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TMI Blog2024 (4) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, the appellant is not acting as an agent of the airlines but as an independent business acting on its own account. Since the appellant buys the cargo space in bulk, the airlines offers a better price and the appellant sells the cargo space at a higher price to the exporter and earns a profit. Neither is the appellant a service provider nor is the airlines a service recipient in such an arrangement and no service tax can be levied. This issue is no longer res integra and it was decided so in COMMISSIONER OF SERVICE TAX, MUMBAI VERSUS GREENWICH MERIDIAN LOGISTICS (I) PVT LTD [ 2013 (8) TMI 453 - CESTAT MUMBAI] , M/S. TIGER LOGISTICS (INDIA) LTD. VERSUS COMMISSIONER OF SERVICE TAX-II, DELHI [ 2022 (2) TMI 455 - CESTAT NEW DELHI] and M/S BHATIA SHIPPING PRIVATE LIMITED VERSUS COMMISSIONER OF SERVICE TAX-I, MUMBAI [ 2022 (1) TMI 1175 - CESTAT MUMBAI] . In these appeals, it is not in doubt that the appellant was buying and selling cargo space on airlines and it has been specifically recorded so in the impugned order dated 1.3.2016. The Commissioner, however, confirmed the demand under the erroneous impression that unless the buyer becomes a permanent owner of the cargo space, this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts shown in the TDS certificates issued by the airlines to the appellant and the amounts on which the appellant had paid service tax under the head business auxiliary services. The other SCNs shown above are periodical SCNs for subsequent periods. These demands were confirmed by the impugned orders and penalties were imposed. Aggrieved, the appellant filed these appeals. 6. Learned chartered accountant for the appellant made the following submissions : i) The appellant Schenker (India) Pvt. Ltd. is engaged in the business of transportation of goods and global supply solutions through airlines as well as shipping lines. It had received commissions on which it had paid the service tax. ii) In addition, the appellant also buys cargo space on the aircrafts on its own account in bulk and further sells it to its customers. Since it buys cargo space in bulk, the airlines offer it a Trade Discount from the marked price. The appellant sells the cargo space to its customers usually at the marked price. Thus, the trade discount becomes its profit from trading of cargo space. If the appellant is unable to sell the cargo space to its customers, the appellant loses and if it is able to sell, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s should be set aside in the facts and circumstances of the case. xiii) If at all the demand is upheld, the amounts received should be considered as cum tax receipts. 7. Learned authorised representative for the Revenue vehemently supported the impugned orders. 8. We have considered the submissions. 9. The preliminary objection of the appellant with respect to the first two SCNs is that the appellant had a different Service Tax Registration during the relevant period and after amalgamation, it obtained a new service tax registration and therefore, the demand against the old entity is not sustainable. When any entity amalgamates into a new entity the successor entity takes over the all assets and liabilities of the previous one. Merely because the new entity obtained a new service tax registration, its past liabilities do not extinguish. The appellant s contention that since it had undergone an amalgamation and since it has obtained a new Service Tax registration, all liabilities where the old service tax registration number is cited get extinguished is not correct and cannot be accepted. In fact, if the appellant s contention that the SCN was issued to the old entity which was a di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the airlines would sell the same cargo space to the noticee a second time. This means that in such a case, the Airlines could sell the cargo space to other parties also. Hence, I am of the view that, since the noticee does not become the permanent owner of the cargo space and in view of the fact that the Airlines can sell the cargo space to some other party, the Airlines would remain the permanent owner of the cargo space. It is also clear from the aforesaid judgment that, any activity other than the supply of goods amounts to supply of service. 53.2 I am therefore, of the view that, cargo space is not goods. Therefore, booking of cargo space and trading in cargo space cannot be considered as supply/sale of goods and has to be considered as services . 13. Therefore, the Commissioner confirmed the demand of service tax. 14. We are surprised as to how the Commissioner came to the conclusion that ‗any activity other than the sale of goods amounts to supply of service . Nothing in the Finance Act says so. Section 65(44) defines service as follows: (44) service means any activity carried out by a person for another for consideration, and includes a declared service, but shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 012 and by not being a service not under negative list after that date. 19. On the other hand, if the cargo space is sold by the airlines to the appellant, and by the appellant to the exporter, there is no privity of contract between the airlines and the exporter. The appellant gets the cargo space on that flight and pays the airlines for it. There is another contract between the appellant and the exporter whereby the appellant sells a part of the cargo space which it had bought to the exporter and the exporter pays the appellant. In such an arrangement, the appellant is not acting as an agent of the airlines but as an independent business acting on its own account. Since the appellant buys the cargo space in bulk, the airlines offers a better price and the appellant sells the cargo space at a higher price to the exporter and earns a profit. Neither is the appellant a service provider nor is the airlines a service recipient in such an arrangement and no service tax can be levied. This issue is no longer res integra and it was decided so in Greenwich Meridien, Tiger Logistics and Bhatia Shipping. 20. In these appeals, it is not in doubt that the appellant was buying and selling carg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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