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TMI Blog2017 (8) TMI 1285X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of above three services is not sustainable and requires to be set aside. CCX fee as BAS - Held that: - The Tribunal in the case of DHL Logistics Private Limited held that demand under CCX fee as BAS is sustainable. Following the same, we hold that the demand in the appeal has to be sustained. Break Bulk fee as CHA service - whether the said fee would fall under BAS? - Held that: - the demand of service tax on the charges like break bulk fee, agency fee, unallocated income, system currency assessment factor and expenses reimbursement are not subject to levy of service tax under BAS prior to 1.5.2006. The demand on these charges is required to be set aside. Penalty - Held that: - several amendments were brought into the definiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod Date of SCN Issues Involved Penalty/Interest 1. ST/122/2006 01.07.2003 to 30.06.2004 24.12.2004 (i) Levy of service tax under Business Auxiliary Service (BAS) category on Airline commission Interest under Section 75 2. ST/124/2006 July 2004 to July 2005 18.10.2005 (i) Levy of service tax under BAS category on Airline commission (ii) Levy of service tax under BAS category on Airline incentive (iii) Levy of service tax under BAS category on Air-freight rebate Interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sharing between group companies and is not a consideration for service. 2.5 The other charges which are in dispute are (1) Agency Fee (2) Unallocated Income, (3) System Currency Assessment Factor and (4) Expenses Reimbursement. 2.6 He submits that Agency fee are charges collected from the importers for preparation of delivery order and for handing over the goods to the importer indicated in the house airway bill. 2.7 Unallocated income represents charges in accounting entries due to the change in terms of contract involving increase or reduction in rates. 2.8 System currency adjustment factor is charges collected from the importer to offset exchange rate fluctuations on the freight amount. 2.9 Expenses reimbursement are the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are rendered directly to the client; that therefore the said charges / services would not fall under the category of Business Auxiliary Service . 2.12 Ld. counsel also argued to set aside penalties imposed contending that being an interpretational issue, there was much confusion as to whether services would fall under BAS or CHA services or whether the charges collected would be subjected to service tax at all. 3. The Ld. A.R Shri K. Veerabhadra Reddy reiterated the findings in the impugned order. He explained that the charges like break bulk fee, agency fee, unallocated income, system currency adjustment factor and expenses reimbursement are transactions involving three parties; that it involves airlines, appellant and the customer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that demand under CCX fee as BAS is sustainable. Following the same, we hold that the demand in the appeal has to be sustained. 5.3 The issue of break bulk fee in the case of DHL Logistics Pvt. Ltd. (supra) was whether such fee would fall within the category of CHA service , whereas in the present case, the issue is whether the said fee would fall under BAS. The Mumbai Bench of the Tribunal in the aforecited case held that such fee would not fall under CHA service setting aside the demand. It is not disputed that the appellant has been discharging service tax on break bulk fee, agency fee, unallocated income, system currency assessment factor and expenses reimbursement under the category of BAS from 1.5.2006. It is also submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eak bulk fee, agency fee, unallocated income, system currency assessment factor and expenses reimbursement is set aside since the appellant has been discharging service tax on these amounts under Business Support Service w.e.f. 1.5.2006 and for the reason that these charges did not fall under the category of BAS during the disputed period. 7.16. Ld. Counsel has prayed to set aside penalty contending that the issue whether such charges would fall under the category of CHA/BAS/BSS or interpretational issue and the appellant has been discharging service tax. We do find substance in the said ground raised by the appellant for the reason that several amendments were brought into the definition of Business Auxiliary Service . Further, a new ..... X X X X Extracts X X X X X X X X Extracts X X X X
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