2014 (8) TMI 147 - AT - Service Tax

Taxability of Break Bulk Fees - Scope of show cause notice - SCN was issued to demand under the category of Transport of goods by air service - demand was confirmed under the category of Cargo handling service - Held that - The appellants were not put to notice regarding confirming the demand under the category of cargo handling service whereas in the show cause notice the demand was on the ground that the appellants were providing transportation of goods by air service. In these circumstances, we have no hesitation to say that the impugned order is beyond the scope of show cause notice. - Demand set aside - Decided in favor of assessee.

Summary

Issues:
1. Confirmation of demand of service tax on various taxable services.
2. Dispute regarding Break Bulk Fees (BBF) and its classification.
3. Applicability of demand under cargo handling service.
4. Consideration of exported goods in relation to BBF.
5. Rejection of evidence regarding deposit of service tax.
6. Verification of deposit amount and consequential penalties.

Analysis:

1. The appellant contested an appeal against an order confirming a service tax demand of &8377; 10,75,21,055/- along with interest and penalties for providing taxable services like Break Bulk Fees, Software costs, Insurance Charges, Network Membership Fees, Group Centre and Regional Office expenses, and ISO Expenses. The Revenue alleged non-payment of appropriate service tax on these services.

2. The appellant acknowledged paying service tax on all services except Break Bulk Fees (BBF). Evidence of depositing &8377; 6,23,13,126/- was presented, but not considered by the adjudicating authority due to non-production during investigation. The appellant disputed the BBF demand, arguing it was not under 'transport of goods by air service' and that the consideration pertained to exported goods, not cargo handling service.

3. The Revenue justified the demand based on cargo handling service, relying on the lower authority's findings. However, the Tribunal observed that the demand was made under 'transportation of goods by air service,' not cargo handling service. As the appellant was not an aircraft operator, the demand under cargo handling service was beyond the scope of the show cause notice, leading to setting aside the demand and penalties.

4. Regarding the disputed deposit of &8377; 6,23,13,126/-, the Tribunal found that evidence was submitted to the Joint Director General of Central Excise Intelligence, contradicting the adjudicating authority's claim of non-production during investigation. The matter was remanded for verification of the deposit and consequential penalties, if applicable, by the adjudicating authority.

5. In conclusion, the Tribunal set aside the demand related to BBF due to misclassification and lack of notice consistency, while directing verification of the deposit amount and consequential penalties. The appeal was disposed of accordingly, emphasizing the need for proper verification and adherence to procedural requirements.