2019 (11) TMI 680 - AT - Service Tax

Levy of service tax - Steamer Agent Service - appellant is engaged in providing services in the nature of clearing and forwarding, business auxiliary and logistics management pertaining to import and export of cargo - Business Auxiliary services - HELD THAT - Revenue has failed to bring any evidence on record while issuing the SCN and while passing the impugned order which justifies the categorization of appellant in the definition of Steamer Agent . Further, the impugned order is contradictory because Learned Commissioner (A) in the impugned order has, in fact, admitted that the appellant has not provided any Steamer Agent Service but still confirms the demand on the ground that the appellants are carrying out ancillary activity, that of a steamer agent - Also, with regard to the same nature of service, the Department has classified under two different services, namely, Steamer Agent Service and Business Auxiliary Service which is also not tenable in law. Further, the Department is seeking to demand Service Tax on the freight element also which is not tenable in law . Business Auxiliary Service - HELD THAT - Learned Counsel has stated that they have paid the Service Tax along with interest therefore they did not press the demand under this Head. Service Tax demand of Steamer Agent Service is set aside and Service Tax demand of Business Auxiliary Service is upheld - penalty imposed under Business Auxiliary Service is set aside as they have paid the tax along with interest - appeal allowed in part.

Summary

Issues:
- Whether the appellant is liable to pay Service Tax under the category of 'Steamer Agent Service'?
- Whether the appellant is liable to pay Service Tax under the category of 'Business Auxiliary Service'?

Analysis:

Issue 1: Liability under 'Steamer Agent Service'
The appellant, engaged in providing logistics management services, was accused by the Revenue of providing 'Steamer Agent Services'. The appellant argued that they do not fall under the definition of 'Steamer Agent' as they do not perform any act falling within the specified categories. The Tribunal noted that the Revenue failed to provide evidence justifying the categorization of the appellant as a 'Steamer Agent'. The impugned order was contradictory as it admitted that the appellant did not provide 'Steamer Agent Service' but still upheld the demand based on ancillary activities. Citing legal precedents, the Tribunal emphasized that the onus of proving taxability lies with the Department, which they failed to establish. The Department's attempt to demand Service Tax on the freight element was deemed untenable. The Tribunal concluded that the demand under 'Steamer Agent Service' was not sustainable in law, setting it aside.

Issue 2: Liability under 'Business Auxiliary Service'
Regarding the 'Business Auxiliary Service', the appellant had paid the Service Tax along with interest, indicating compliance. The confusion surrounding the taxability of commissions received from airlines during the relevant period was acknowledged. The penalty imposed under 'Business Auxiliary Service' was set aside due to the absence of malicious intent, given the payment of tax along with interest. The Tribunal upheld the Service Tax demand under 'Business Auxiliary Service'.

In conclusion, the Tribunal partly allowed the appeal, setting aside the Service Tax demand under 'Steamer Agent Service' while upholding the demand under 'Business Auxiliary Service'. The judgment was pronounced on 14/11/2019.