2018 (7) TMI 1001 - AT - Service Tax

Business Auxiliary Services - appellants have been appointed by the Airlines as Air Cargo Agent for supporting professional line of work relating to booking and transportation of cargo preparing bills collecting them realizing the payments etc - Benefit of Notification No. 13/2003. Held that - he appellant sought to rely on the decision of the Tribunal in the case of Greenwich Meridian Logistics 2016 (4) TMI 547 - CESTAT MUMBAI . In the case the facts of the case involved the appellant claiming pre-booking and trading of space in Aircraft. In the instant case no such claim has been made before the lower authorities or even in Tribunal. In view of that the facts of the case are different and therefore the said decision have no applicability in the instant case - demand under the head Business Auxiliary Service upheld. Benefit of Notification No. 13/2003 - Held that - It is seen that only commission agent involved in purchase and sale of goods were exempted by virtue of this notification. In the instant case there is no purchase and sale of goods and therefore the said notification does not apply to this case. Time Limitation - Held that - The Commissioner (Appeals) in her order has specifically observed that there was an element of doubt at the material time as is evidence by the litigation and clarification of DGST in these circumstances invocation of extended period of limitation is not justified. Appeal allowed in part.

Summary

Issues:
Confirmation of demand of duty, interest, and penalty under Sections 76, 77, and 78 of the Finance Act, 1994 for a company acting as an Air Cargo Agent.

Analysis:
The appellant, a company approved by IATA as an Air Cargo Agent, appealed against the demand of duty, interest, and penalty imposed by the Revenue. The company acted as an Air Cargo Agent for various Airlines, receiving commissions for marketing and canvassing cargo space. They did not issue invoices but used blank Airway bills supplied by the Airlines. The Revenue alleged that their activities fell under Business Auxiliary Service taxable from July 1, 2003. The company was registered under this category since March 30, 2005, paying Service Tax regularly from September 10, 2004. However, they did not pay Service Tax between July 1, 2003, and September 9, 2004.

The original adjudicating authority confirmed the demand, but the Commissioner (Appeals) set aside the penalty, citing doubt. The appellant argued that Air Cargo Agent services should not be taxed as Business Auxiliary Service, referring to Tribunal decisions. They also claimed exemption under Notification No. 13/2003 and questioned the taxation of Airway Bill fee, PCS charges, and Due Agent charges. The appellant contended that the demand was time-barred and highlighted the Commissioner's acknowledgment of doubt and lack of intention to evade tax.

The Tribunal noted that the appellant's reliance on previous cases was misplaced as the facts differed. Regarding the exemption notification, it clarified that it applied to commission agents involved in the sale or purchase of goods, not applicable in this case. The Tribunal rejected the appellant's argument that charges were received from shippers/exporters, emphasizing that the company acted as an agent of the Airlines. The Tribunal also agreed with the Commissioner that doubts existed, ruling against the extended period of limitation for the demand.

Ultimately, the Tribunal allowed the appeal, setting aside the demand beyond the normal limitation period. The judgment was pronounced on June 7, 2018, in favor of the appellant, M/s Dixon Cargo Consolidators Pvt. Ltd.