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TMI Blog2016 (9) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is beyond the period of limitation from the date of issuance of the show cause notice in this appeal is hit by limitation while the demand within the limitation period in this appeal is liable to be upheld and confirmed. Invokation of extended period of limitation - Demand - Evasion/short-payment of service tax - Business Auxiliary Service viz., net income earned as a freight forwarder - appellant earned additional amount from their clients on the space which has been booked by the appellant with particular shipping lines - Held that:- the appellant books the space and make payment to the shipping line in advance and/or, as and when the bills is raised, and sells the same to their customers at a profit. The appellant is not rendering any service either to the shipping line or to its customers, more so, under business auxiliary service. This view of ours is fortified by the decision of this very same bench in the case of Greenwich Meridian Logistics (India) Pvt. Ltd. [2016 (4) TMI 547 - CESTAT MUMBAI] and by a coordinate bench of this Tribunal in the case of DHL Lemuir Logistics Pvt. Ltd. Since the issue involved in this case is already decided against the Revenue, respectfu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes, freight forwarders/freight consolidators for which they charge an amount from the clients under various heads. The appellants are registered with the service tax department for rendering of service like clearing and forwarding agency service, storage and warehousing service, business auxiliary service (BAS), business support service and transport of goods by road service. Investigation was carried out against the appellant for the evasion/short-payment of service tax for the various services rendered. After recording various statements, it was noticed by the department that during the period April 2004 to March 2009 appellant had not discharged correct service tax in respect of the services rendered by them. By coming to such a conclusion, a show cause notice dated 22nd April 2010 was issued by invoking the extended period of limitation directing the appellant to show cause as to why service tax demand be not raised on the following amounts received: i. airline incentives income; ii. net/surplus income earned as freight forwarder; iii. Income earned as charge collection fees. 3. Revenue wanted to tax the above amounts under business auxiliary service. Appellant con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9) STR 101 (Tri.-Bang.) will be applicable and relies upon the decision for the proposition that the amounts which have been received by them from the airlines are incentives and hence not taxable under business auxiliary service. 4.3. As regards the demand of service tax on the income earned as charge collection fees he would submit that, charge collection fees is nothing but wherein the cost of transportation from origin to destination in India is being paid by the freight forwarder and such charges are being collected by them in addition to the consideration for the services and that such charges in effect do not represents the consideration for services bur recovered as reimbursements for expenditure and are chargeable to only service tax after 10/09/2006. He would rely upon the decision of the Tribunal in the case of Bax Global India Ltd. v. Commissioner of Service Tax, Bangalore 2008 (9) STR 412 (Tri.-Bang.) and British Railways Board v. Customs and Excise Commissioners (1977) 221 STC for the proposition that service tax demand on the entire amount collected is not sustainable. 4.4. As regards the service tax demand on these issues in appeal ST/217/2012, it is the submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quirement of the customers sells the space to the customers in a particular shipping line at a premium or profit i.e., appellant books the space in advance with the shipping line, say for Rs. 100/- per sq. ft. and sells the space to any of the customers who would like to use the space at Rs. 115/- per sq. ft. The additional amount of Rs. 15/- earned by the appellant is being regarded by him as a profit in trading and selling of space. Revenue s contention is that this amount is for the services rendered to the client. In our considered view, the appellant herein, under this head, is not rendering any service either to the shipping line or to the customers. The appellant books the space and make payment to the shipping line in advance and/or, as and when the bills is raised, and sells the same to their customers at a profit. The appellant is not rendering any service either to the shipping line or to its customers, more so, under business auxiliary service. This view of ours is fortified by the decision of this very same bench in the case of Greenwich Meridian Logistics (India) Pvt. Ltd. (supra) and by a coordinate bench of this Tribunal in the case of DHL Lemuir Logistics Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t these were really reimbursements of the expenses/freight incurred by them. The adjudicating authority on this issue has categorically recorded that the appellant has recovered charge collection fees to cover the cost of financial and banking cost associated with the freight liability paid by them. In any case, we do find that the appellant is not seriously contesting the tax liability under this head. In appeal ST/217/2012 the demand under this head which is beyond the period of limitation is set aside for the same reason as indicated herein above in airline incentive scheme and the demands confirmed within the limitation period in both the appeals are upheld for the same reason as indicated herein above. 7. As regards the penalties, we find that the issue involved in this case is question of interpretation and the interpretation could have been due to the confusion arising whether the amounts are chargeable to tax under specific heading under business auxiliary service or otherwise. Since the issue involved is of interpretation, we hold that penalties imposed by the lower authorities are unwarranted. Accordingly, the penalties are set aside. 8. The appeals are disposed off ..... X X X X Extracts X X X X X X X X Extracts X X X X
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