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TMI Blog2023 (7) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... notice to that extent is set aside. The provisions of section 73(4) of the Finance Act are not applicable because intention of the appellant is not established - penalty under section 78 of the Finance Act is set aside as suppression is not proved - penalty under sections 77(1) and 77(2) of the Finance Act are set aside by invoking the provision of section 80 of the Finance Act - plea of the appellant for refund of the service tax already paid is rejected. Appeal allowed in part. - Service Tax Appeal No. 52405 of 2022 Service Tax Appeal No. 51621 of 2022 Service Tax Appeal No. 51622 of 2022 - FINAL ORDER NO. 50868-50870/2023 - Dated:- 12-7-2023 - HON BLE MR. JUSTICE DILIP GUPTA, PRESIDENT And HON BLE MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) Shri Amit Jain, Advocate for the Appellant Dr. Radhe Tallo, Authorized Representative of the Department ORDER JUSTICE DILIP GUPTA : Service Tax Appeal No. 52405 of 2022 has been filed by M/s. Tiger Logistics (India) Ltd. the appellant to assail that part of the order dated 18.11.2021 passed by the Commissioner Adjudication, Central Tax, GST, East the Commissioner that confirms the demand of service tax amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order; and C. Any other order as may be deemed fit and proper by the Hon'ble CESTAT, under the circumstances of the case, in furtherance of the objectives of judicial discipline and serving the principles of natural justice. 4. The appellant claims to be engaged in providing the following services:- (i) Customs clearance of cargo on behalf of the clients; (ii) Along with customs clearance, the transportation service as an incidental service to the clients; and (iii) Freight forwarding. 5. The actual amount of freight paid by the appellant to the airlines or shipping lines may be more or less than the amount of freight agreed to with the customer; the differential being the profit or loss accruing to the appellant from the sale of cargo space. The appellant claims to act on a principal to principal basis with their clients for rendering this service. 6. The issue involved in this appeal is regarding demand of service tax on the Mark Up/Differential Ocean Freight, Container Detention Charges, Toll Tax, Brokerage, Forklift Charges, Fumigation Charges and Sundry Charges. 7. The order dated 18.11.2021 passed by the Commissioner adjudicates the Statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (India) Ltd. (earlier known as M/s Tiger Logistics (India) Pvt. Ltd] and order that the said amount is liable to be recovered from M/s Tiger Logistics (India) Pvt. Ltd under Section 73 of the Finance Act, 1994 as amended read with Section 66 and Section 68 ibid and Rule 6 of Service Tax Rules, 1994. I hereby appropriate Rs.1,50,19,264 (Rupees One Crore Fifty Lakh Nineteen Thousand Two Hundred and Sixty Four only) that has been already deposited by the Noticee as Service Tax during investigations as stated in para 42; (ii) I hold that the Service Tax liability of Rs.8,74,11,671/- (Rupees Eight Crores Seventy Four lac Eleven Thousand Six hundred and Seventy One only) was discharged through Cenvat Credit at the relevant time in the past in term of Rule 3(4) of Cenvat Credit Rules 2004 read with Section 66 and Section 68 ibid and Rule 6 of Service Tax Rules, 1994. In view of the due discharge of service tax liability in the past at the relevant time by the Noticee, I order that Rs. 8,74,11,671/-(Rupees Eight Crores Seventy Four lac Eleven Thousand Six hundred Seventy One only) stands appropriated. I also order that interest not chargeable under section 75 of the Finance Act, 1994 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t extent is invalid. The provisions of section 73(4) of the Finance Act are not applicable because the intention is not established in the impugned order but merely omissions. c) The penalty under section 78 of the Finance Act is set aside as the suppression is not proved. d) The penalty under sections 77(1) and 77(2) of the Finance Act are set aside by invoking the provision of section 80 of the Finance Act. e) The plea of the appellant for refund of the service tax already paid is rejected. 11. The two Statements of Demand dated 22.12.2017 and 29.09.2020 emanate from the same show cause notice dated 23.04.2015, which, as noticed above, had resulted in the order of the Tribunal allowing the appeal in part. The same order, as was passed by the Tribunal, would have to be passed in this appeal. 13. Even otherwise, it is seen that the appellant provides cargo space to customers who are importers/exporters of goods. The appellant pays charges for space booking to different Shipping Lines/Airlines and later on sells such space to the exporters/importers at a slightly higher amount. The difference between the amount paid by the appellant to the Shipping Lines/Airli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er bears no liability with respect to transportation and any legal proceedings will have to be instituted by the exporters, against the airline/carrier/ocean liner. The freight forwarder merely charges the rate prescribed by the airline/carrier/ocean liner and cannot vary it unless authorized by them. In such cases the freight forwarder may be considered to be an intermediary under rule 2(f) read with rule 9 of POPS, since he is merely facilitating the provision of the service of transportation but not providing it on his own account. When the freight forwarder acts as an agent of an airline/carrier/ocean liner, the service of transportation is provided by the airline/carrier/ ocean-liner and the freight forwarder is merely an agent and the service of actual transportation will not be liable for service tax under Rule 10 of POPS. 2.2 The freight forwarders may also act as a principal who is providing the service of transportation of goods, where the destination is outside India. In such cases the freight forwarders are negotiating the terms of freight with the airline/carrier/ocean liner as well as the actual rate with the exporter. The invoice is raised by the freight forwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant to the Shipping Lines/Airlines and the amount recovered by the Appellant from the customers (exporter/importers) is called the mark-up . 6. The Department was of the view that this mark-up was for services provided by the Appellant to customers and was, therefore, liable to service tax under the category of support services of business or commerce , covered under section 65(104) of the Finance Act, 1994 . The Department was also of the view that after July, 2012, the service was not covered by any service notified in the negative list and, therefore, continues to be taxable. ****** 10. A Division Bench of the Tribunal in the earlier decision rendered in Satkar Logistics vs. CST Service Tax Appeal No. 50411 of 2016 decided on 10.08.2021 accepted the contention advanced on behalf of the appellant that the appellant was only trading in space and was not providing any service. The Division Bench also noted that the issue involved in the Appeal was covered by the decision of the Tribunal in Greenwich Meridian Logistics (India) Pvt. Ltd. vs. CST (2016) 69 taxmann.com 100/55 GST 635 (Mum.- CESTAT) and Commissioner of Service Tax, New Delhi vs. Karam Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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