2018 (3) TMI 112 - AT - Service Tax

Clearing and Forwarding Agency Service - abatement - Whether the service rendered by the appellant is a composite service under C F Agency Service or whether these are separate services so as to levy service tax separately? Held that - The name of the consignee is shown as M/s. HUL. Thus the appellant has furnished necessary document before the authorities below to show that HUL has discharged service tax liability on GTA service. In that case the ancillary charges of loading and unloading as well as halting charges which are part and parcel of GTA service cannot be included in C F Agency service - the loading and unloading charges as well as halting charges have been subject to levy of service tax in GTA services. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether loading and unloading charges and halting charges should be included in the service tax under C&F agency service.
2. Whether the services provided by the appellant are composite services or separate services for the purpose of levy of service tax.

Analysis:
1. The appellants were providing C&F agency service to a company and were registered with the Service Tax Department. A show cause notice was issued proposing a demand of service tax on the grounds of not including loading, unloading charges, and halting charges in the service tax calculation. The original authority confirmed the demand, leading to the appeal.
2. The appellant argued that they provided C&F Agency service and Goods Transport Agency (GTA) service under separate contracts. They contended that these services were not composite and loading, unloading, and halting charges were part of GTA service, on which they were eligible for abatement. The appellant provided evidence of service tax paid on GTA service by the consignee, which was specifically mentioned in the consignment note.
3. The department argued that under Section 65A, in the case of composite services, the dominant service should be identified for levy of service tax. They claimed that C&F Agency service was the dominant service, and therefore, loading, unloading charges, and halting charges should be included in the service tax without abatement.
4. The Tribunal considered whether the services provided were composite or separate. It was noted that the appellant had separate contracts for C&F Agency service and GTA service with the consignee discharging service tax liability on GTA service. The Tribunal found that the loading, unloading, and halting charges, being part of GTA service, should not be included in the C&F Agency service for service tax calculation.
5. The Tribunal held that the demand was not sustainable as the loading, unloading, and halting charges had already been subject to service tax under GTA services. The impugned order was set aside, and the appeal was allowed.

This analysis highlights the key arguments presented by both parties, the application of relevant legal provisions, and the Tribunal's decision based on the facts and evidence presented during the proceedings.