TaxTMI 
TaxTMI 
2025 (12) TMI 1855
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....sioner of C.G.S.T. and Central Excise, Kolkata South Commissionerate (hereinafter referred to as Revenue) against the same Order-in-Original No. 148/COMMR/ST-II/KOL/2016-17 dated 28.03.2017 passed by the Commissioner of Service Tax-II, Kolkata. 1.2. As both these appeals emanate from the same Order-in-Original, both are taken up together for decision by a common order. 2. The appellant-company is an international freight forwarder that renders freight forwarding service both for outbound cargo and inbound cargo. The appellant books cargo space on its own account with airline company/shipping line company for transportation of cargo from the port of loading in one country to the port of release in another country. It sells cargo space, already booked with airline company/shipping line company, on its own account to customer (consignor/consignee) at a profit. The difference between 'sell rate' and 'buy rate' gives rise to business profit of the company. 2.1. Apart from rendering freight forwarding service to customers as principal, the appellant-company also renders Custom House Agent (hereinafter referred to as 'CHA') service at the customs stat....
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....ctivities pertaining to the domestic clients, they did not discharge service tax for such charges collected for services rendered to overseas customers claiming that those amounts were towards the export of services. 2.5. Accordingly, the ld. adjudicating authority confirmed the demand of Service Tax of Rs. 13,42,657/- in terms of Section 73(2) of Finance Act, along with applicable interest, in terms of Section 75 of the Act and dropped the remaining demand of Rs. 89,26,491/-; he imposed penalty of Rs. 1,34,266/- i.e., 10% of the total amount confirmed against the appellant-company, in terms of Section 76 of Finance Act and dropped the penal proposals under Sections 77 and 78 of the said Act. 2.6. Aggrieved by the confirmation of the demand of Service Tax, the assessee/company filed appeal. The Revenue has also filed appeal against the dropping of the said demand of Service Tax. 3. During the course of hearing, the appellant-company submitted that while rendering CHA services, they were engaged in processing of documents with respect to clearance of goods through customs station; the provision of CHA service is not a service in respect of which cargo is requ....
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....basis. The appellant-company also mentions that the ld. adjudicating authority has further taken note of the fact that the appellant-company quotes its customer (the ultimate shipper / consignor) a higher or lower rate for transportation of goods on such bulk cargo space purchased from airline/ shipping line based on commercial factors; the rate quoted by the appellant company to the consignor in this contract of carriage is called 'Sell rate' as per industry nomenclature; the contract with customer is also on principal-to-principal basis; the difference between the buy rate and sell rate is the appellant company's margin on trading in such cargo space; such amount is generated by trading in cargo space and by no stretch of imagination, it can be considered as a consideration for rendering 'Custom House Agent's Service'. They thus submit that the Ld. adjudicating authority, after reviewing the documents filed during the course of assessment proceedings especially the contract of carriage issued by the airlines/ appellant-company and invoices issued by the airlines/appellant-company had taken a correct view in determining the freight forwarding activity to be the....
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....le 4(a) of the Place of Provision of Services Rules, 2012 are not applicable to the CHA service rendered by the appellant-company to their foreign clients. Thus, we find that the said service rendered by the appellant-company to the overseas customers falls within the ambit of 'export of services' and consequently, no service tax is payable on such services received abroad. Accordingly, we hold that the demand of Service Tax confirmed under the category of CHA service in the impugned order is not sustainable and therefore, we set aside the same. 6.1. Since, the demand of Service Tax against the appellant-company is not sustained, the question of demanding interest or imposing penalty on them does not arise. 7. Regarding Revenue's appeal against dropping of the demand in respect of freight forwarding service, it is relevant to note that the appellant-company is an international freight forwarder which renders freight forwarding service both for outbound cargo and inbound cargo. The said appellant books cargo space on its own account with airline company/shipping line company for transportation of cargo from the port of loading in one country to the port of release in another c....