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2023 (12) TMI 527 - CESTAT CHENNAILevy of service tax - mark-up on freight charges - ocean freight - air freight - activity of the appellant in arranging transportation of the cargo - service or not - HELD THAT:- On perusal of the Annexure to the Show Cause Notice, it is seen that the demand is raised not only on the mark-up but also on the ocean freight and air freight. These charges are not subject to levy of Service Tax during the disputed period. The mark-up received by the appellant on the freight charges is due to the difference in the freight charges collected from the shipper and paid to the shipping / airliners. The issue is no longer res integra, the Tribunal in the case of M/S. TIGER LOGISTICS (INDIA) LTD. VERSUS COMMISSIONER OF SERVICE TAX-II, DELHI [2022 (2) TMI 455 - CESTAT NEW DELHI] held that the activity is trading of cargo space and there is no rendering of service. The demand of Service Tax on mark-up / differential of ocean freight was set aside. In the case of M/S. DIRECT LOGISTICS INDIA PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX BANGALORE SERVICE TAX- I [2021 (9) TMI 500 - CESTAT BANGALORE], the demand was raised on the mark-up received on the difference between the freight charges collected and paid to the shipping liners where it was 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. The Tribunal in the case of M/S. EMU LINES PVT. LTD. VERSUS COMMISSIONER OF CGST & CE, BELAPUR [2023 (6) TMI 64 - CESTAT MUMBAI] had considered the very same issue where the demand of Service Tax was raised under Business Auxiliary Services. It was held by the Tribunal that the activity does not amount to rendering of service and it is merely trading of cargo space. The said decision was upheld by the Apex Court in COMMISSIONER OF CGST AND CE BELAPUR VERSUS M/S EMU LINE PVT. LTD. [2023 (2) TMI 1155 - SC ORDER]. Thus, the demand of Service Tax on ocean freight / air freight or the mark-up on the above received by the appellant cannot be subject to levy of Service Tax - the impugned orders set aside - appeal allowed.
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