TaxTMI 
TaxTMI 
2024 (11) TMI 8
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....ice tax Commissionerate Ahmedabad as per the provision of Section 69of the Finance Act 1994. The department working on an intelligence, searched the premises of the appellant and found that the appellant while working as customs house agent have been raising two sets of invoices one is raised towards the services / agency charges for the customs work and the second type of the invoices were for actual reimbursement of various charges/expenses incurred by the appellant on behalf of the importer or exporter like transportation charges, booking of the space on the ocean going vessel etc. The department has noticed that the appellant have discharged the service tax liability on the CHA agency charges collected by the appellant from their client....
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....ecision in the case of Commissioner Vs Boing India Defense Pvt Ltd. (ii) The Hon'ble Tribunal, Ahmedabad in the case of Chinubhai & Kalidas Brothers Vs Commissioner reported at (2024) 17 CENTAX 99 (Tri.-Ahmd.) has held that earning margin of difference between the amount charged from the clients and paid to shipping lines for procuring space on ships are not required to be included in the value for the purpose of computing service tax. (iii) This issue who came up before the Principal Bench of the Hon'ble Tribunal at New Delhi in the case of Tiger Logistics India Ltd. The Hon'ble Tribunal vide Final Order No. 50868-50870/2023, dated 11.04.2023 has held that the markup on the Ocean Freight, detention charges and....
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.... been made by him to the service provider on behalf of the recipient of the service and same has been indicated in the invoices issued by the service provider to the recipient of the service the addition of small amount of the commission on and above the actual expenditure incurred for availing various kind of the services. The small variation in the billed amount cannot change the nature of the service which have been rendered in the entire transaction. The fact of the matter remains that the service provider has provided various kind of the services to the appellant's importer / exporter clients and for this effect, necessary invoices have been issued on which service tax has been charged by the service provider. These facts clearly indic....
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.... 14. In Marinetrans India Pvt. Ltd. vs. CST, Hyderabad-ST5, the Division Bench held after considering the Circular dated 12.08.2016 issued by the Central Board of Excise and Customs that buying and selling space on ships does not amount to rendering a service and any profit or income earned through such transactions would not be leviable to service tax. The relevant portions of the order passed by the Tribunal is reproduced below: "6. We have considered the arguments on both sides and perused the records. It is not in dispute that the appellant herein is purchasing the space from the shipping lines and then is selling the same to exporters. It is the case of the Revenue that this amounts to acting as an intermediary for helping ....
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.... since he is merely facilitating the provision of the service of transportation but not providing it on his own account. When the freight forwarder acts as an agent of an airline/carrier/ocean liner, the service of transportation is provided by the airline/carrier/ ocean-liner and the freight forwarder is merely an agent and the service of actual transportation will not be liable for service tax under Rule 10 of POPS. 2.2 The freight forwarders may also act as a principal who is providing the service of transportation of goods, where the destination is outside India. In such cases the freight forwarders are negotiating the terms of freight with the airline/carrier/ocean liner as well as the actual rate with the exporter. The invoic....
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...., interest and penalties are liable to be set aside and we do so." (emphasis supplied) 15. In Bhatia Shipping (P) Limited vs. Commissioner of Service Tax-I, Mumbai, the Division Bench followed the earlier Division Benches and observed as follows: "5. The appellant is primarily engaged in the business of freight forwarding, clearing and forwarding and other allied activities that involve booking of Containers/Air Cargo with various Shipping Lines/Airlines for their customers and recovering other miscellaneous charges from their customers (mainly importers and exporters). The appellant provides cargo space to the customers who are importers/exporters of goods. The appellant pays charges for space booking to differen....