2018 (9) TMI 1893 - HC - Service Tax

Maintainability of appeal - Classification of services - Business auxiliary services or not - amounts received on purchase and sale of cargo space on ships - HELD THAT - The issue is of valuation and the remedy in terms of Section 83 of the Finance Act, 1994 r/w Section 35G(1) and 35L(1)(b) of the Act would not be maintainable before this Court - The appeal in respect of the same would be to the Hon'ble Supreme Court as it is an issue dealing with the valuation of services. Appeal dismissed being not maintainable.

Summary

Issues Involved:
1. Interpretation of distinct business activities related to cargo space and booking services.
2. Determination of whether bulk booking of cargo space constitutes sale of goods under Sale of Goods Act, 1930.
3. Classification of services as Business Auxiliary Service under the Finance Act, 1994.

Analysis:
1. The appeal challenged a Customs, Excise and Service Tax Appellate Tribunal order regarding the distinction between the appellant's contract for cargo space and booking cargo services. The main contention was whether both services, despite being related and termed as "Freight Charges," constitute distinct business activities. The Tribunal's decision on this issue was a focal point of the appeal.

2. Another issue raised was whether bulk booking of cargo space by the appellant amounts to the purchase or sale of such space under the Sale of Goods Act, 1930. This question aimed to determine the legal classification of the appellant's activities in relation to cargo space transactions.

3. The respondent, registered under the Finance Act, 1994, provided Business Auxiliary Service as defined under Section 65(19) of the Act. The appellant engaged in contracts with Shipping Lines for cargo carriage and earned income from booking cargo space on ships under the head "Ocean Freight." The issue revolved around whether the consideration received for the purchase and sale of cargo space was part of the services rendered under Business Auxiliary Services. The valuation of services rendered by the appellant in booking cargo on a commission basis under Business Auxiliary Services was a critical aspect of the case.

4. The crux of the matter was the valuation of services, and it was determined that the remedy under Section 83 of the Finance Act, 1994 read with Section 35G(1) and 35L(1)(b) of the Act was not maintainable before the High Court. It was highlighted that issues related to service valuation would be appealable to the Supreme Court. Consequently, the appeal was disposed of based on the above considerations, emphasizing the jurisdictional aspect related to service valuation disputes.