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2012 (12) TMI 477 - CESTAT NEW DELHIClassification of service - Broker v/s Commission agent - demand of service tax under Business Auxiliary Service - activities of the appellants as ship brokers - period of dispute from October 2003 to September 2009 - Held that:- Definition of 'commission agent' as given in Section 65(19) during period w.e.f. 16/5/05 and as given in exemption Notification No. 13/03-ST dated 20/6/03 for the period prior to 16/5/05, the emphasis is on the 'commission agent' acting 'on behalf of another person. Thus, a 'commission agent' acts on behalf of a principal and sells or buys the goods or provides or receives the services on behalf of his principal for some commission & can also deal with the goods or services, collect payment for sale price of goods or services sold or provide guarantee for the payment or undertake any activity relating to such sale or purchase of such goods or service. A ship broker is essentially a broker, a specialist intermediaries for negotiations between ship owner and charterers who use the ship to transport some cargo or between the buyers and sellers of the ship. A ship broker bring together a ship owner who wants employment/fixture for his ship located at a particular Port and ship charterer who requires a particular type of ship at or around a particular Port to transport some cargo. They help in negotiating the terms of the charter and finalisation of charter-party agreement and also assist both the parties in compliance of the charter - party terms and full and final settlement of all the dues and claims. The ship broker also acts as an intermediary for bringing together a ship owner who wants to sell his ship and the prospective buyer and assisting in sale of the ship. The essential ingredient of a 'Commission agents' service is acting on behalf of a principal which is missing is the case of the appellants. From the nature of their activity it is clear that brokers are purely intermediaries who do not act on behalf of either ship owner or the charterer and, therefore, they cannot be said to be commission agents & not covered by the definition of 'Business Auxiliary Service" - in favour of assessee.
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