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TMI Blog2024 (5) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... aw prevalent at the relevant time. During the course of enquiry of the financial record of the appellant, the department observed that freight income as being expenses incurred towards freight expenses were less than freight charged by the appellant from their customers. There was some positive difference in expenses which has been incurred by the appellant. This income as per the department is nothing but excess amount charged by the appellant from their customers towards ocean freight. The department after verification of the accounts, issued a show cause notice to the appellant demanding service tax of Rs. 3,93,172/- under Section 73(1) of the Finance Act, 1994. The interest and penal provisions were also invoked as per the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of provision of service is outside taxable territory of India therefore ocean freight for the export cargo becomes non-taxable. The appellant has taken us through an extract form of educational guide issued in June 2012 and submitted as follows:- "An extract form "Taxation of services; an Educational Guide, June 20,2012 by CREC" (page no. 67 to 69) (post-negative list regime). Illustration : A freight forwarder arranges for export and import shipments. There could be two possible situations here one when he acts on his own account, and the other, when he acts as an intermediary. 1. When the freight forwarder acts on his own account (say, for an export shipment) A freight forwarder provides domestic transportation within taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CST, Bangalore - 2007 (7) STR 277 (Tri. Bang.) (c) Kerala Publicity Bureau vs. CCE - 2008 (9) STR 101 (Tri. Bang.) (d) Skylift Cargo Pvt. Limited vs. CST, Chennai - 2010 (17) STR 75 (Tri. Chennai) (e) Baroda Electric Meters Limited vs. Collector of Central Excise - 1997 (94) ELT 13 (SC) 3. We have also heard Shri Ajay Kumar Samota, learned Departmental Representative who reiterated the findings as given in the impugned order-in-appeal. 4. Having heard both the sides, we take note of the fact that except for the brief period for November/ December, the majority of demand pertains to post negative period of service tax. In this regard, we take note of the CBEC Circular on the subject, which is reproduced as below:- "2.1 The frei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... freight forwarder on the exporter. In such cases where the freight forwarder is undertaking all the legal responsibility for the transportation of the goods and undertakes all the attendant risks, he is providing the service of transportation of goods, from a place in India to a place outside India. He is bearing all the risks and liability for transportation. In such cases they are not covered under the category of intermediary, which by definition excludes a person who provides a service on his account." 5. We understand that in the case before us, the appellant would enter into an agreement with the carrier for transportation of cargo i.e. airline/shipping line. This service agreement would be on principal to principal basis and not a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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