of Service Tax. Further, in terms of Rule 10 of the Place of Provision of Services Rules, 2012, the place of provision of service of transportation of goods shall be the destination of the goods. In case of export shipments, as the destination is outside India, the place of provision of service is outside India and hence no Service Tax is payable. 3.2 The said Section 66D(p)(i) of the Finance Act, 1994, was omitted from the negative list with effect from 01.06.2016 and hence made taxable. In the present case, the demand is for the period from April 2015 to March 2017. In appeal Nos. ST/42511/2017 and ST/41626/2019, the demand is on ocean freight for both export and imp....
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....ng of service. The demand of Service Tax on mark-up / differential of ocean freight was set aside. The relevant Paragraphs reads as under:- "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 or not, the benefit of doubt in respect of the charging section goes in favour of the assessee and against the revenue. The third important element is the consideration for the service. Any amount received must be for the service and it cannot be for some other purpose. For instance, if any amount is received towards any compensation, such amount cannot be taxed. 9.....
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....rom trading space on ships and the reimbursements of the container detention charges and the toll taxes which it paid on behalf of its clients and got reimbursed. We have already found above that no service tax is leviable on these receipts." 6.2 In the case of Direct Logistics India Pvt. Ltd. Vs. Commissioner of Service Tax, Bangalore [2021 (55) GSTL 344 (Tri.-Bang.)], the demand was raised on the mark-up received on the difference between the freight charges collected and paid to the shipping liners. The relevant Paragraphs reads as under:- "14. It is undisputed that the appellant is registered with service tax department for "Clearing and Forwarding Agent Service" and has been paying service tax on the service charges. What is exigible to service tax under Section 65(105)(j) is any service provided or to be provided to a client by a Clearing and Forwarding Agent in relation to clearing and forwarding operations in any manner. Transport of goods is distinct from clearing and forwarding operations. In this case, the appellant is not only providing clearing and forwarding service but is also providing transport on its own account to its clients by purchasing freight space on the....