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2015 (2) TMI 310 - AT - Service TaxWaiver of pre deposit - Business auxiliary service - Steamer Agent service - Export of service - Interest - Penalty u/s 78 - Receipt of brokerage - Held that:- The portion of freight forwarding income retained by the appellant is not the consideration for the alleged service provided by them to Maxx but is actually a sum total of the profit margins that they make in their business of arranging freight for export goods. There is no nexus between the alleged taxable activity and the amount sought to be taxed as consideration. - The activity undertaken by the Appellant amounts to export of service and hence not taxable. During the relevant period services provided by a person situated in India and received by a person situated outside India was not taxable, if the service were to be categorized as Business Auxiliary Service. The brokerage of 2% per shipment received by the Appellants from the shipping lines is merely an incentive given by the shipping lines for choosing their company and is not contractually agreed consideration for any activity performed by the Appellants at the behest of the Shipping Lines. - Extended period cannot be invoked with respect to the period July 2003 to March 2008. - Levy of interest is not sustainable when service tax itself is not payable. - There was no intention on the part of the Appellant to suppress facts and such a case has evidently not been made out by the Department. Hence penalty under Section 78 of the Act is liable to be set aside. - The appellant had every reason to believe that neither providing services within warranty period without any consideration not being reimbursed for the defective spares replaced on behalf of the foreign entities would attract service tax. Hence the case is fit for waiver of penalty in terms of Section 80 of the Finance Act, 1994. - Stay granted.
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