9911796707
TMI Blog2023 (10) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... (BAS). HELD THAT:- It is observed that in chartering business as a normal trade practice, the charterer is allowed a discount from the hire charges payable by them and the net hire charges is received by the ship owner. Thus, for all practical purposes, the charter is given a discount by the owner on the hire charges and no remittance is being made by owner of the ship i.e. ASL to charters. As the Address Commission was not paid towards rendering of any taxable service, no service tax is payable on Address Commission as the same is in the nature of discount and not a payment for provision of any taxable service. It is a settled principle of law that service tax is leviable only on consideration received for provision of service. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by such agents, and in the common trade parlance, is known as Third Party Commission . 2. A show cause notice dated 20.10.2010 was issued to the Appellant demanding service tax of Rs.2,03,19.847/- including Education Cess, alleging that the Appellant has not paid service tax on the Address Commission paid to foreign companies as per Section 66A of the Finance Act. The Notice was adjudicated and the Commissioner Service Tax, Kolkata has confirmed the demand of service tax of Rs.1,56,27,124/- along with interest and imposed equal amount of tax as penalty. Aggrieved against the impugned order, the Appellant has filed the present appeal. 3. The contention of the Appellant is that the Address Commission paid to foreign companies is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere are two types of commission mentioned in the agreement. There is a commission paid to Foreign Agents for promoting their business. We find that there is no dispute about discharge of service tax on Third Party Commission paid to foreign agents in relation to the promotion of their business of Chartering of Ships. The dispute in this appeal centers around the discount passed on to the charterer of ships, which is described in the respective agreements a Address Commission . It is the contention of the Appellant that Address Commission is nothing but a discount and on this count, no remittance is made by them to the foreign charterer of ships, and the total amount received by them is after deducting the said Address Commission fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. Thus, for all practical purposes, the charter is given a discount by the owner on the hire charges and no remittance is being made by owner of the ship i.e. ASL to charters. As the Address Commission was not paid towards rendering of any taxable service, we hold that no service tax is payable on Address Commission as the same is in the nature of discount and not a payment for provision of any taxable service. It is a settled principle of law that service tax is leviable only on consideration received for provision of service. We do not find any merit in the contention of the department that the discount deducted should have formed part of the value of consideration paid to the foreign companies and discharged service tax under the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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