9911796707
TMI Blog2012 (10) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... ice.. During the audit it was noticed that the appellant had received sea freight commission/brokerage at the rate of 2% on ocean freight under pre-paid terms from the liner/carrier/forwarder for availing their service to various destinations in connection with supporting of their business of liner/carrier/forwarders during the course of providing output service during 2004-05 to 2007-08. It appeared that the appellant is liable to pay Service tax on such commission/brokerage under Business Auxiliary Service. The appellant neither paid service tax on such commission/brokerage nor disclosed the fact of such receipts to the Department voluntarily or in any manner. Hence, a Show Cause Notice proposing to demand Rs. 1,82,864/- towards Service t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder any service to them. Thus in the present case service provider and client relationship between the appellant and the ship liners is absent. (iii) that to be classified as commission agent one has to act on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration. The appellant is neither a spokesperson, representative nor they have been appointed as agent of the Shipping liners for doing something on behalf of the liners. The appellant is a Custom House Agent doing the business of clearing the cargo of the importers/exporters and engaged the forwarders for facilitating the movement of cargo. (iv) that the amount received from the liners is in the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or there should be suppression or concealment of the value of taxable service. The appellant are still under the bonafide belief that they are not liable to pay service tax under "Business Auxiliary Service". As appellant had no intention to evade payment of service tax, no penalty is imposable. 4. Personal hearing was held on 20-7-2011. Shri R. Srinivasan, Consultant appeared on behalf of the appellant. Despite intimation no one has appeared from the Department side. 4.1 The Advocate submitted the following :- (a) that 2% commission/incentive received from shipping line/freight forwarder cannot be taxed under BAS and has relied on the following decisions in this regard, (i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Goods Transport Agency service. It is an undisputed fact that the appellant was filing returns and paying service tax regularly for the above two services. I find force in the argument of the appellant that when the returns are regularly filed and service tax duly paid, the question of suppression of facts does not arise as the Department is aware of the activities of the appellant. Thus the point of suppression of facts raised by the Department fails and the extended period of time limit cannot be invoked in the case The period of dispute in the instant case is from 2004-05 to 2007-08. The SCN for the disputed period was issued on 15-12-2008. Thus, the demand for the period 2004-2005 to 30-11-2007 is totally time barred. The demand for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not taxable. In fact the appellants are secondary service providers for the shipping lines, so they would not be covered in view of the Board's circular. Therefore, we are of the view that the brokerage commission of 2% paid for booking of export cargo cannot be taxed under the category 'Business Auxiliary Services'." 5.4 In the instant case, the primary service of the appellant is CHA and the booking of export cargo with Shipping lines is their secondary service. Thus drawing sustenance from the ratio of decision in the above cited case law, I hold that the appellant is not liable to pay Service tax on the 2% incentive/commission received from shipping lines/freight forwarders. 5.5 Further, the appellant had stated in his app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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