2018 (6) TMI 593 - AT - Service Tax

Classification of services - respondents herein received commissions from container liners for providing services to them - case of Revenue is that the services fall under the head Business Auxiliary Services w.e.f. 09.07.2004 - whether the services are classified under the head Business Auxiliary Services or under the head Steamer Agent Services? - Held that - In view of the statutory definition given to the Steamer Agent Services under the Service Tax Act it is not found that the services rendered to container lines can also be included under this definition - the services falls more correctly under the business auxiliary services - also the instruction of CBEC dated 17th August 2011 specifically excludes classification issued and hence does not cover the present issue - appeal allowed - decided in favor of appellant.

Summary

Issues:
Revenue's appeal against setting aside of Orders-in-Original confirming demands and penalties for service tax on commissions received from container liners. Classification of services under "Business Auxiliary Services" or "Steamer Agent Services." Applicability of CBEC threshold for appeal. Interpretation of statutory definitions.

Analysis:
1. The appeal was filed by the Revenue against the setting aside of Orders-in-Original confirming demands and penalties for service tax on commissions received from container liners. The case revolved around whether the services provided by the appellants fell under "Business Auxiliary Services" or "Steamer Agent Services" as per the Service Tax Act.

2. The Commissioner (Appeals) set aside the Orders-in-Original, concluding that the commissions received by the assessee from container liners and the services provided by them were akin to "Steamer Agent" services, falling outside the scope of "Business Auxiliary Services." The definitions of "Business Auxiliary Service" and "Steamer Agent" under the Service Tax Act were crucial in determining the classification.

3. The Department's appeal contested the classification, arguing that the services provided to container lines should be classified under "Business Auxiliary Services" as the appellants were not dealing directly with shipping lines. The Department challenged the applicability of a precedent cited by the assessee and emphasized the distinction between services to shipping lines and container lines.

4. During the hearing, the Department reiterated its arguments, while the respondents highlighted the specificity of classifying services as "Steamer Agents" and the threshold set by the CBEC for filing appeals. The respondents emphasized that the commissions were received specifically from container lines for booking containers.

5. The Tribunal examined the nature of services provided to container lines and the commissions received for such services. It differentiated between shipping lines and container lines, noting that the services rendered to container lines did not align with the statutory definition of "Steamer Agent Services." The Tribunal also addressed the CBEC threshold issue, clarifying that it did not apply to the present case.

6. Based on the analysis, the Tribunal found that the services provided to container lines were correctly classified under "Business Auxiliary Services" and not "Steamer Agent Services." Consequently, the Commissioner (Appeals) order was set aside, and the appeal by the Revenue was allowed.

This detailed analysis of the judgment highlights the key legal arguments, interpretations of statutory definitions, and the Tribunal's reasoning behind setting aside the Commissioner (Appeals) order.