2018 (9) TMI 1588 - AT - Service Tax

Business Auxiliary Service - incentives/brokerage received from shipping liners - Extended period of limitation - Held that - In some of the instances, the assessee have collected profit/margin over and above the reimbursable expenses, but in most cases they have not collected it - this aspect requires verification - matter on remand. Similarly, with regard to the disallowance of credit on input service, the same requires to be remanded to the adjudicating authority so as to give a further chance to the assessee to establish whether they are eligible for the credit on these input services. Appeal allowed by way of remand.

Summary

Issues:
1. Short payment of service tax on various services
2. Non-payment of service tax on specific activities
3. Wrong availing of CENVAT Credit on input services

Analysis:

Issue 1 - Short payment of service tax on various services:
The appellant, engaged in providing various services, was found to have not discharged appropriate service tax for the period 01.10.2002 to 31.03.2007. The Department identified short payment of service tax on Custom House Agent (CHA) services and other charges not included in the taxable value. The Original Authority confirmed the demand and penalties, which was partially set aside by the Commissioner (Appeals). The Tribunal upheld the demand for the normal period but remanded the matter for further consideration regarding the collection of margin/profit over reimbursable expenses.

Issue 2 - Non-payment of service tax on specific activities:
The Department alleged non-payment of service tax on brokerage, incentives, commission, and fees received by the appellant for specific activities like arranging cargo, providing containers, and forwarding goods. The Commissioner (Appeals) set aside the demand for the extended period and certain charges, citing legal precedents. The Tribunal upheld the decision regarding incentives from shipping liners but remanded the issue of reimbursable expenses for the normal period for verification.

Issue 3 - Wrong availing of CENVAT Credit on input services:
The appellant availed CENVAT Credit on input services provided by liners, containers, and surveyors not directly used by them. The authorities denied the credit, leading to an appeal. The Tribunal remanded this issue to the adjudicating authority for further verification and consideration, granting the appellant a chance to establish eligibility for the credit.

In conclusion, the Tribunal dismissed the Department's appeal and remanded the appellant's appeal for further consideration on reimbursable expenses and CENVAT Credit issues. The judgment highlighted the importance of verifying actual collection of margin/profit over expenses and the eligibility for CENVAT Credit on input services.