TaxTMI 
TaxTMI 
2025 (12) TMI 819
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....bution and Logistics'. They also collected Ocean/Air freight from their clients and in some cases the actual amount of freight incurred were less than the amount collected thus resulting in excess collection of freight leading to a mark up in freight charges collected. Further, they used their own vehicles for the transportation of goods for export/import and paid service tax as goods transport agent. It appeared that the payment of service tax on abated value as GTA was not entitled to them as they were providing logistics service and were not a GTA or a consignor or a consignee. Hence proceedings were initiated by issuance of two Show Cause Notices dated 18.10.2011 and 21.04.2012 for the period April 2010 to September 2010 and October 2010 and March 2011 for recovery of Rs.18,37,523/- and Rs.24,49,244/- along with interest and for imposing penalty. After due process of law, the Ld. Adjudicating Authority confirmed the demand along with interest and imposed penalty under sec. 76 of the Finance Act, 1994. Aggrieved by the said order, the appellant preferred appeals before the Ld. Commissioner (Appeals). Vide the impugned order, the Ld. Commissioner (Appeals) rejected the appeals. H....
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....ges cannot be said to be related to the activities of CHA. The relevant portion of the Tribunal's decision is reproduced below for ready reference. "9. On a very careful consideration of the issue, we find that the appellants apart from the activity of the Customs House Agent undertake work as freight forwarders and other activities related to that. We have perused the details of the billing for their entire period under dispute. It is broadly categorized in the following way. The charges are relating to :- (1) Air exports (2) Air imports (3) Ocean exports (4) Ocean imports (5) Customs clearance (6) Logistic. For example, in respect of Air exports, for the year 2000-2001 the Freight revenue is of the order of 8.8 crores. That means, this amount represents the freight collected by the appellants towards air freight for the customers and then paid to the airliners. This amount has also been sought to be taxed under the Customs House Agent activity. This shows the adjudicating authority has not applied his mind to the details of the various activities undertaken by the appellants and how they relate to the amount ....
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....relating to the entry or departure of conveyances or the import or export of goods at any Customs Station.‛ When we carefully go through the definition of the customs house agent, we find that the activity of the CHA relates to the entry or departure of conveyances or import or export of goods at any Customs station. Therefore the activity of the CHA is limited to the Customs Station. It cannot extend beyond it. For example, in the present case, the appellants collect air freight for export from the clients, but before collection he pays from his pocket to the Airliner. Thus this activity relates to transportation from a port in India or from a place in India to any other place in a foreign country. These freight charges cannot be said to be related to the activity of the CHA. In any case, the air freight fee is for a passage beyond India. This service is also not rendered by the CHA. The freight charges collected is for the transportation of the goods and the transportation service is rendered actually by the Airliner and not the CHA. These points have not been properly gone through by the adjudicating authority. Similarly, if we see the breakup of other services, t....
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....situation aside, the contention of the appellant is that it is a 'multi-modal transport operator' which entails a statutorily assigned role in cross-border logistics. According to Section 2 of the Multi-modal Transportation of Goods Act, 1993. (m) 'multimodal transport operator' means any person who - (i) concludes a multimodal transport contract on his own behalf or through another person acting on his behalf; (ii) acts as principal, and not as an agent either of the consignor, or consignee or of the carrier participating in the multimodal transportation, and who assumes responsibility for the performance of the said contract; and (iii) is registered under sub-section (3) of section 4; and (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 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 i....
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....(iii) client; or procurement of goods or services, which are inputs for the? (iv) client; or xxxx provision of service on behalf of client; or?(v) xxxx and includes services as a commission agent' A harmonious reading of the provisions supra points to the 'client' being an essential ingredient in the rendering of a taxable service; the client is the one who pays the consideration for rendering of such service. No record of any receipts from airlines has been brought on record to evince the flow from them as clients. On the contrary, the appellant pays the airlines for booking of space in aircraft. The airlines, therefore, lack the distinguishing characteristics of a client. The excess reimbursement is the true market price paid by the consignor to the appellant over and above the price at which slot was pre-booked from the airline. Of the many activities listed in the definition supra, the closest may, at best, be the procurement of services that are inputs for a client. However, here too, the appellant does not, in relation to the amounts entered in the books of accounts, procure space for the client but on its own....