TaxTMI 
TaxTMI 
2024 (9) TMI 462
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....nd confirmed the demand of Rs.. 11,74,493/- in respect of additional charges/mark-up received on freight income. 2. The brief facts of the case are that the assessee-appellant is engaged in the business of rail freight and transportation services, for transporting goods of its customers both domestically and for export and imports. The Appellant also provides end to end connectivity of goods to be imported or exported, and thus carries out international transportation of goods by booking space on liner ships. 2.1 During the course of audit in Appeal No. ST/50068/2019 for the period April 2011 to March 2015, certain discrepancies were communicated and accordingly the SCN dated 15.10.2015 came to be issued on inter-alia following grounds:- (i) The differential ocean freight charged by the Appellant is taxable under Business Auxiliary Services BAS i.e. different between the payment made to the liner and payment received from the customers, by alleging that the same is commission / remuneration / additional consideration / margin received by the Appellant for provision of service agent of its customers. (iii) Notional Commission on Corporate Guarantee executed by Rs. 14 Crores. ....
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....f Central Excise, Chennai II -2020 (3) TMI 752-CESTAT CHENNAI Surya Shipping vs. Commissioner of Central Excise & ST, Rajkot-2020 (2) TMI 282-CESTAT AHMEDABAD. 3.3 In addition, the learned counsel also placed reliance on the CBEC Circular No. 197/7/2016 dated 12.08.2016 which clarifies the guidelines to determine whether in offering freight services, the service provider acts are a principal or agent. For a provider to qualify as a principal provider, he needs to: (i) negotiate terms of the freight with the liner company, (ii) have the invoice raised on itself, and (iii) take all legal responsibilities and risks for the transportation of goods 3.4 In view of above, the learned counsel submitted that the appellant does not provide a Business Auxiliary Service to its customers. He contended that the issue was no longer res-integra as this Tribunal on identical issue in case of CGST, Delhi vs. Pristine Logistics and Infra Projects Pvt. Ltd. [2024 (5) TMI 1401 - CESTAT NEW DELHI], TIGER LOGISTICS (INDIA) LTD. vs. Commissioner of Service Tax-II, Delhi [2022 (2) TMI 455 CESTAT NEW DELHI] and Console Shipping Services India Pvt. Ltd. vs. CST [2023 (5) TMI 192-CESTAT NEW DELHI] h....
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....s Tribunal on identical issue have held that corporate guarantees without consideration is not subject to service tax. In support of his submission, ld. Counsel relied upon the following decisions:- Commissioner of CGST, Delhi vs. Pristine Logistics and Infra Projects Pvt. Ltd. 2024 (5) TMI 1401 CESTAT NEW DELHI Commr. CE & ST, Delhi vs. Air Liquide North India Pvt. Ltd. 2024 (5) TMI 327-CESTAT NEW DELHI Commr. CE & ST, Delhi vs. Pharmax Corporation Ltd. 2024 (3) TMI 1179 CESTAT NEW DELHI Pr. Commr of Central Tax, New Delhi vs. Sindhu Trade Linkers 2023 (11) TMI 890- CESTAT NEW DELHI Commissioner of CGST & Central Excise Mumbai East Versus Edelweiss Financial Services Ltd - 2022 (2) TMI 1359- CESTAT MUMBAI - affirmed by the Hon'ble Supreme Court in Commissioner of CGST And Central Excise Versus M/s Edelweiss Financial Services Ltd.- 2023 (4) TMI 170-SC Order IIFL Holding Ltd. vs. Commr of CGST, Mumbai 2024 (2) TMI 967-CESTAT MUMBAI Ultratech Cement Ltd. vs. Commissioner of CGST, & Cx. Mumbai East 2023 (10) TMI 1363-CESTAT MUMBAI 3.7 Learned counsel further submitted that the provision of corporate guarantee by M/s NOL is without any consideration. In the absence ....
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....r. Even though, the accruing benefit was not monetary in nature, such non-monetary consideration is squarely covered under Section 67(1) ii) of Finance Act, 1994. Therefore, in view of the same, the value has to be determined in term of Service Tax (Determination of Value) Rules, 2006. The Adjudicating authority has rightly classified the services provided on behalf of the assessee-appellant as corporate guarantee w.e.f. 01.07.2012 under "service" as defined under section 65(44) of the Act, as same is neither covered in the exclusion clauses, nor in the negative list enumerated in section 66D of Finance Act, 1994 and notice is liable to pay service tax on the same w.e.f. 01.07.2012. In the light of above submissions made, it is prayed that the above assessee's appeal may please be dismissed and the Revenue's appeal may please be allowed. 5. We have heard the learned counsel for the appellant and the Learned Authorized Representative for the Department. We note that both the issues before us are no more res integra. 5.1 The issue of taxability of providing Corporate Guarantee without any consideration was dealt at length by this Tribunal in the case of Commissioner of CGST & Centr....
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....non-monetary terms for the Corporate Guarantees issued. Missing this vital point, valuation of the consideration using provisions of Section 67(1) of the Finance Act, 1994 become a futile exercise." 6. Mr. Rai Chandani then read paragraphs 8 and 9 of the judgment of the Tribunal, which are extracted below: "8. The criticality of 'consideration' for determination of service, as defined in section 65B(44) of Finance Act, 1994, for the disputed period after introduction of 'negative list' regime of taxation has been rightly construed by the adjudicating authority. Any activity must, for the purpose of taxability under Finance Act, 1994, not only, in relation to another, reveal a 'provider', but also the flow of 'consideration' for rendering of the service. In the absence of any of these two elements, taxability under Section 66B of Finance Act, 1994 will not arise. It is clear that there is no consideration insofar as 'corporate guarantee' issued by respondent on behalf of their subsidiary companies is concerned. 9. The reliance placed by Learned Authorised Representative on the 'non-monetary benefits' which may, if at all, be of relevance for determination of assessable value u....
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....itself on account of the appellant and cannot be called a service at all. Neither can the profit earned from such business be termed consideration for service. Respectfully following Satkar Logistics, Nilja Shipping Pvt. Ltd., Surya Shipping and ITC Freight Services, we hold that the appellant is not liable to pay service tax." 5.3 The Tribunal in an earlier decision the case of M/s Greenwich Meridian Logistics (India) Pvt Ltd., vs Commissioner of Service Tax, Mumbai 2016(4) TMI-547-CESTAT MUMBAI held as follows: "12. The appellant takes 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 al....