9911796707
TMI Blog2024 (3) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... y way of incentive is not on account of rendering any services but on account of trading activity which is not taxable under the Act - The findings of the adjudicating authority that incentive received by the appellant is also another form of consideration given by the airlines for providing the service for promotion of their business needs to be set aside in view of the decision of the Larger Bench, where it was specifically concluded that by booking air tickets the air travel agent is promoting its own business and is not promoting the business of the airlines. The terms incentive , discount or market price adjustment used in the CSR has been considered differently by the adjudicating authority which has been challenged both by the assessee as well as by the revenue. No service tax can be levied on incentive . In so far as the appeal filed by the revenue against the demand being dropped on discount and market price adjustment is concerned the same has been dropped as they are directly linked to freight which has been held to be non-taxable by the adjudicating authority and the same has not been challenged by the Revenue. The learned Authorized Representative has relied on the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6010 77279839 17207674 94487513 3. The adjudicating authority by the impugned order observed that the extended period of limitation cannot be invoked in so far as inclusion of freight in the value of clearing and forwarding agent service was concerned as on same facts the department has already issued the show cause notice dated 22.10.2013. On merits, it was held that freight is not taxable under the provisions of the Act as it is charged and recovered by the assessee from its clients/exporters for booking of space for transportation of goods which is paid by the assessee to the airlines and hence cannot be attributed to the services of Clearing and Forwarding Agent and therefore, dropped the demand of Rs. 7,72,79,839/- on this account. On the second aspect of "Business Auxiliary Service", which is the subject matter of dispute both by the appellant and the Revenue, the adjudicating authority considered the two elements as "commission" and "incentive" separately but as the appellant had paid the service tax on "commission", there was no dispute. The liability of service tax on "incentive", was considered by the adjudicating authority taking into account the different termin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client; or [Explanation - For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, "inputs" means all goods or services intended for use by the client;] (v) production or processing of goods for, or on behalf of the client; or (vi) provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision, and includes services as a commission agent, but does not include any activity that amounts to "manufacture" of excisable goods. "65(105)(zzb)- "taxable service" means any service provided or to be provided to a client, by any person in relation to business auxiliary service." 8. For classifying a service under the category of BAS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bjected to levy of service tax. We are guided by the observations of the Larger Bench that incentives are not to be construed as 'consideration' and applying the said logic, the inevitable conclusion is that no service tax can be levied on incentives received by the appellant, coupled with the fact that incentive in the present case is a form of profit earned by the appellant as a result of a trading activity. The findings of the adjudicating authority that 'incentive' received by the appellant is also another form of 'consideration' given by the airlines for providing the service for promotion of their business needs to be set aside in view of the decision of the Larger Bench, where it was specifically concluded that by booking air tickets the air travel agent is promoting its own business and is not promoting the business of the airlines. 10. The terms 'incentive', 'discount' or 'market price adjustment' used in the CSR has been considered differently by the adjudicating authority which has been challenged both by the assessee as well as by the revenue. We find that the appellant has explained their business model by referring to the CSR Sheets and the Certificate dated 18.05.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
