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TaxTMI 
TaxTMI 
TaxTMI 
2024 (7) TMI 929
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....s were also handling various works for the importers and the exporters. In the course of handling such work, the Appellants were receiving reimbursements from their clients. On the ground that the Service Tax is required to be paid even on such consideration received by the Appellant the Show Cause Notice was issued. The details of Show Cause Notices issued are as per the following Table : - No. SCN NO. Period Category of Service Amount in Rs. 1. C No. V/(15)227/STAdjn/ Comm/12/24866 dt. 18.10.2012 2007-08 to 2010-11 CHA Service 1,16,43,670/- Cargo Handling Services 19,59,785/- BAS 45,83,395/- 2. C. No. V(15)301/ST/Adj/Commr/12/ 124/47 dt. 21.12.2012 2011-12 CHA Service & Cargo Handling Service 56,11,525/- After due process, the Adjudicating Authority confirmed the demand. Being aggrieved, the Appellant is before the Tribunal. 2. The Learned Counsel appearing on behalf of the Appellant submits that the Appellants are IATA Agents and they book the cargo space in the airlines at a discounted rate. The same cargo space is sold to independent customers. She submits that this purchase of cargo space and selling of cargo space would amount to trading a....
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....It is not the case of the Department that the appellants have not filed ST-3 Returns or not accounted for all these entries in their P & L Account and Balance Sheet. In such a case, she submits that the confirmed demand for the extended period is liable to set aside on account of limitation also. 7. The Learned AR appearing on behalf of the Appellant reiterates the findings of the lower authority and justifies the confirmed demands. 8. Heard both sides and perused the Appeal papers and other documentary evidence place before us. 9. Admittedly, there is no dispute that the Appellant as an IATA Member, books the cargo space in various airlines for which they pay the amount to the airlines. Subsequently, they sell such space to their clients. The clients are sold the cargo space which is already booked by the Appellant. It is not the case of the Department that the Appellants are getting any commission from the airlines or from their clients. This is a purely a trading activity of purchase and selling of cargo space and a margin between the same is only the profit. Such an activity cannot be treated as an activity amounting to service to their clients. We hold that the there is no ....
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....stics (P) Ltd. (supra) has observed that : "4.2. Demand has been made on service tax under the head of Business Auxiliary Service for the revenue earned as freight rebate. Ld. Counsel has argued that the income is generated as a result of appellants buying cargo space in bulk and selling the same to foreign shipper, he argued that various essential activity in which there is no third party involved except the appellant and the carriers. In these circumstances demand under Business Auxiliary Service cannot be sustain. It is argued that for sustaining demand under BAS, there has to be third party involved in the transaction namely a client. In the absence of any client, no demand under BAS can be raised. We find substantial force in the argument of Ld. Counsel, the freight rebate is a revenue stream generated out of trading of the space in the airline incentives. Unless the space is booked by the appellant specifically for a client the components of the Business Auxiliary Service do not come into play. In the instant case, there is no such allegation and the appellants are booking the space for their own trading activities. In these circumstances demand of service tax under BAS ca....
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....erits. 12. Now coming to the question of the re-imbursement received by the Appellant in the course of providing their service, we find that the issue is no more res integra. The Hon'ble Delhi High Court in the case of Intercontinental Consultants & Technocrafts Pvt. Ltd. Vs. Union of India, cited supra has held as under:- 10. The contention of the petitioner that Rule 5(1) of the Rules, in as much as it provides that all expenditure or costs incurred by the service provider in the course of providing the taxable service shall be treated as consideration for the taxable service and shall be included in the value for the purpose of charging service tax goes beyond the mandate of Section 67 merits acceptance. Section 67 as it stood both before 1-5-2006 and after has been set out hereinabove. This section quantifies the charge of service tax provided in Section 66, which is the charging section. Section 67, both before and after 1-5-2006 authorises the determination of the value of the taxable service for the purpose of charging service tax under Section 66 as the gross amount charged by the service provider for such service provided or to be provided by him, in a case where the co....
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....powers the Central Government to make rules for carrying out the provisions of Chapter V of the Act is manifest, in the sense that only the service actually provided by the service provider can be valued and assessed to service tax. We are, therefore, undoubtedly of the opinion that Rule 5(1) of the Rules runs counter and is repugnant to Sections 66 and 67 of the Act and to that extent it is ultra vires. It purports to tax not what is due from the service provider under the charging Section, but it seeks to extract something more from him by including in the valuation of the taxable service the other expenditure and costs which are incurred by the service provider "in the course of providing taxable service". What is brought to charge under the relevant Sections is only the consideration for the taxable service. By including the expenditure and costs, Rule 5(1) goes far beyond the charging provisions and cannot be upheld. It is no answer to say that under sub-section (4) of Section 94 of the Act, every rule framed by the Central Government shall be laid before each House of Parliament and that the House has the power to modify the rule. As pointed out by the Supreme Court in Hukam ....