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TMI Blog2024 (8) TMI 1104X X X X Extracts X X X X X X X X Extracts X X X X ..... T:- There is no taxable service rendered by the appellant to the shipping lines and the commission earned is on account of booking of cargo with the shipping lines over the years. This amount is not liable for service tax under the category of business auxiliary service, as there is no agreement of 'commission agent' between the Appellant and shipping lines - This view has been taken by the Larger Bench of the Tribunal in the case of Kafila Hospitality Travels Pvt. Ltd. [ 2021 (3) TMI 773 - CESTAT NEW DELHI (LB)] , wherein it has been held that the commission earned for selling of space by the shipping lines is not liable to service tax under the category of business auxiliary service - the demand confirmed in the impugned order on this count is not sustainable and is set aside. Cargo handling services - HELD THAT:- It is observed that the demand of service tax has been confirmed by the ld. adjudicating authority on the amounts received by the appellant as 'reimbursable expenses' during the course of provision of CHA services. It is found that the such expenses received by the appellant are related to AD Code Registration charges, Custom Clearance charges, Port char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HON BLE SHRI ASHOK JINDAL , MEMBER ( JUDICIAL ) And HON BLE SHRI K. ANPAZHAKAN , MEMBER ( TECHNICAL ) For the Appellant : Shri Ankit Kanodia , Advocate Ms. Megha Agarwal , Advocate For the Respondent : Shri Debapriya Sue , Authorized Representative ORDER ORDER : [ PER SHRI K. ANPAZHAKAN ] M/s. Speedways Logistics Pvt. Ltd. (hereinafter referred as the Appellant), having STC No. AABCG0609FSD002 is engaged in the business of providing services of transport of good by road, CHA, freight forwarders etc. On the basis of an investigation initiated by DGGI, a Show Cause Notice dated 24.05.2018 was issued to the Appellant demanding service tax of Rs.3,02,29,255/-, including Cess, for the period 2012-13 (January to March 2013) to 2016-17. The Notice was adjudicated by the Ld. Commissioner of C.G.S.T. C.Ex., Kolkata South vide the impugned Order-in-Original No. 28/Commr/ST-II/KOL/2018-19 dated 30.11.2018 wherein the Ld. Commissioner has confirmed the entire demand of service tax as proposed in the Show Cause Notice along with interest and penalty. Aggrieved against the impugned order, the appellant has filed this appeal. 2. The appellant submits that the demand of service tax confined in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant states that the issue of taxability of profit earned on ocean freight, is no longer res integra as the same issue has already been decided by various Tribunals in favour of the appellant. In support of their submission, the Appellant relied on the following decisions: a. Tierra Logistics Pvt. Ltd. vs Commissioner of CGST and Central Excise, Kolkata South (25.09.2023 - CESTAT - Kolkata): MANU/CK/0324/2023 b. Haiko logistics India pvt. Ltd. Versus Commissioner of Service Tax - DELHI-III [(2023) 13 Centax 79 (Tri.-Del)] c. M/s Balmer Lawrie and Company Ltd. Vs The Commissioner Of Service Tax Delhi II Commissionerate [2023-TIOL-346-CESTAT-DEL] d. M/s Tiger Logistics (India) Ltd. vs Commissioner of Service Tax-II, Delhi [2022 (63) G.S.T.L. 337 (Tri. - Del.)] e. Bhatia Shipping Private Limited vs Commissioner of Service Tax, Mumbai [2022-TIOL-116-CESTAT-MUM] f. Direct Logistics India Pvt. Ltd. Versus Commr. Of ST., Bangalore S.T.-I [2021 (55) G.S.T.L. 344 (Tri. - Bang.)] Accordingly, the appellant submits that the demand confirmed in the impugned order on this count is not sustainable. 2.3. As regards demand of Service Tax of Rs. 46,39,520/- (including cess) in relation to cargo ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as no consignment note issued by such persons to the Appellant; the goods were moved on the consignment note issued by the Appellant to their customers and on the value of which the customers of the Appellant were paying service tax under reverse charge mechanism as per section 68(2) of the Finance Act, 1994. The Appellant submits that the Ld. adjudicating authority has totally erred in not allowing the benefit of exemption Notification No. 25/2012-ST dated 20.06.2012; he has not even discussed the eligibility of the benefit of the notification to the appellant in the order passed. Thus, the Appellant submits that the demand confirmed in the impugned order on this count is not sustainable. 3. The Ld. Authorized Representative appearing for the Revenue reiterated the findings in the impugned order. 4. Heard both sides and perused the appeal documents. 5. We observe that the ld. adjudicating authority has confirmed the demand under various categories. The Appellant has accepted the demand of service tax of Rs.2,96,020/- confirmed in the impugned order on the Director Sitting Fees and contested the remaining demands. Regarding the demand of Rs.2,96,020/- confirmed on the Director Sitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices and, therefore, it is the value of the services which are actually rendered which has to be ascertained for the purpose of calculating the service tax. It is for this reason that the expression such occurring in section 67 of the Act assumes importance. The Supreme Court, therefore, observed that the authority has to find what is the gross amount charged for providing such taxable services and so any other amount which is calculated not for providing such taxable service cannot be a part of that valuation as the amount is not calculated for providing such taxable service . This, according to the Supreme Court, is the plain meaning attached to section 67, either prior to its amendment on 1 May, 2006 or after this amendment. 77. Consideration, which is taxable under section 67 of the Finance Act, should be transaction specific. Incentives, on the other hand, are based on general performance of the service provider and are not to related to any particular transaction of service. It needs to be noted that commission, on the other hand, is dependent on each booking and not on the target. If the air travel agent does not achieve the pre-determined target, incentives will not be paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trial balance. It has been held that the excess realization effected during the course of providing or arranging freight facility to the customer would fall within the purview of Business Support Service in terms with Section 65 (105) (zzzq) of the Finance Act 1994. In this regard, we observe that the principal to principal transactions of buying space for transportation of containerized goods outside the territorial water of the country and selling the same to the other entities involves the Appellant taking the risk of making commitment for canvassing cargo for allotment of space as a principal. As per the definition of Business Support Service, any activity which is rendered on behalf of another person ie, when the relationship is in the nature of principal-to-agent, then only such activity is liable to service tax under the category of Business Support Service. In the instant case, the Appellant were buying the space for transportation of containerized goods outside the territorial water of the country and selling the same to their clients in their own capacity and is not obligated to work on principal-to-agent relationship. Accordingly, we hold that the income received by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ip but due to market conditions, had to sell the space to its customers at a lower price incurring loss. Therefore, in our considered view, the profits gained by the appellant by buying space on ships at lower price and selling at a higher price to the customers cannot by any stretch of imagination be called Clearing and Forwarding Agent Service . No service tax can be charged on this amount. On an identical question, in the case of Sea max Logistics Ltd. v. Commissioner of Central Excise and Service Tax, Tirunelveli, reported in 2018(7) TMI262-CESTAT Chennai has held that no service tax is chargeable on the difference between the ocean freight collected from the clients and the ocean freight paid to the shipping lines. ............................................................ 19. In view of the above discussions and by following the decisions of the Tribunals cited by the Appellant refereed above, we hold that the demands confirmed in the impugned order on this count is not sustainable and accordingly, we set aside the same. By relying on the decision of the Tribunal cited above, we hold that the demand confirmed in the impugned order on this count is not sustainable and accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng cess) on transportation charges as recipient of services, we observe that the demand has been raised on the basis of the head of expense mentioned by the Appellant in the trial balance sheet. The Appellant submits that in order to run their business of transportation, they have hired trucks from various individuals as well as local markets who in turn transported the goods of the customers of the Appellant. The individual truck owners raise invoices for the transportation done on the behalf of them and they in turn collect these charges from the customers for providing the said transport services. The Appellant submitted copies of invoices raised by the truck owners. On verification, we find that these invoices were raised for Hire charges and not for transportation of goods, except one invoice raised by M/s. Rishab Trans Management dated 05.01.2017. Copy of the same is extracted below : - From the invoice extracted above, we observe that the invoice has been raised on the Appellant for transportation of the goods and it has been categorically mentioned in the said invoice that the Service Tax is to be paid by the Party. Accordingly, in respect of this invoice, the liability of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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