TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 213
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....ices on the Appellant. The price at which the Appellant purchases the said space is called 'buy rate'. Further, the appellant sells the space booked to various customers by adding its mark-up. This price at which the appellant sells the space to its customers is called 'sell rate'. The difference between buy rate and sell rate is the margin, which the Appellant retains. This trading of cargo space is not any service provided by the Appellant, therefore, the appellant never paid any service tax thereon. Facts leading to the present dispute 2.2 On scrutiny of the books of accounts maintained by the appellant, ST-3 returns filed by the Appellant, Cenvat Ledger, Profit and Loss account, the department formed the view that tax was not paid on whole of the amount received, therefore, a Show Cause Notice (SCN) dated 21.10.2014 for the period 2009-10 to 2012-13 was issued by the department proposing to demand service tax amounting to Rs.3,36,21,507/- and deny Cenvat Credit amounting to Rs.90,173/-, along with interest and penalty, inter alia on the basis of the following allegations: (i) the Appellant has not included the value of extra consideration received for air freight....
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....In the instant case, he submits that the first and second issue relates to demand of service tax on the profit earned by the Appellant upon sale of pre-booked cargo space on ships to its clients/ customers. 3.2 He submits that as is evident from the foregoing paragraphs, the Appellant is working as a freight forwarder to facilitate exportation of containers from India to overseas countries by interalia booking of cargo space with a particular shipping line. 3.3 He further submits that the Ld. Principal Commissioner, vide the impugned order, has undisputedly held that the collection of ocean freight is not liable to service tax, however, the Ld. authority has proceeded to hold that the extra consideration being collected over and above the freight would qualify as "Business Auxiliary Service" (BAS) under Section 65(104)(zzb) of the Finance Act, 1994. Further, the Ld. authority also held that the extra amount received as discount by the Appellant was in the nature of commission/brokerage for working as an intermediary/agent between exporter and shipping lines which is also liable to be categorised as "Business Auxiliary Service" under Section 65(104)(zzb) of the Finance Act, 19....
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....ot amount to rendition of any service and thus, service tax is not payable under the category of 'Business Support Service' or 'Business Auxiliary Service'. The aforesaid decision was further maintained by the Hon'ble Supreme Court in Commissioner of Central Excise Noida v. M/s. Bluemoon Logistics (P) Ltd, 2025 (1) TMI 1041-SC ORDER. To support of his contention, he also relies on the following case laws : • Commissioner of Service Tax, New Delhi v. Karam Freight Movers, 2017 (4) G.S.T.L. 215 (Tri.-Del.) • M/s Skylift Cargo (P) Ltd. v. Commissioner of Service Tax, Chennai and vice versa, 2018 (2) TMI 320- CESTAT Chennai • Marinetrans India Pvt. Ltd. v. CST, Hyderabad-ST, 2020 (33) GSTL 241 (Tri.-Hyd.) 3.8 Further, he submits that since there are only two parties in the transaction, the seller of space and the buyer of space, therefore, any discount or an incentive received as a result of this transaction of sale cannot be considered as supply under BAS, irrespective of the fact that it is recorded as commission/ brokerage in the books of accounts. Reliance in this regard is placed on M/s Console Shipping Services India Pvt. Ltd. v. Commissi....
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....vices solely on the ground of issuance of a consolidated invoices. 3.11 It is submitted that the impugned order confirmed demand amounting to Rs.9,81,928/- on the ground that the Appellant segregated the charges of transportation from the clearing and forwarding services in the bills and claimed abatement on the transportation charges, however, the Appellant was neither registered under the category of Transportation of Goods by Road nor any consignment note was issued thereto, thus, it was held that the Appellant was providing composite service which shall be covered under the category of 'Clearing and Forwarding Agent Service' and no abatement would be eligible to the Appellant under the category of Transport of Goods by Road. It is submitted that the "Transport of goods by road service" and "Clearing and Forwarding Agent Service" are two independent services and cannot be inter linked. 3.12 Further, it is submitted that during the positive list regime as per Section 65(105)(zzp) a taxable service means any service provided or to be provided to any person, by a goods transport agency, in relation to transport of goods by road in a goods carriage. Additionally, the de....
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....2 (9) TMI 1060-CESTAT Mumbai. 3.16 Further, he submits that the appellant was initially not registered under the category of "Transport of Goods by Road", in this regard it is submitted that mere non-registration under the same head does not result in misclassification. Thus, the denial of classification of service under 'Transport of Goods by Road' is wholly arbitrary and unreasonable. Thus, the impugned order confirming demand to the extent of Rs.9,81,928/- is liable to be set aside. 3.17 It is alleged in the show-cause notice that in terms of Rule 2(k)(D) of Cenvat Credit Rules, 2004 (CCR), motor vehicles have been excluded from the definition of inputs. Further, Rule 2(1)(BA) of CCR, excludes insurance, servicing, repair and maintenance of motor vehicles which is not a capital goods of an assessee from the ambit of input service. Thus, the Cenvat Credit availed by the Appellant on service tax paid on insurance premium of private motor vehicle for the period 2010-11 to 2012-13is inadmissible. He submits that demand to the extent of Rs.64,320/- confirmed for the FY 2011-12 and 2012-13 is admitted by the Appellant and paid vide Challan No. 00006 dated 29.12.2015. Thus, the A....
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.... service tax can be demanded on receipt of profit earned from ocean freight in relation to trading of cargo space, collected from the clients/exporters ? (b) Whether discounts received by the appellant from the shipping companies subsequent to the sale of cargo space can be considered as Business Auxiliary Services rendered by the appellant ? 7. We find that the issues involved in the matter are that as the appellant was engaged in purchase and sale of cargo space by getting discount from the shipping agencies, the said service cannot be considered as "Business Auxiliary Service" as held by this Tribunal in the case of M/s Bluemoon Logistics (P) Ltd. (supra), wherein it has been held that the mere purchase and sale of cargo space is not a 'service' and surplus income receipt earned by the appellant is not a 'consideration' towards rendition of any business support service. Accordingly, no service tax is payable by the appellant. 8. Following the principle in the case of M/s Bluemoon Logistics (P) Ltd. (supra), we hold that the appellant is not liable to pay service tax under the category of "Business Auxiliary Service" for the above two issues. Hence, the abov....