TaxTMI 
TaxTMI 
2024 (10) TMI 51
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....est; penalty was also imposed under the provisions of the Finance Act, 1994. 2. The facts of the case are that the appellant has been registered as a provider of service under the categories of 'clearing and forwarding agency service', 'business auxiliary service', 'custom house agent service' and 'courier agency service'. 2.1. An audit was conducted on 14.02.2011 and thereafter, a Show Cause Notice was issued to the appellant on 21.04.2011 for the period from 2005-06 to 2009-10 holding that the appellant has not paid Service Tax on the full amount of services rendered by him. Accordingly, it was alleged by the Revenue that the appellant have short paid Service Tax. The charges levelled against the appellant are as under: - (....
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.... that whole of the impugned period is prior to 14.05.2015 and therefore, no Service Tax is payable by the appellant in this case. 4.1. With regard to the issues (B) and (C) hereinabove, it is submission of the Ld. Counsel for the appellant that the amount, in reality, is a discount granted to them against purchase of cargo space from the concerned shipping lines and thus, this amount does not pertain to commission earned by them; it is only on account of sale of space by the appellant to their clients which was purchased from shipping lines and thus it is the profit earned by the appellant. The appellant submits that the same is therefore not leviable to Service Tax as held by the Tribunal in the case of International Clearing and Shippi....
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.... the said amounts were collected on account of sale of space purchased by the appellant from shipping lines, which were sold to their clients at a higher value. Therefore, it is observed that the appellant has earned profit on sale of space, which does not constitute a 'commission' received by the appellant. Hence, we hold that the same does not fall under the category of 'business auxiliary service'. The same view has also been taken by the Tribunal in the case of International Clearing and Shipping Agency (supra) wherein it was observed as under: - "7.4.1 The third issue is the demand raised on freight and brokerage, etc.,. The Ld. Counsel submitted that the appellant receives a brokerage / rebate from the shipping line on the oc....
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.... the Department does not have a case that the appellant has not discharged Service Tax on the agency commission received as a Steamer Agent or CHA. The demand is raised on the mark-up made which is the profit out of the difference in value of ocean freight collected by the shipping line and paid by the exporter / client. The Tribunal in the case of Greenwich Meridian Logistics (I) Pvt. Ltd. (supra) held as under:- "13. The notional surplus earned thereby arises from purchase and sale of space and not by acting for a client who has space or slot on a vessel. Section 65(19) of Finance Act, 1994 will not address these independent principal-to- principal transactions of the appellant and, with the space so purchased being allocable onl....