2013 (8) TMI 453 - AT - Service Tax

Condonation of Delay - The Revenue had filed the COD application for condonation of delay of 22 days in filing the cross objection Held that - Considering the reasons stated as satisfactory the delay in filing the cross objection was condoned - The delay was due to delay in receipt of comments from the lower formations for filing the cross objection. Business Auxiliary Services Held that - Assesses were freight forwarders and booking cargo spaces and selling the same to the importers/exporters - They were rendering a service to the shipping lines and the consideration was received by them by way of mark-up in prices -services rendered by the assesse merits classification under Business Auxiliary Service - the assesse was promoting the service rendered by the shipping lines JSA Forwarders vs. CST Chennai 2008 (10) TMI 105 - CESTAT CHENNAI . Waiver of Pre-deposit - Prima facie the appellant had not made out a case for complete waiver of pre-deposit of dues adjudged against them In the absence of any prima facie case and the absence of any financial hardship the interest of Revenue has to be taken care of 89Lakhs were ordered to be submitted as pre-deposit upon such submission rest of the duty to be waived Stay Granted Decided partly in favor of assesse.

Summary

Issues:
1. Condonation of delay in filing cross objection
2. Classification of services provided by the appellant as "Business Auxiliary Services"
3. Applicability of service tax on the activities of the appellant

Analysis:
1. The Revenue filed a COD application for condonation of delay in filing the cross objection, citing reasons for the delay due to awaiting comments from lower formations. The Tribunal, finding the reasons satisfactory, condoned the delay.

2. The appellant, a freight forwarding agency, was alleged to be promoting services rendered by shipping lines, leading to a service tax demand. The appellant argued that their activities were trading and as a multi-model transport operator, the charges should be considered as "freight," exempt from service tax. The appellant cited various legal precedents to support their case.

3. The Tribunal noted that booking and trading in cargo space constitute services, not goods. It rejected the appellant's arguments that they were engaged in trading, not service activities. The Tribunal also dismissed the relevance of legal precedents cited by the appellant, stating they did not apply to the current case. The Revenue contended that the appellant's mark-up in prices from selling cargo space to importers/exporters constituted a service, classifiable under "Business Auxiliary Service."

4. The Tribunal referenced previous cases where the sale of cargo space was classified under Business Auxiliary Service, indicating that the appellant's activities might fall under this classification. The Tribunal found no merit in the appellant's arguments for a complete waiver of dues, directing them to make a pre-deposit of Rs. 89 lakhs within eight weeks. Non-compliance would result in dismissal of the appeal without further reference to the Tribunal.

In conclusion, the Tribunal upheld the service tax demand against the appellant, requiring a pre-deposit of dues while staying the recovery during the appeal's pendency. The judgment emphasized the classification of the appellant's activities as services, not trading, under the category of Business Auxiliary Service.