TaxTMI 
TaxTMI 
2025 (11) TMI 434
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....providing services of Customs House Agent to their customers. They are registered with the Department for provision of the above services. They are also booking cargo space at random depending upon the best of the rates offered, best timetable offered and the quickest route offered as per direction and the choice of the customers. 2.2 During the course of scrutiny of records of the Appellant for the period from 16.06.1997 to 28.02.2005 it was observed that they were receiving brokerage from shipping line for providing services for promotion and marketing and not paying Service Tax on brokerage so received. The services of promotion for marketing as per Revenue were covered under the category of 'Business Auxiliary Service' as per Section 65(19) of the Finance Act, 1994 on which Service Tax is leviable w.e.f. 01.07.2003. 2.3 During the period from 01.07.2003 to February 2005, the Appellant received Rs.49,97,528/- as brokerage charges from shipping lines on which Service Tax works out to Rs.4,26,187/-. The Appellant received brokerage charges as indicated in the table below on which Service Tax was not paid:- Period Brokerage received Service Tax Due 01.07.2003 to F....
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....roposed in the Show Cause Notice bearing C. No V (30) 89/STAX/MBD/06/2676 dated 20.4.06. The amount of service tax for the periods under consideration and the interest thereon already deposited by the party, was ordered to be appropriated to the government account." 2.6 The Appellant filed a revision application before the Commissioner, Central Excise, Meerut-II. They also filed Writ Petition No.1273/2009 before the Hon'ble Allahabad High Court. The Hon'ble High Court passed Order dated 10.04.2013 in the aforesaid Writ petition of the Appellant and directed the Commissioner of Central Excise Meerut-II to decide the application dated 24.2.2009 filed under Section 84 of the Act, against the order dated 12.04.2007 within a period of 2 months from the date of production of certified copy of the order. 2.7 Complying with the order of the Hon'ble High Court the impugned order has been passed by the Commissioner. 2.8 Aggrieved Appellant have filed the present appeal. 3.1 We have heard Shri Prachit Mahajan, Advocate & Shri Mohit Kalra, Advocate appearing for the Appellant and Shri A. K. Choudhary, Departmental Representative for the Revenue. 3.2 Arguing for the Appellant....
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....n'ble Director General of Service Tax in the matter entirely to the Air Cargo Agents. Here it is mentioned that Circular issued under F. No. B43/1/97-TRU dated 06/06/1997 has since been rescinded vide circular No. 93/4/2007 ST dated 10.05.2007. Further the para quoted by the party is pertaining to valuation of the service. Here it is emphasized that the party is engaged in two kinds of activities, namely (i) they are proving services to exporters /Importers under Customs House Agents services and received payments from the exporter/importer and (ii) They are receiving certain amount as brokerage from shipping line for services provided to shipping line in relation to canvassing of import/export cargo [Para 30 of Writ Petition refers). So it is clear that they are receiving the brokerage from shipping line for certain activity as mentioned by them in the writ petition. Moreover this activity is classifiable under BAS as per definition under Section 65 (19) of the Finance Act, 1994. The party's contention regarding composite service, does not arise here because the activity relating to shipping line is different from those relating to exporter/impor....
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....ing lines to get more & more customers to use their cargo/ lines for export/ import of the goods. In this context, the Departmental clarifications issued vide Boards Circular 59/8/2003 dated 20.06.2003 is relevant.' In Para 2.3.1 of the said Circular, it is clarified that "while it is not possible to give exhaustive list of business auxiliary services, the following are illustrations of services that are covered under this category viz. (i) Evaluation of prospective customers (ii) Processing of purchase orders (iii) Customers management (iv) Information and tackling of delivery schedules (v) Accounting and processing of transactions (vi) Operational assistance for the marketing (vii) Formulation of customer service and pricing policies (viii) Managing distribution & logistics (ix) The services provided in relation to getting a customer (x) Verification of prospective customer (xi) Processing of purchase order etc. As the exporters/ importers are in direct contact with their CHA and therefore the CHA assists the shipping lines to get their customers i, e. exporters/ import....
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..... The Tribunal accepted the order of the Department. The said facts and findings are squarely applicable to this case also. In the case of Transianka Air Travel Pvt Ltd. 2007(7) STR 476 (Tri-Chennai), the appellant was receiving Overriding Commission from the airlines for domestic and ter-national passenger traffic sales to promote and market the airlines, passenger traffic in India. It was classified under BAS by the Department and was upheld by the Tribunal. Further as regards classification under Section 65 A of the Finance Act, 1994 the services of the party are classifiable under Section 65 (105) (h) for CHA & for BAS under Section 65 (105) (zzb) of the Finance Act, 1994. So there is no classification dispute as the activities relating to promotion or marketing of shipping lines and incidental or auxiliary support services mentioned above, will fall under BAS & not under CHA. The customs clearance for import and export of goods is classifiable under CHA services. Therefore classification will be as per Section 65A (1) and not as per 65 A (2) of the Act, there being no dispute about such services falling under BAS and not under CHA. The classification....
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....riptions and the service tax will be computed only with reference to such charges. Thus, it does not say that brokerage charges are such charges received by a CHA. The Revenue, in fact, classifies brokerage under BAS. So. this clarification relevant for CHA will not apply to BAS Further, it is settled law and held by the Apex Court, that measure of taxation cannot affect the nature of taxation. In fact, para 2.4 of this circular is how to compute taxable value of CHA service for assessment of tax and thus it is a measure of taxation. It cannot decide and determine whether such brokerage will fall under CHA or otherwise the nature of taxation. As discussed in the foregoing paras, a service is classified according to its nature and character. Moreover, the said Circular dated 06-06-1997 has been rescinded with effect from 10-05-2007 by Circular No. 93/4/2007-ST date 10-05-2007 and this clarification of circular dated 06-06-1997 has no relevance thereafter and particularly the period of this Order Further, the party's reliance on advice of a private consultant on the issue of leviability of service tax or otherwise on brokerage charges has no legal footi....
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....y under BAS in the SCNs issued & Adjudication Order passed 4.3 We find that the issue in the present case is no longer res integra and has been decided by the coordinate bench of the Tribunal in the case of Bluemoon Logistics (P) Ltd. [Final Order No 70111-70112/2024 dated 05.03.2024 in Service Tax Appeal No.58884 & 59192 of 2013] holding as follows:- "8. The Appellant-assessee is inter alia engaged in facilitating clearance of export/import cargo at various ports /ICDs/CFS for which they book space in ocean going vessels for their customers/ exporters, coordination, with shipping lines for terminal handling of containerized cargo and coordinating with CHAs for customs clearances of documents etc. These services are in the nature of Clearing & Forwarding Services for their customers who mostly are exporters. Appellant assessee arranges to collect the export cargo stuffed in containers from the premises of the exporters in India, arrange customs clearance and thereafter makes shipment of export cargo in containers through shipping lines/airlines, get unloading of the cargo at foreign port and finally arranges to deliver the export goods at the godown of the foreign party....
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....e Tax under the category of 'Business Auxiliary Service ' nor under 'Business Support Service' and thus, the demand of service tax confirmed vide the impugned Order is not sustainable and is liable to be set aside. Further, in the case of Console Shipping Services India Pvt. Ltd. v. Commissioner of Service Tax, Delhi-II, 2023 (5) TMI-CESTAT New Delhi, the Tribunal held that the income/receipts under the head of airline commission and airline incentive was not taxable under BAS as the Appellant assessee was not buying and selling space on the airline on behalf of their client but on their own account as the they were directly buying themselves and thereafter selling the same to the exporters. Therefore, the said activity cannot be considered as BAS since the statute requires at least three parties to be involved in the transaction namely the service provider, service recipient and the client which was not the case involved. Hence, Service Tax was not payable. Reference is also made to Circular No.197/7/2016 dated 12.8.2016 though issued subsequently in the context of Service Tax on Freight forwarders on transportation of goods from India relating to post negative li....
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....of the Finance Act, 1994 w.e.f. 10.9.2004. However, the Appellant assessee is not an aircraft operator and as such they are not covered within the ambit of charging provision of Section 65(105)(zzn) of the Finance Act, 1994. Reliance is placed on the decision of the Tribunal in Agility Logistics (P) Ltd. v. Commissioner of Service Tax, 2013 (39) STT 277 (Tri. - Chennai). Appellant assessee was also providing terminal handling services, documentation service, Bill of Lading service, unloading of cargo services, etc. and duly discharging the applicable tax thereon even when the said charges are not required to be added to the taxable value for the purposes of payment of tax. In absence of any dispute on payment of service tax by the Appellant assessee, Cenvat credit cannot be denied on invoices which are merely issued in the name of its branch offices/premises registered or unregistered. Proviso to Section 73(1) of the Finance Act is not invokable, accordingly substantial portion of the demand being beyond the normal period of one year in respect of SCN dated 23.4.2012 issued for the period from October 2006 to March 2011, is barred by limitation and deserves to be set aside. Further....
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....nd (a) "carrier" means a person who performs or undertakes to perform for a hire, the carriage or part thereof, of goods by road, rail, inland waterways, sea or air; 12. The Appellant takes responsibility for safety of goods and issues a document of title which is a multimodal 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 allotment of such space by the shipping line or steamer agent with the risk of non-usage of the procured space devolving on the appellant. By no stretch is this assumption of risk within the scope of agency function. Ergo, it is nothing but a principal-to-principal transaction and the freight charges are consideration for space procured fro....