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TMI Blog2025 (1) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... endering CHA service are receiving Air freight from the clients and paying the same to the Airlines for forwarding cargo. As freight forwarders they are procuring the services of providing cargo space by airlines for their clients use for the export of goods which appeared to be classifiable under 'Business Auxiliary Service' under the category of procurement of goods or services which are inputs for the client with effect from 10.09.2004. This mark up on the cost incurred on the air freight appear to be the consideration received for rendering the above services and will form part of the value of such taxable service and service tax is payable on the paid differential freight charges under 'Business Auxiliary Service'. Hence show cause not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee and held that the additional amount would not be liable to service tax. Relevant portion of the Final order supra is reproduced below for convenience: "5. The issue whether the respondent is liable to pay service tax for the activity of booking space and selling the same to the client for air cargo goods has been decided by the Tribunal in the decisions cited by the ld. Counsel for the respondent. The Tribunal has held the issue in favour of the respondent. The relevant portion of the decision in the case of Continental Carriers (supra) is reproduced as under : - 5. We have heard both sides and perused the material available on record. We note that the tax liability on similar activities under the category of 'Business A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght to be taxed under BAS. It is seen that the said income is generated during the course of booking of bulk cargo by the appellant with the airline. The appellant have received the incentive and commission from the airline. The appellants are engaged in buying and selling of space in the airline and depending on the volume of the space bought by the appellant from the airlines they received the commission/incentive. The appellants are not buying and selling space on the airline on behalf of their client but on their own behalf. To consider the activity of buying and selling the taxable activity under the head of BAS, the same should be done on behalf of the client Thus, if the appellants were selling the space on carrier from the airline d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not a taxable activity under Finance Act, 1994. We are in agreement with the findings recorded by the original authority, In this connection, we refer to the decision of the Tribunal in Greenwich Meridian Logistic (I) Pvt Ltd. v CST, Mumbai - 2016 (43) STR 215 (Tri-Mumbai) = 2016- TIOL-869-CESTAT-MUM. The Tribunal examined similar set of fact and held that the appellants often, even in the absence of shippers, contract for space or slots in vessels in anticipation of demand and as a distinct business activity. It is a transaction between principal to principal and the freight charges or consideration for space procured from shipping-lines. The surplus earned by the respondent arising out of purchase and sale of space and vessel. It cann ..... X X X X Extracts X X X X X X X X Extracts X X X X
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