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2022 (1) TMI 1175 - AT - Service TaxValuation of services - support services of business or commerce BSS or not - treatment of mark up, being, difference between the amount paid by the Appellant to the Shipping Lines/Airlines and the amount recovered by the Appellant from the customers (exporter/importers) - applicability of negative list regime - HELD THAT - Reliance placed in the case of BHUVANESWARI AGENCIES (P) LTD. VERSUS COMMR. OF C. EX., BANGALORE 2007 (7) TMI 665 - CESTAT BANGALORE where it was held that It cannot be broad enough to bring in a specified activity which has been delineated under steamer agent under the definition of Steamer Agent under Section 65(100) which specifically covers in its item 2. i.e., to book, advertise or canvas for cargo for or on behalf of a shipping line . This decision was distinguished by the Commissioner (Appeals) in the case of the appellant where it was held that Appellants are neither booking nor advertising nor canvassing for cargo for and on behalf of shipping line. Their activities are confined to mere purchase and sale of space on board a ship which alone will not make the Appellants a steamer agent. Therefore, the ratio of the Hon'ble CESTAT decision in the case of Bhuvaneshwar Agencies (P) Ltd. Vs.CCE is not applicable in the present case. The decision in D. Pauls Consumer Benefit Ltd . 2017 (3) TMI 1019 - CESTAT NEW DELHI was overruled by Larger Bench of the Tribunal in Kafila Hospitality Travels Pvt. Ltd. v/s Commissioner, Service Tax, Delhi 2021 (3) TMI 773 - CESTAT NEW DELHI . It has been stated that the aforesaid order of appellant own case was accepted by the Department and no appeal was filed - appeal allowed - decided in favor of appellant.
Issues:
1. Appeal against order dated 31.08.2018 passed by Commissioner (Appeals) by M/s Bhatia Shipping Pvt. Ltd. 2. Show cause notice dated 05.01.2016 for the period 01.04.2014 to 31.03.2015. 3. Show cause notices dated 24.09.2012, 22.10.2013, and 19.01.2015 for different periods. 4. Appeal dismissal by Commissioner (Appeals) for both Service Tax Appeals. 5. Tax liability on the "mark-up" charged by the Appellant. 6. Appellant's engagement in freight forwarding, clearing, and forwarding activities. 7. Interpretation of the term "support services of business or commerce [BSS]" under section 65(104) of the Finance Act, 1994. 8. Precedents cited by both parties - Satkar Logistics, Bhuvaneswari Agencies, and D. Pauls Consumer Benefit Ltd. 9. Division Bench decisions in Greenwich Meridian Logistics and Karam Freight Movers. 10. Tribunal's decision in Bhuvaneswari Agencies (P) Ltd. and D. Pauls Consumer Benefit Ltd. 11. Overruling of D. Pauls Consumer Benefit Ltd. by the Larger Bench in Kafila Hospitality & Travels Pvt. Ltd. Analysis: The Appellate Tribunal CESTAT MUMBAI heard the appeals filed by M/s Bhatia Shipping Pvt. Ltd. against the order dated 31.08.2018 passed by the Commissioner (Appeals). The appeals challenged the dismissal of orders dated 08.01.2016 and 26.04.2016 by the Additional Commissioner. In Service Tax Appeal No. 88100 of 2019, a show cause notice was issued for the period 01.04.2014 to 31.03.2015, with the demand being confirmed by the Additional Commissioner. In Service Tax Appeal No. 88102 of 2019, three show cause notices for different periods were adjudicated upon, with demands confirmed for two notices. The Department contended that the "mark-up" charged by the Appellant was taxable under the category of "support services of business or commerce [BSS]" under the Finance Act, 1994. The Appellant, engaged in freight forwarding activities, argued that they were only trading in space and not providing services. The Department relied on precedents like Bhuvaneswari Agencies and D. Pauls Consumer Benefit Ltd. to support their stance. However, the Division Bench noted that the issue had been previously settled in cases like Greenwich Meridian Logistics and Karam Freight Movers. The Tribunal referred to the decision in Satkar Logistics, where it was held that the Appellant was not providing services but trading in space. The Tribunal also mentioned the overruling of D. Pauls Consumer Benefit Ltd. by the Larger Bench in Kafila Hospitality & Travels Pvt. Ltd. Ultimately, the Tribunal set aside the order dated 31.08.2018 passed by the Commissioner (Appeals) and allowed both appeals, stating that the impugned order could not be sustained based on the reasons presented during the proceedings. The decision was pronounced in the open court on 27.01.2022.
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