9911796707
TMI Blog2024 (12) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of cargo space in a ship, does not amount to rendering a service and any profit and income earned through such transactions would not be leviable to Service Tax. Under the circumstances, when the appellant is acting on a principal to principal basis, as regards purchase and selling of space from shipping line/airline and selling to importers/exporters we are of the view that the said act would not amount to an activity liable to Service Tax. This is particularly so when they are not acting as an agent/intermediary for promoting the business of the shipping lines/ and airlines and the transactions of the appellant are independent of both backward and forward integration of the activities performed. The order of the lower authority is set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the department alleged that no Service Tax was paid by the appellant on the mark up collected by way of ocean freight (mark up - i.e. difference between the amount charged from the customers towards sea/air freight and the amount paid to the shipping line/airline). The department therefore alleged that the said mark up was a consideration liable to Service Tax as the nature of service rendered by the appellant could not be considered as transportation of goods. It is also the contention of the department that the transportation is actually rendered by the shipping lines/airlines to the exporters importers for which a consideration has been received by way of ocean/air freight charges, and that the Service Tax exemption pertains to transpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty under Section 76, 77 and 78 of the Finance Act, 1994. 4. We have heard Shri P.K.Sahu, Ld.Advocate for the appellant and Ms. Jaya Kumari, Ld.Authorized Representative for the department and perused the case records. 5. While the Ld.Authorized Representative for the department reiterates the findings of the impugned order, the Ld.Advocate s primary contention being that they are a freight forwarder, engaged in providing transportation service by air and sea. He has inter alia submitted that the issue is no more res integra and is covered by a series of judgements on the subject. In his pleadings, the Ld.Advocate submitted that the appellant was engaged in transportation of goods from a place in India to outside India and vice versa and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elling of cargo space in a ship, does not amount to rendering a service and any profit and income earned through such transactions would not be leviable to Service Tax. The relevant para of of the order passed by the Tribunal is reproduced below:- 6 . We have considered the arguments on both sides and perused the records. It is not in dispute that the appellant herein is purchasing the space from the shipping lines and then is selling the same to exporters. It is the case of the Revenue that this amounts to acting as an intermediary for helping the business of the shipping lines and therefore they are liable to pay service tax on business auxiliary services on the profit which they receive. It is the case of the appellant that this is a dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of transportation is provided by the airline/carrier/ocean-liner and the freight forwarder is merely an agent and the service of actual transportation will not be liable for service tax under Rule 10 of POPS. 2.2 The freight forwarders may also act as a principal who is providing the service of transportation of goods, where the destination is outside India. In such cases the freight forwarders are negotiating the terms of freight with the airline/carrier/ocean liner as well as the actual rate with the exporter. The invoice is raised by the 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing to say :- 5. The appellant is primarily engaged in the business of freight forwarding, clearing and forwarding and other allied activities that involve booking of Containers/Air Cargo with various Shipping Lines/Airines for their customers and recovering other miscellaneous charges from their customers (mainly importers and exporters). The appellant provides cargo space to the customers who are importers/exporters of goods. The appellant pays charges for space booking to different Shipping Lines/Airlines and later on sells such space to the exporters/importers at a slightly higher amount. The difference between the amount paid by the Appellant to the Shipping Lines/Airlines and the amount recovered by the Appellant from the customers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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