TaxTMI 
TaxTMI 
2025 (9) TMI 754
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....the case are that the Appellants herein are engaged in rendering service under the category of Custom House Agent Service apart from Freight Forwarding. The appellant discharged service tax on the consideration received for CHA service in accordance to the provisions of Chapter V of the Finance Act 1994 as amended. 3. However, the expenses such as freight, C&F charges, Documentation charges, Transportation charges etc., incurred by the appellant on behalf of their clients were reimbursed. The revenue is of the view that the portion of reimbursement is includable in the taxable value for the purpose of Section 67. Further, the appellant has received incentive from various liners and the same is proposed to service tax under the category of Business Auxiliary Service alleging that the appellant has promoted the business of the Liners. 4. The appellants were issued with a Show Cause Notice No. 72/2009 proposing to levy service tax on the expenses reimbursed and the incentive received apart from interest and penalty. The main contention in the show cause notice is that in terms of Rule 5 of the Service Tax (Determination of value) Rules 2006, the expenses reimbursed are liable to....
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....ious Airlines/Shipping-lines and subsequently sold the same to the shippers and earned some profit. Airline/ Shipping gives commission/ incentive to the Appellant to encourage more purchases. a. The appellant contended that they buy cargo space in various airlines/shipping lines for International movement of cargo and receives commission/incentives from the airline/shipping line based on the volume of business. The cargo space is then sold to the exporters. b. The service rendered by them is to the exporter and no service is provided to the Airline/Shipping line by the appellant. There is no service provider-service recipient relationship between the appellant and the airline/shipping line. Therefore, the discount given by the Airline/shippingline is not a consideration to be subjected to service tax. c. They are not marketing or promoting the business of the Airline/shipping line to be covered by Business Auxiliary Service relying on the following decisions: - i. AVR Cargo Agency Pvt. Ltd. [(2018) 97 (Chennai CESTAT)] - para 5. ii. International clearing and shipping Agency Vs. Commissioner of GST and Central Excise [(2024) 15 Centax 35....
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....the valuation of taxable service, the value of taxable service shall be the gross amount charged by the service provider 'for such service' and the valuation of tax service cannot be anything more or less than the consideration paid as quid pro qua for rendering such a service. 25) This position did not change even in the amended Section 67 which was inserted on May 01, 2006. Sub-section (4) of Section 67 empowers the rule making authority to lay down the manner in which value of taxable service is to be determined. However, Section 67(4) is expressly made subject to the provisions of sub- section (1). Mandate of sub-section (1) of Section 67 is manifest, as noted above, viz., the service tax is to be paid only on the services actually provided by the service provider. 26) It is trite that rules cannot go beyond the statute. In Babaji Kondaji Garad, this rule was enunciated in the following manner: "Now if there is any conflict between a statute and the subordinate legislation, it does not require elaborate reasoning to firmly state that the statute prevails over subordinate legislation and the bye- law, if not in conformity with the statute in order to g....
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....w. There is a technique required to draft a legislation as well as to understand a legislation. Former technique is known as legislative drafting and latter one is to be found in the various principles of "interpretation of statutes". Vis-à-vis ordinary prose, a legislation differs in its provenance, layout and features as also in the implication as to its meaning that arise by presumptions as to the intent of the maker thereof. 28. Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities." Law passed today cannot apply to the events of the past. If we do something today, we do it keeping in view the law of today and in force and not tomorrow's backward adjustment of it. Our belief in the nature of the law is founded on the bedrock that every human being is entitled to arrange his affairs by relying on the existing law and should not find that his plans have been retrospectively upset. This principle of law is known as....
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....as been decided by the Tribunal in the decisions cited by the ld. Counsel for the respondent. The Tribunal has held the issue in favour of the respondent. The relevant portion of the decision in the case of Continental Carriers (supra) is reproduced as under :- "5. We have heard both sides and perused the material available on record. We note that the tax liability on similar activities under the category of 'Business Auxiliary Service' has already come up for consideration before the Tribunal in the above mentioned cases and Service Tax Appeal No.40895 of 2015 the Tribunal in the case of DHL Logistics (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 sustain. It is argued that for sustaining demand under BAS, ....
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....y of BAS. In view of above, the demand under the head of BAS for the Revenue generated as airline/airline incentive is set aside." 6. Similar ratio has also been followed in the case of Karam Freight Movers (supra). The observations of the Tribunal are as below : "11. On the second issue regarding the service tax liability of the respondent under BAS, we find that the impugned order examined the issue in detail. lt was recorded that the income earned by the respondent, to be considered as taxable under any service category, should be shown to be in lieu of provision of a particular service. Mere sale and purchase of cargo space and earning profit in the process is not a taxable activity under Finance Act, 1994. We are in agreement with the findings recorded by the original authority, In this connection, we refer to the decision of the Tribunal in Greenwich Meridian Logistic (I) Pvt Ltd. v CST, Mumbai - 2016 (43) STR 215 (Tri-Mumbai) = 2016- TIOL-869-CESTAT-MUM. The Tribunal examined similar set of fact and held that the appellants often, even in the absence of shippers, contract for space or slots in vessels in anticipation of demand and as a distinct business act....