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TMI Blog2018 (1) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered to FHB under BAS - Held that: - on verification, it was revealed that respondents had entered into agreement with FHB to act as agent of FHB for handling and distribution of a portion or all the contents of a consolidated shipment for delivery or re-consignment. Respondents have agreed to provide all such services on behalf of FHB in respect of cargo as are normally rendered by break bulk agents. Therefore the charges received by respondent for such activities from NPCIL are actually on behalf of FHB. In such circumstances, the observation of the Commissioner that the respondents have not rendered services for and on behalf of FHB does not appear to be in consonance with law - for the limited purpose of verifying and reconsidering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entered into individual agreement with FHB and RSPL. On investigation and scrutiny of records, it was observed that the respondent short-paid service tax under the category of CHA services rendered to NPCIL and Business Auxiliary Service rendered to FHB and RSPL. Show cause notice was issued proposing to demand the service tax along with interest and also for imposition of penalties. After due process of law, the original authority partly confirmed the demand with respect of CHA services and partly dropped the demand in regard to Business Auxiliary Service. Aggrieved, the department is now before the Tribunal. 2. On behalf of the department, ld. AR Shri S. Govindarajan reiterated the grounds of appeal. He submitted that in respect of CH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o RSPL. 3. With regard to the demand on BAS, as shown in Annexure III to the show cause notice, ld. AR submitted that the Commissioner has erred in observing that the services are not rendered by respondent for and on behalf of FHB. The services rendered by respondent as per their agreement entered with FHB to act as break bulk agent has to be performed by FHB for NPCIL and as FHB is not having any office in India, the services were rendered by respondent on behalf of FHB. Therefore, the observation of the Commissioner that no services were rendered by respondent on behalf of FHP is erroneous. Further, that respondent has rendered services such as raising bills and collecting freights from NPCIIL on behalf of FHB. The said service would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the impugned order made by the Commissioner. He submitted that the respondent had paid the service tax at the rate of ₹ 176/- per MT, after deducting the part of the amount which is paid to RSPL. The amount received from NPCIL included wharfage and CHA services and transportation charges. Thus after deducting the expenses and the amounts paid to RSPL, the respondent discharged service tax adopting the rate at ₹ 176/- per MT. The Commissioner after analyzing the agreement and documents concluded that the differential taxable value would be ₹ 0.2 per MT. The respondent has discharged tax on this differential taxable value and that the same requires no interference. He also asserted that the Board s Circular is not applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the respondent has already discharged the service tax liability in this regard. We therefore hold that the order of the Commissioner (Appeals) setting aside the demand in respect of Annexures 2 and 4 requires to be set aside, which we hereby do. The appeal filed by Revenue on this count succeeds. 8. With regard to the demand raised in Annexure 1 and 3, the ld. AR has strongly argued that the Board s circular clarifies that when CHA charges are received in lump sum, the service tax has to be paid on 15% of such lump sum charges. On going through the said circular, we find that the said clarification has been given when no separate break-up is given in respect of the charges. In the present case, the agreement between NPCIL and the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alf of FHB. In such circumstances, the observation of the Commissioner that the respondents have not rendered services for and on behalf of FHB does not appear to be in consonance with law. However, we are able to find that the services have been rendered in any case to FHB which is located outside India. Further, the consideration has been received in convertible foreign exchange. This being the case, the ingredients of export of services may be attracted and requires verification. Thus, for the limited purpose of verifying and reconsidering the demand of service tax in respect of Annexure - III (BAS), we are of the considered opinion that the matter requires to be remanded to the adjudicating authority. This issue is remanded leaving it o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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