9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (8) TMI 600 - AT - Service TaxCHA service - charges collected as Break bulk fee - Held that - similar issue decided in the appellant own case 2009 (3) TMI 158 - CESTAT BANGALORE where it was held that the activity relating to one of the categories could not be subjected to service tax under any other category. In other words the activities relating to Freight forwarding cannot be brought under CHA - the demand of service tax under the head of CHA service for the revenue earned under the head of Break Bulk Fee is set aside. Business Auxiliary Service - freight rebate - Held that - It is apparent that collection or recovery of cheques accounts and remittance is specifically covered under BAS. In view of that activity of collecting remittances by the appellant for a fee would fall under this category of service as BAS. In view of above the demand of service tax on the Revenue streams of CCX Fee is upheld. CENVAT credit - denial on the ground that the documents on the basis of which credit was taken or not in the name of the appellant - Held that - the only error is that instead of the appellant address at Gurgaon the address of Mumbai is mentioned. The show cause notice seeks to deny credit on the ground that these addresses are not disclosed under the list of Branch Officers. Show cause notice does not challenge the receipt of use of the service. Since the invoices are in the name of appellant themselves and the receipt of service by the appellant have not challenged credit on the same cannot be denied merely because of a different address being shown - credit allowed. Appeal allowed - decided partly in favor of appellant.
Issues Involved:
1. Break bulk fee as CHA service. 2. Freight rebate as Business Auxiliary Service (BAS). 3. Airline Commission as BAS. 4. Airline Incentive as BAS. 5. CCX fee as BAS. 6. Reversal of Cenvat Credit due to improper documentation. 7. Invocation of extended period for demand and imposition of penalties. Detailed Analysis: 1. Break Bulk Fee as CHA Service: The appellant contested the demand of service tax under CHA service for revenue earned as Break Bulk Fee. The Tribunal referenced its previous decision in the appellant's own case (2010 (17) STR 266 (Tri.-Bang.)), which clarified that activities related to freight forwarding cannot be subjected to service tax under CHA services. The Tribunal concluded that the Break Bulk Fee should not be included under CHA services, thus setting aside the demand. 2. Freight Rebate as Business Auxiliary Service (BAS): The appellant argued that freight rebate income was generated from buying cargo space in bulk and selling it, involving no third party except the appellant and the carriers. The Tribunal agreed, stating that for a service to fall under BAS, a third party (client) must be involved. Since there was no client involved, the demand under BAS was unsustainable and was therefore set aside. 3. Airline Commission as BAS: The Tribunal examined the income under Airline Commission and Airline Incentive. It was determined that these were generated from the appellant's activities of buying and selling space in airlines, not on behalf of clients but for their own trading. The Tribunal noted that for an activity to be taxable under BAS, it must involve three parties: the service provider, the service recipient, and the client. Since only two parties were involved (the appellant and the airline), the demand under BAS was set aside. 4. Airline Incentive as BAS: Similar to the Airline Commission, the Tribunal found that Airline Incentives were based on the volume of business and were not for promoting or marketing services to clients. Therefore, this income could not be taxed under BAS. The demand under BAS for Airline Incentive was also set aside. 5. CCX Fee as BAS: The appellant received CCX Fees for handling freight and related formalities. The Tribunal noted that the show cause notice did not specify the sub-head under BAS for this demand. However, the definition of BAS includes "collection or recovery of cheques, accounts, and remittance." Since the appellant's activities involved collecting remittances, the Tribunal upheld the demand of service tax on CCX Fees under BAS. 6. Reversal of Cenvat Credit: The appellant was denied Cenvat credit on documents not in their name or with the Mumbai address instead of Gurgaon. The Tribunal found that the invoices were indeed in the appellant's name and the receipt of services was not contested. Credit could not be denied merely due to a different address. However, credit was denied for invoices not in the appellant's name. 7. Invocation of Extended Period and Penalties: The appellant argued that the entire demand was beyond the normal period of limitation. The Tribunal partially allowed the appeal, limiting penalties to the confirmed demand related to CCX Fees and revising penalties for wrongly availed credit accordingly. Conclusion: The Tribunal set aside the demands under CHA service for Break Bulk Fee, and under BAS for Freight Rebate, Airline Commission, and Airline Incentive. The demand under BAS for CCX Fees was upheld. The Tribunal also revised penalties related to Cenvat credit and partially allowed the appeal.
|
