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TMI Blog2023 (6) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant has taken a contrary stand stating that all the couriers were exported and delivered on cash on delivery (COD) basis and their services are required to be treated as export of service - A perusal of the above Circular reveals that the co-loader activities are not chargeable to Service Tax only on the condition that the principal courier discharges the Service Tax on the courier charges collected from their customers. Though the appellant has taken the plea initially that they were acting as a co-loader to other courier agencies who discharged Service Tax, but in the de novo proceedings it was submitted by the appellant that the courier parcels were exported abroad and as such, no tax is payable; whereas the contention of the Revenue is that the services were rendered to service recipients located in India, the service charges were received in Rupees, the conditions for treating the services as export of services were not satisfied and so, the tax liability needs to be fastened on to the appellant. The appellant has entered into an agreement, which is termed as Expense Reimbursement Agreement , with M/s. EZ Worldwide Express, New Jersey, USA. In terms of the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount charged by the courier agencies from customers. Whether any invoice/(s) were raised for the services rendered to these courier companies is also not known since no such documents have been placed on record. Its reasonable belief that it was rendering the services of a co-loader only, is lacking any merit since, as a courier agency, the appellant should be / would be aware that courier services are chargeable to tax and it has not discharged the responsibility that the principal courier has paid the Service Tax on the charges that were collected from the customers. Extended period of limitation - HELD THAT:- The entire investigation started only as the appellant had accounted certain income in its trial balance as Courier Income Non-Tax . The appellant has not produced any evidence that either the appellant or the principal courier had made any correspondence with the Department regarding the taxability or otherwise of the income shown in the financial statements. The appellant thus has failed to substantiate its claim as to non-taxability and as to the belief entertained by it that the principal courier must have paid the tax. As such, the extended period of limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2009 dated 31.07.2009. 4.2 As the assessee was aggrieved against this order, they filed an appeal viz. Appeal No. ST/S/346/2009 ST/577/2009 before the CESTAT, Southern Zonal Bench, Chennai, who after completing the hearing, remanded the case back to the original adjudicating authority for de novo adjudication vide Final Order No. 62/2012 dated 27.01.2012, with the following observations: - 4. In the course of hearing, the appellant could not satisfy whether it was acting as courier in substance making delivery of the consignments of the principal courier. Letter dt. 11.10.2010 produced does not reveal about the delivery of consignments what that was the obligation of the principal courier. What was the payment that was received by the appellant does not find place in the said letter. What was the tax liability discharged in respect of the sub-contracted portion of the main contract is not apparent from the letter produced. There was no agreement nor any terms of arrangement between the parties brought to our notice. Therefore, it is not practically possible to appreciate the nature of activity carried out by the appellant. 5. No doubt, larger bench decided the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss India Ltd., New Delhi and M/s. Professional International Couriers Pvt. Ltd. On perusal of these two letters, it was observed that there was no mention of provision of door-to-door transportation of documents, goods or articles by the assessee. On the contention of the appellant that there is no liability of Service Tax as the transaction amounts to export of service and that revenue shared from an export of service cannot be taxed at the hands of the co-loader, the learned adjudicating authority commented that the appellant made a contention before the CESTAT that the main courier had paid the Service Tax and that once tax was paid by the main courier they were not liable to tax for the main service as it amounts to double taxation, but later contended that as the courier parcels were delivered on cash on delivery (COD) basis to customers located in foreign countries, it amounted to export of service. Thus, the appellant has contradicted their stand without establishing the evidentiary value of the documents or letters produced. 5.3 Another finding of the learned adjudicating authority is that as the period involved in this demand was from 01.05.2006 to 22.08.2007, in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved was collecting the goods from the booking consignment, transporting the same to destination and ultimate delivery by hand to the recipient and such services will fall under courier agency service. 6.2 The appellant has submitted that business support service is a generic one and in terms of classification of services under Section 65A (2) of the Finance Act, 1994, the sub-clause which provides the most specific description shall be preferred to sub-clauses providing a more general description and in the specific case, Revenue is seeking to discard the specific entry and to bring the appellant s services under a very general entry, since under the specific entry no service tax is payable. It is also submitted that learned adjudicating authority has failed to consider the clarification issued by C.B.E.C. vide Circular F. No.341/43/96-TRU dated 31.10.1996 which was in force till 22.08.2007, to the effect that the charges of the co-loaders to the courier agency for in-transit movement of goods, documents or articles are in any case ultimately recovered by the courier agency from the customers and these charges are included in the gross amount charged by the courier agencies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s regard wherein it was held that extended period cannot be invoked when the facts involve non-payment on the belief that there is no such obligation on the part of the assessee to pay tax when main contractor is liable to pay the same. 7. We have heard the learned Advocate Shri N. Viswanathan representing the appellant and also the learned Authorized Representative Smt. Anandalakshmi Ganeshram representing the Revenue. 7.1 During the hearing, the learned Advocate representing the appellant has further submitted that the Commissioner s finding that co-loader is a person who provides service to other courier agencies for handling a part of the work, but not involving door-to-door transportation of documents or articles, is totally incorrect in the light of various Circulars / decisions on the issue; even otherwise, the co-loading activity cannot be brought under the category of business support service during the relevant period as the words operational or administrative assistance in any manner was included in the definition of business support service only with effect from 01.05.2011 vide paragraph 5 of the C.B.E.C. Circular No. 148/17/2011-ST dated 13.12.2011. Hence, ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received from the clients whereas the main courier company has taken a different stand claiming that the subject activities tantamount to export of service since the courier parcels were delivered outside India. 8.4.2 She also contended that it is significant to note that the aforesaid letters are not supported by any documents, contracts or invoices to prove the veracity of their claims and thus the credibility of these letters of the main couriers were not free from doubt and lack any evidentiary value; as such, the service cannot be considered as export of service; that in the present case, the service recipients are located in India and the charges are received in Indian Rupees and hence, the service cannot come within the definition of export of service . 8.5 She further submitted that even assuming that the service is classifiable as courier agency service, it could not be considered as export of service as the prime condition that the payment has to be received in foreign currency has not been satisfied in the present appeal. 8.6.1 She has also placed reliance on the judgement of the Larger Bench of the Tribunal in the case of M/s. Vijay Sharma Co. (supra) where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, goods or articles utilising the services of a person, either directly or indirectly, to carry or accompany such documents, goods or articles; Support services of business or commerce: (104c) support services of business or commerce means services provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfilment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, formulation of customer service and pricing policies, infrastructural support services and other transaction processing. 11. We find that the appellant has placed reliance on the Board Circular F. No.341/43/96-TRU dated 31.10.1996 to argue that their services are to be classified as a co-loader to other couriers and since the principal courier has discharged the Service Tax and the charges are collected from their customers, the co-loaders are not required to pay any Service Tax and this was the argument they put forth before the Tribunal in the first round of litigation, who had directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service provided by co-loader to the courier agency is not chargeable to service tax. It is significant to point out that the charges of the co-loaders to the courier agency for in-transit movement of goods, documents or articles are in any case ultimately recovered by the courier agency from the customer and these charges are included in the gross amount charged by the courier agencies from customers on which the service tax is computed. 17. As regards the value of taxable service it is the gross amount charged by the courier agency from the customer for services in relation to door to door transportation for time sensitive documents, goods or articles. The service tax is, therefore, to be computed on the gross amount charged by the courier agency from the customers. 18. A question has been raised whether courier agency is liable to pay service tax on the transportation of documents, goods or articles which are sent abroad. In this context, it is clarified that the courier agency is liable to pay service tax on the gross amount charged in India from the customer even if the documents, goods or articles are delivered abroad. However, in respect of documents, goods or art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant has failed to produce any record relating to the transactions and so, the purpose of bringing this agreement on record is not clearly understood. 15.1 We have also gone through the letters issued by M/s. United Business Xpress India Pvt. Ltd., New Delhi dated 29.10.2012 and M/s. Professional International Couriers Pvt. Ltd. dated 01.11.2012. It is not very clear whether the appellant has received any consideration from M/s. EZ Worldwide Express in terms of the above agreement entered through these couriers. The services rendered to M/s. United Business Xpress India Pvt. Ltd., New Delhi and M/s. Professional International Couriers Pvt. Ltd., whether to be classified as the services of a co-loader or business support services is the issue in dispute in this appeal and whatever the submissions of the appellant in relation to the agreement with M/s. EZ Worldwide Express appears to be not the subject matter as the appellant was only able to produce these two letters cited supra. 15.2 In this appeal, as the facts reveal, the appellant being a courier agency rendering courier services to other courier agencies for a consideration is not at all in doubt. Whether the said s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of M/s. United Business Xpress India P. Ltd. v. Commissioner of Service Tax, Delhi [2017 (48) S.T.R. 270 (Tri. Del.)] is misplaced and needs to be distinguished as the issue involved therein was the adjustment of service charges paid to foreign courier agency against service charges payable by the foreign courier agency to the appellant therein. 19.1 From the discussions and findings in the impugned order on the plea against invocation of extended period of limitation, we find that the learned Commissioner has only held that: - The appellant suppressed the receipt of the disputed income in its ST-3 returns for the earlier periods up to 22.08.2007. The above clearly proves their intention to evade payment of Service Tax. The fact of non-payment of Service Tax was unearthed by scrutinizing the trial balance. The above would not have come to the light but for the audit of accounts by the Internal Audit Group. The contradictory claim made by the appellant during appellate proceedings and de novo proceedings corroborate the charges of suppression of facts with an intention to evade payment of tax. 19.2.1 The contentions of the appellant against the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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