TaxTMI 
TaxTMI 
2024 (6) TMI 683
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....that the appellant has to pay service tax on such air freight and ocean freight charges collected by them for the period prior to 01.07.2012 under Business Support Service and for the period after 01.07.2012 in terms of Section 65B (44) of the Finance Act, 1994. After due process of law, the original authority confirmed the demand of service tax, interest and imposed penalties. On appeal, the Commissioner (Appeals) upheld the same. Hence this appeal. 2. Ld. Counsel Shri N. Prasad appeared and argued for the appellant. It is submitted that appellant is a private limited company incorporated under the Companies Act, 1956. The Appellant is inter alia involved in the activity of rendition of International Freight Forwarding and transportation of cargo by air and sea. The Appellant is engaged in the business of booking air and sea cargo by appointing International Air Transport Association (hereinafter referred to as the "IATA") and Multimodal Transport Operator (hereinafter referred to as the "MTO") agents, clearing and forwarding/freight consolidating, logistics management service, warehousing and distribution service which includes warehousing, inventory management, sorting and grad....
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.... Customers and also liable for any damages if any, that occurs during the shipment to the ultimate recipient/buyer of its customer. Therefore, the Appellant, undoubtedly has acted in the "principal" capacity to all its customers. While so, for the period between October, 2011 to September, 2016 (hereinafter referred to as the "disputed period"), the Show Cause Notice SCN No.11/2017(ADC) dated 20th April, 2017 had alleged non-payment of service tax on the "Profit/mark-up" earned by the Appellant on the buying and selling of ocean space under the head "Business Support Service" falling under Section 65(104c) of the Finance Act, 1994 for the period upto 30th June, 2012 and under "taxable service" for the period from 1st July, 2012, apart from the proposal to invoke extended period of limitation and thereby imposing consequential penalty under Section 78 of the Act and also imposition of interest under Section 75 of the Act. A reply dated 19th May, 2017 was also filed by the Appellant refuting the aforesaid allegations. 2.2 It is submitted that the order of the adjudicating authority is erroneous and opposed to the facts and circumstances of the case of the Appellant. 2.3 The Appella....
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....nition, the principle of noscitur-e-socis will apply. Decision in Bangalore Water Supply and Sewerage Board Vs Rajappa-AIR 1978 SC 548 was relied by the Ld. Counsel. 2.8 The Appellant submits that its business was that of a freight forwarder which involved the buying and selling of cargo space. This activity was only trading in cargo space rather than "Managing, Distribution and Logistics". 2.9 The Appellant submits that the activity of purchase and sale of cargo space in a liner is not a taxable service. The demand pertains to profit on sale of cargo space i.e., sale of freight which is not taxable under the Act. 2.10 The Appellant submits that it is settled law that in the absence of a clear charging provision, the activity cannot be brought to tax. Decision in Commissioner of Wealth Tax, Gujarat-III, Ahmedabad Vs Ellis Bridge Gymkhana-(1998) 1 SCC 384 was relied. 2.11 The Appellant submits that the whole activity is outside the purview of service tax on account of the Place of Provision of Service Rules, 2012. What is sought to be taxed in the present case is the margin earned on the ocean freight cargo- exports (air and sea). 2.12 The Appellant submits that in terms of the....
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...., Rajkot 2020 (2) TMI 282 - (Tri.) - AHMD- at para 4 and 5. iii) Nilja Shipping Pvt Ltd Vs CCE, Chennai-II- 2020 (3) TMI 752- (Tri)- CHN- at para 6 and 7. iv) M/s. Geodis Overseas Pvt Ltd Vs Commissioner of Service Tax, Chennai reported in 2022 (6) TMI 1085-TRI-Chennai- at para 8.10 to 10. v) M/s. AGX Logistics Pvt Ltd and Others Vs Commissioner of GST and Central Excise, Chennai reported in 2023 (12) TMI 527-Tri-Chennai-at para 6.1 to 8. 3.1 In this regard, it is submitted that, out of the above, Sl. Nos. (ii),(iii) and (iv) specifically pertains to cases where the demands were raised under "Business Support Services" and were set aside by the Tribunal. 3.2 It is submitted that Commissioner (Appeals) in para 10 of the impugned order has erred by rendering a finding that the Appellant had merely made arrangements for transportation of goods and has actually not transported the goods and therefore the service rendered by them is classifiable under "Business Support Service" and not under "international freight". In this regard, it is submitted that the above finding of the First Appellate Authority is erroneous on account of the fact that the said finding was rendered withou....
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....-I(at para 33-41) reported in 2021 (9) TMI 897 has held that even when an assessee has suppressed facts, the extended period of limitation can be invoked only when "suppression‟ or "collusion" is "willful" with an intent to evade payment of duty. 3.7 The Show Cause Notice has culled out all the figures only from the books of accounts (i.e., the final accounts- Profit and Loss Account and balance sheet) maintained by the Appellant. It is a settled legal principle that the final accounts are "public documents" and once the disclosure is made in the final accounts, though not to the revenue, the department cannot allege suppression of facts and invoke larger period. In this regard, the decision of this Tribunal, Chennai in the case of Ford India Pvt Ltd Vs Commissioner, LTU, Chennai (at para 6) reported in 2018(1) TMI 1219 at para 6 to 8 was relied. 3.8 The present issue involves interpretation of the provisions of service tax law and therefore for this reason also, extended period of limitation ought not to be invoked and consequently the penalty under Section 78 of the Act cannot be sustained. In this regard, the decision of the Hon`ble Supreme Court in the case of Internati....
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....Ltd., Tokyo, Japan engages the appellant for transportation of the cargo to the foreign buyer. The appellant engages an agent viz. New Globe Logistik Pvt. Ltd., Mumbai as Multimodal Transporter for transport of their cargo. The appellant then raised invoices to the above foreign subsidiary on air freight / ocean freight charges including the mark up. The Department has proceeded to demand service tax on the air freight / ocean freight along with mark up entirely. The freight charges are collected for transportation of goods and not for providing any other service. In fact, from the activity that has taken place, it is nothing but payment of freight for transportation of cargo in airlines as well as shipping lines. The issue as to whether the air freight charges / ocean freight charges as well as mark up is subject to levy of service tax for the period prior to 1.7.2012 has been decided by the Tribunal in various cases. The Tribunal in the case of Geodis Overseas Private Ltd. Vs CST Chennai - 2022 (6) TMI 1085 CESTAT CHENNAI has considered the issue and held that the demand cannot sustain. Relevant part of the decision reads as under : "8.1 The first issue is whether the charges c....
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....responsibility for safety of goods and issues a document of title which is a multi-modal bill of lading and commits to delivery at the consignee's end. To ensure such safe delivery, appellant contracts with carriers, by land, sea or air, without diluting its contractual responsibility to the consignor. Such contracting does not involve a transaction between the shipper and the carrier and the shipper is not privy to the minutiae of such contract for carriage. The appellant often, even in the absence of shippers, contract for space or slots in vessels in anticipation of demand and as a distinct business activity. Such a contract forecloses the allotment of such space by the shipping line or steamer agent with the risk of non-usage of the procured space devolving on the appellant. By no stretch is this assumption of risk within the scope of agency function. Ergo, it is nothing but a principal-to-principal transaction and the freight charges are consideration for space procured from shipping line. Correspondingly, allotment of procured space to shippers at negotiated rates within the total consideration in a multi-modal transportation contract with a consignor is another distinct ....
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....sed not only on the mark-up but also on the ocean freight and air freight. These charges are not subject to levy of Service Tax during the disputed period. The mark-up received by the appellant on the freight charges is due to the difference in the freight charges collected from the shipper and paid to the shipping / airliners. The issue is no longer res integra, the Tribunal in the case of Tiger Logistics (supra) held that the activity is trading of cargo space and there is no rendering of service. The demand of Service Tax on markup / 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 "taxab....
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....ant had recorded all the transactions in its records and when called for during investigation, provided full facts to the department based on which the SCN was issued. Insofar as the appellant did not dispute the demands of service tax, it paid the same along with interest even before the SCN was issued. In our considered view, this case is covered squarely by Section 73(3) and no SCN should have been issued to that extent. 19. The appellant disputed service tax on mark up which it received from 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 s....