2014 (6) TMI 203 - AT - Service Tax

Demand of Service Tax - profit earned on Ocean Freight Charges on exports and imports - Business Auxiliary service - Held that - in regard to the demand of service tax on the profit earned on Ocean Freight Charges, the appellants and their counterparts in different countries do not prima facie appear to be taxable under the Head Business Auxiliary Service . As such, the pre-deposit of the demand relating to this issue is waived during the pendency of the appeal. As regards the other two issues at (ii) and (iii) above, learned counsel volunteers to pre-deposit the entire amount of service tax amounting to Rs. 6,90,702 - Conditional stay granted.

Summary

Issues involved:
1. Demand of Service Tax on profit earned on Ocean Freight Charges on exports and imports under "Business Auxiliary Service."
2. Demand of service tax on brokerage from shipping line and airlines.
3. Denial of Cenvat credit.

Analysis:

1. Demand of Service Tax on profit earned on Ocean Freight Charges:
After a detailed hearing, it was observed that the appellants and their counterparts in different countries do not seem to be taxable under the Head "Business Auxiliary Service" concerning the profit earned on Ocean Freight Charges. Consequently, the pre-deposit of the demand related to this issue was waived during the pendency of the appeal.

2. Demand of service tax on brokerage from shipping line and airlines:
The learned counsel representing the appellants agreed to pre-deposit the entire amount of service tax, totaling Rs. 6,90,702, related to this issue. The Tribunal accepted this offer and directed the appellants to make the pre-deposit within four weeks from the date of the order. Compliance was to be reported by a specified date. Upon meeting this requirement, the need for pre-deposit of the remaining amount would be waived during the appeal process.

3. Denial of Cenvat credit:
No specific ruling or direction was provided in the judgment regarding the denial of Cenvat credit. The focus of the decision primarily revolved around the two issues mentioned above related to service tax demands, with clear instructions given for pre-deposit in one instance and waiver in the other. The judgment did not delve into the Cenvat credit denial aspect in detail.

In conclusion, the Tribunal analyzed the issues of service tax demands on Ocean Freight Charges and brokerage from shipping line and airlines meticulously, providing specific directives for pre-deposit based on the circumstances of each issue. The decision showcased a balanced approach by waiving pre-deposit for one issue while requiring it for the other, ensuring compliance and further proceedings during the appeal process.