2014 (6) TMI 798 - AT - Service Tax

Waiver of pre deposit - valuation - Steamer Agent s Service - inclusion of various charges collected - Advance Manifest Charges (AMS), Bunker Surcharges (BS) and Currency Adjustment Factor (CAF) Charges from the Shippers in India and transferred the said amounts to the Overseas Liner - Business Support Service - Held that - prima facie, the Applicant could able to show that Bunker Surcharges (BS) and Currency Adjustment Factor (CAF) Charges are nothing but the charges relating to Ocean Freight, which though collected by them on behalf of the overseas liner from the Indian shippers, but transferred in its entirety to the liners. Also, prima facie, we find that the Collection/Commission Charges against these services rendered by the Applicant to the Overseas Liners, had been included in the Steamer Agent s Services and appropriate service tax were duly discharged by the Applicant. In these circumstances, the Applicant could able to make out a prima facie case for total waiver of predeposit of the dues adjudged. Accordingly, predeposit of all dues adjudged is waived and its recovery stayed during the pendency of the Appeal - Stay granted.

Summary

Issues: Application for waiver of predeposit of Service Tax and penalty under Section 78 of the Finance Act, 1994.

Analysis:
1. Nature of Charges: The Applicant collected Advance Manifest Charges (AMS), Bunker Surcharges (BS), and Currency Adjustment Factor (CAF) Charges from Indian Shippers on behalf of an Overseas Liner, M/s. APL (India) Pvt. Ltd. The Revenue contended that these charges fall under 'Business Support Service' as per Section 65(105)(zzzq) of the Finance Act, 1994.

2. Contentions of the Applicant: The Applicant argued that Bunker Surcharges (BS) and Currency Adjustment Factor (CAF) Charges are components of Ocean Freight not subject to service tax. They maintained that the entire amount collected was transferred to the Overseas Liner, with 'Collection Charges' included in the 'Steamer Agent's Services' billed to the Liner, and appropriate service tax was paid. The Applicant referenced a Tribunal decision supporting their stance.

3. Revenue's Position: The Revenue acknowledged that Bunker Surcharges (BS) and Currency Adjustment Factor (CAF) Charges are part of Ocean Freight and that 'Collection Charges' were included in the 'Steamer Agent's Service Charges, with service tax duly discharged. However, they upheld the findings of the Adjudicating Authority.

4. Tribunal's Decision: After hearing both sides and examining the records, the Tribunal found that the Applicant demonstrated prima facie that Bunker Surcharges (BS) and Currency Adjustment Factor (CAF) Charges were related to Ocean Freight and were entirely transferred to the Overseas Liner. They noted that 'Collection/Commission Charges' were included in the 'Steamer Agent's Services' with proper service tax payment. Consequently, the Tribunal granted a total waiver of predeposit of the dues adjudged and stayed the recovery during the appeal's pendency.

In conclusion, the Tribunal ruled in favor of the Applicant, granting a waiver of predeposit of Service Tax and penalty under Section 78 of the Finance Act, 1994, based on the arguments presented regarding the nature of charges collected and their relation to Ocean Freight, along with the proper discharge of service tax obligations by the Applicant.