2014 (7) TMI 980 - AT - Service Tax

Cargo Handling Service - Service in respect of amounts collected for Barge operations, collection of Ocean Freight, Air Freight, Transportation charges etc. - Non consideration of submissions of assessee - Held that - Commissioner has left the analytical work to analyse the case of the department, the ground taken in the show-cause notice, reply submitted by the assessee and basis for the conclusion, to the Tribunal - request made by the learned counsel that the matter be remanded at this stage for fresh decision with a direction to record all the submissions, consider them vis-a-vis facts as emerging from the records, apply precedent decisions, if any, cited by the assessee or available to the Commissioner etc. and pass a well reasoned order whereby it would be possible for the appellate authority to consider whether the basis for reaching a conclusion adopted by the original authority is sound and whether the demand can be confirmed or not - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Service tax demand on appellants for providing Cargo Handling Service in relation to various charges collected.

Analysis:
The judgment revolves around the demand for service tax made on the appellants for providing Cargo Handling Service related to amounts collected for Barge operations, Ocean Freight, Air Freight, and Transportation charges. The learned counsel representing the appellants argued that their submissions were not adequately considered by the Commissioner. Specific attention was drawn to paragraphs 19 and 23 of the appeals, highlighting the lack of detailed consideration. In paragraph 19, the advocate for the assessee contended that they are engaged in trading space and booking profit, clarifying the distinction between ocean freight and air freight. The argument was made that barge charges should not be subject to tax, and tax was demanded not just on their margin but also on amounts collected and paid to shipping lines. A calculation was submitted along with a brief note on barge operation. Paragraph 23 emphasized that the assessee was involved in cargo handling operations, handling cargo to reduce vessel draft, which falls under the statutory definition. The contention that amounts received were not taxable under business auxiliary services was rejected due to clear statutory definitions. The Tribunal found the Commissioner's analysis inadequate and remanded the matter for a fresh decision, directing the recording of all submissions, consideration of facts, application of precedent decisions, and passing a well-reasoned order to enable proper review by the appellate authority. The impugned orders were set aside, and the appeals were remanded to the original adjudicating authority to decide the matters afresh while observing principles of natural justice. The operative portion of the order was pronounced in open court on 24.6.2014.