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TMI Blog2024 (3) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... LTD. VERSUS COMMISSIONER OF SERVICE TAX, DELHI-II [ 2023 (5) TMI 192 - CESTAT NEW DELHI] , the Tribunal held that the income/receipts under the head of airline commission and airline incentive was not taxable under BAS as the Appellant assessee was not buying and selling space on the airline on behalf of their client but on their own account as the they were directly buying themselves and thereafter selling the same to the exporters. Therefore, the said activity cannot be considered as BAS since the statute requires at least three parties to be involved in the transaction namely the service provider, service recipient and the client which was not the case involved. Hence, Service Tax was not payable. Extended period of limitation - Penalties - HELD THAT:- It is imperative to state that the Appellant assessee had discharged their tax liability towards terminal handling services, documentation service, Bill of Lading service, etc., even when they were not required to do so under the existing law during the relevant period. This further establishes bona fide intent of the Appellant assessee - the Appellant assessee cannot be alleged to have suppressed facts with mala fide intention. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices procured by the Appellant-assessee for facilitating their output services and the same could not be disallowed on the basis that the invoices were raised in the name of their other offices/branches which upto the date of taking centralized registration in July, 2009 were not registered. The learned Commissioner of Central Excise Service Tax, Noida vide the impugned order, confirmed the allegations and upheld the demand of service tax amounting to Rs.7,15,04,131/- alongwith interest and imposed penalties as proposed in the SCN. Further, Cenvat credit of Rs.41,02,573/- was disallowed and order for recovery has been made. Penalty of equal amount has also been imposed. 2. Being aggrieved the Appellant-assessee is in appeal before the Tribunal. 3. The Revenue is in appeal objecting to the extent that combined penalty under two or more Sections cannot be imposed and thus objects to the imposition of consolidated penalties under Section 76, 77 78 of the Act. Further they are also aggrieved that no penalty under Section 77 of the Act has been imposed which as per the review committee was proposed in the show cause notice. The Review order also refers to a grammatical omission at inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Central Excise, Chennai-III, 2014 (36) S.T.R. 1310 (Tri.-Chennai); Satkar Logistics vs. Commissioner of Service Tax, Delhi-III 2021 (8) TMI 694-CESTAT New Delhi; EMU Lines Pvt. Ltd. vs. Commissioner of CGST CE, Belapur, 2023 (6) TMI 64-CESTAT-Mumbai; Commissioner of CGST CE, Belapur vs. EMU Line Pvt. Ltd., 2023 (2) TMI 1155-SC. 5. It is further submitted that transport of cargo by ship/air was not subjected to tax during the relevant period and therefore Service Tax cannot be collected on such services indirectly. The learned Advocate further submitted that the assessee is eligible to claim Cenvat credit of input services received by their unregistered branch offices even if the tax payment documents raised by the service providers were in the name of their other offices as the payments for such services were made by the assessee in all cases. He further submits that centralized registration was taken by the assessee in July, 2009 and the addresses of all such offices were mentioned in the registration certificate specifically. It is his submissions that Cenvat credit cannot be denied merely due to procedural irregularity. In support of his submission he relied upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are reimbursed by the clients without any mark-up. Since the payment made by the client towards the said charges are in the nature of reimbursements, same was non-taxable, however, the Appellant assessee paid tax on the same. The Appellant assessee was duly registered with the Service Tax department w.e.f. 30.11.2006 vide Service Tax Registration No.AACCB9266EST001 under the category of Business Auxiliary Service in the name of their office located at Noida, as they did not have any regular branch/offices in cities where they had appointed representatives operating from their residence to obtain orders from potential customers/exporters. Thereafter, in July 2009, Appellant obtained Centralized Registration for their office located in Kolkata vide Registration No.AACCB9266EST002 under the category of Clearing Forwarding Agency' and 'Transportation of Containers by Rail along with the list of various offices/ representatives' premises maintained by the Appellant in different cities in terms of Rule 4(3) of the Service Tax Rules, 1994 in July, 2009. 9. We find that the issue in dispute is no longer res integra. Mere purchase and sale of booking cargo space is not a Servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the instance case are demonstrated in the table below:- SI. No. Condition Satisfaction by the Appellant assessee 1. The freight forwarder separately negotiates the terms of freight with the airline/carrier/ocean liner as well as with the exporter. The assessee books the space with shipping lines in its own name and shipping line raise invoice on assessee. Further, separate invoice is raised on the clients wherein different amount is charged (Annexure-C, page 57-58), and this only resulted in mark-up. Thus, first condition is satisfied. 2. The invoice is raised by the freight forwarder on the exchequer. Invoices are being raised on exporters (Annexure-C, page 57-58) 3. The freight forwarder is undertaking all the legal responsibility for transportation of the goods and undertakes all the attendant risks. All risk of transportation is borne by the assessee. Further, there may be a situation where cargo space is sold at lesser price, thus, loss risk is borne by the assessee. 11. In addition to the above submissions, it is submitted that the activity of trading space is not notified by the Government as a 'service' under Section 65(105) of the Finance Act, 1994. As regards, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , though used colloquially to describe all manner of carriage, is the nomenclature assigned to the consideration for space provided on a vessel for a particular voyage. Freight is charged by the entity that is in possession of space on a vessel from an entity that requires the space for carriage of cargo. 11. Slots may be contracted for by the shipper or its agent with the shipping line through the steamer agent. Implicit is a uni-directional flow of consideration because the space belongs to the shipping line. Steamer agent or agent of shipper may earn commission in such a transaction. Leaving that situation aside, the contention of the appellant is that it is a multi-modal transport operator which entails a statutorily assigned role in cross-border logistics. According to Section 2 of the Multi-modal Transportation of Goods Act, 1993. (m) multimodal transport operator means any person who (i) concludes a multimodal transport contract on his own behalf or through another person acting on his behalf; (ii) acts as principal, and not as an agent either of the consignor, or consignee or of the carrier participating in the multimodal transportation, and who assumes responsibility for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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