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TMI Blog2018 (9) TMI 1719X X X X Extracts X X X X X X X X Extracts X X X X ..... se are actually reimbursable expenses and not relating to the CHA activities. Even in respect of air freight, the Tribunal held that these charges cannot be said to be related to the activities of CHA. Appeal allowed - decided in favor of appellant. - Appeal No. ST/00050/2012 - Final Order No. 42210/2018 - Dated:- 4-7-2018 - Shri Madhu Mohan Damodhar, Member (Technical) And Shri P Dinesha, Member (Judicial) Ms. K. Nancy, Advocate for the Appellant Shri. K. Veerabhadra Reddy, JC (AR) for the Respondent ORDER Per P. Dinesha, M/s. PVGT Freight Forwarders Logistics Pvt. Ltd., the appellants herein, are registered under the category of Clearing and Forwarding Services and Goods Transport Agency Services from 19.05.2006. From the date of registration, the appellants have been rendering services within the prescribed parameters of law by remitting tax and filing periodical returns. In the course of Audit conducted by the Internal Audit Unit of Service Tax Commissionerate, it was alleged that the appellants were providing freight forwarding and logistics services, such as clearing export cargo by collecting documents such as Invoice, Bill of Lading, LC Cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is extract of Show Cause Notice and reply. (ii) The respondent has failed to apply his mind to analyze if the services would fall under the category of clearing and forwarding or Business Support Services. (iii) The respondent has not considered any of the submissions made by the appellants. It clearly exhibits the pre-conceived mind of the respondent and on the ground of non-application of mind and non-appreciation of evidence, the order deserves to be set aside. (iv) That the freight amount collected by them is not towards any service rendered by them. But it is paid to the shipper for transporting the cargo from one place to another. The Air Freight / Ocean Freight collected by the appellants from their customers is in connection with their import/export activities and will not come within the category of Clearing and Forwarding Services or GTA. (v) That they are not rendering any service relating to transport but that their customers are incurring the expense on account of transportation of goods. (vi) That it is not disputed that the freight amount is either for ocean freight or for air freight and they collect the same for transport of the goods by sea or air. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... airliners. This amount has also been sought to be taxed under the Customs House Agent activity. This shows the adjudicating authority has not applied his mind to the details of the various activities undertaken by the appellants and how they relate to the amount collected by them. In respect of air exports apart from freight, they collected various other charges i.e. Cartage revenue, MSIL/JWG charges, due carrier, documentation etc. In all these cases the services are rendered by the third party and the appellants initially make payment for the activities on behalf of the client and later collect the amount from the clients. These are actually reimbursable expenses and they do not relate to any CHA activities. In these cases, on going through the statement, we find that in certain cases the appellants had incurred less cost and in certain cases, they had incurred more cost. In any case, the profit or loss incurred in respect of activities which are not related to CHA activities should not be the concern of the Department for the purpose of collecting service tax. The Apex Court s decision in Baroda Electric Meters Ltd. case (supra), even though it relates to the Central Excise, ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the transportation service is rendered actually by the Airliner and not the CHA. These points have not been properly gone through by the adjudicating authority. Similarly if we see the breakup of other services, they do not relate to CHA activity at all. Further we find that storage and handling charges came into the service tax net only with effect from 16-8-2002. In these circumstances, we are of the opinion that there is no merit in the impugned order. Moreover as contended by the learned Advocate, the major amount portion of the Billing represents freight charges and the Commissioner (Appeals) had already decided the issue in favour of the appellants. The order of the Commissioner (Appeals) has not been challenged by the Revenue. In such circumstances, we agree with the learned Advocate for the appellants that the Revenue cannot agitate over the issue which has become final. The demand is also time-barred. In view of the above observation, we are of the view that the impugned order is not sustainable. Summing up, we find that the appellants had already discharged the duty liability in respect of the Customs House Agent activities undertaken by him. As regards all the other ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is a multi-modal bill of lading and commits to delivery at the consignee s end. To ensure such safe delivery, appellant contracts with carriers, by land, sea or air, without diluting its contractual responsibility to the consignor. Such contracting does not involve a transaction between the shipper and the carrier and the shipper is not privy to the minutiae of such contract for carriage. The appellant often, even in the absence of shippers, contract for space or slots in vessels in anticipation of demand and as a distinct business activity. Such a contract forecloses the allotment of such space by the shipping line or steamer agent with the risk of non-usage of the procured space devolving on the appellant. By no stretch is this assumption of risk within the scope of agency function. Ergo, it is nothing but a principal-to-principal transaction and the freight charges are consideration for space procured from shipping line. Correspondingly, allotment of procured space to shippers at negotiated rates within the total consideration in a multi-modal transportation contract with a consignor is another distinct principal-to-principal transaction. We, therefore, find that freight ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e too, the appellant does not, in relation to the amounts entered in the books of accounts, procure space for the client but on its own behalf which are then sold to its clients. As no commission is involved in this trading of freight slots , the appellant can hardly be designated as commission agent. Therefore, pre-booking of slots which may realise upon allotment to a customer does not conform to the definition supra and hence is not liable to tax within the scope of the show cause notice. The Tribunal in Greenwich Meridien Logistics (I) Pvt. Ltd. v. Commissioner of Service Tax Mumbai [2016 (4)TMI 547-CESTAT-MUMBAI = 2016 (43) S.T.R. 215 (Tri.-Mum.)] found in favour of the assessee in a parallel matter relating to ocean freight. The demand of ` 2,56,896 fails the test of authority of law and is set aside. 5.8 We do not find any cogent ground or reason to deviate from the ratio already laid down by the Tribunal in the appellant s own case and in DHL Lemuir Logistics Pvt. Ltd. (supra). This being so, the impugned order cannot sustain and will have to be set aside, which we hereby do. In consequence, appeal is therefore allowed with consequential benefits, if any, as per law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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