9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (11) TMI 1024 - AT - Service TaxDemand of Service Tax - brokerage and Commission income received from the shipping lines - sale and purchase of freight space - extended period of limitation - penalty - Held that - The issue is covered by the decision in the case of Karam Freight Movers 2017 (3) TMI 785 - CESTAT NEW DELHI , where it was held that The surplus earned by the respondent arising out of purchase and sale of purchase and sale of space and not by acting for client who has space or not on a vessel. It cannot be considered that the respondents are engaged in promoting or marketing the services of any client - demand of service tax on the above amount is set aside. Extended period of limitation - penalty - Held that - Having held that there was a reasonable cause for non-payment of duty, it is just to set aside the invocation of extended period of limitation also in the instant case - penalty also set aside. Appeal allowed - decided in favor of appellant.
Issues:
1. Taxability of brokerage income and special commission. 2. Taxability of Air Commission under BAS. 3. Application of extended period of limitation for demand of service tax. 4. Relevance of exemption notification for Air Commission. 5. Basis of demand on accrual basis vs. receipt of income basis. Issue 1: The appellant contested the demand of service tax on brokerage income and special commission, arguing that the activities involved trading of freight space in shipping lines, not promoting the services of any provider. The appellant relied on various decisions supporting their stance. The Tribunal referenced precedents like Continental Carriers and Karam Freight Movers, emphasizing that mere sale and purchase of cargo space for profit does not constitute a taxable activity under the Finance Act, 1994. Following these rulings, the Tribunal found no merit in the demand for service tax on brokerage and commission income from shipping lines related to the sale and purchase of freight space. Issue 2: Regarding the taxability of Air Commission under BAS, the Commissioner (A) had set aside the penalty, noting the element of doubt and subsequent clarification from DGST post-litigation. The Commissioner (A) observed reasonable cause for the appellant's actions and waived penalties under sections 76 and 78 of the Finance Act, 1994. Consequently, the Tribunal found it just to set aside the demand and allow the appeal concerning Air Commission. Issue 3: The appellant argued against the invocation of the extended period of limitation for the demand of service tax. The Tribunal considered the reasonable cause for non-payment of duty in the case of Air Commission and decided to set aside the extended period of limitation, ultimately leading to the demand being set aside and the appeal being allowed. Issue 4: The appellant asserted entitlement to exemption under notification no. 13/2003-ST for the Air Commission. However, the Tribunal's decision did not explicitly address the relevance or applicability of this exemption in the judgment. Issue 5: The appellant raised a concern regarding the demand being based on the trial balance sheet prepared on an accrual basis, emphasizing that service tax should be demanded based on the receipt of income at the material time. While this argument was presented, the Tribunal's decision did not delve into this issue specifically in the judgment.
|
