TMI Blog2018 (6) TMI 1362X X X X Extracts X X X X X X X X Extracts X X X X ..... t the recipient-client would normally have to undertake to carry out its business of manufacture or service and which includes delivery to the customer but which, instead, is outsourced to the service provider. The facility of ‘international ship and port security’ and ‘special equipment’ could not have been offered by the appellant. Only the shipping line could have offered the facility and, if it was not a constituent of freight costs, as a service provided from outside India for use in India should have been subject to tax under section 66A of Finance Act, 1994 and its successor provisions. The same activity could not have been subject to tax again under section 66 of Finance Act, 1994. The shipping line offers these two facilities i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harge of tax liability on the international ship and port security charge and special equipment surcharge included in invoices in which documentation fees on which tax liability was discharged basic freight bunker adjustment factor and terminal handling charges which were not liable to tax were also enumerated. 2. The demand in the first notice that was confirmed straddles the pre-negative list and the negative list eras; during the former, the taxability has been fastened as provider of support services of business and commerce chargeable to tax under section 65 (105) (zzzq) of Finance Act, 1994 considering the activity to be management of distribution and logistics listed in the inclusive portion of the definition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that 6.4 .. We do not find any reason for giving a specific definition of such terms in the Customs Act/FTDR Act. The terms like FOB, CIF, CIP are well known Incoterms (International commercial terms} .In the light of the above, the claim of the appellant-company that amounts paid in the name of FSC, SCC etc., to the carriers engaged in international transportation is not part of freight and need not be deducted from CIF value to arrive at the FOB value cannot be accepted and the same deserves to be rejected. to sustain the contention that payments made to shipping lines, whatever be the description, are to be considered as freight and, therefore, exempt under both regimes. Learned Authorized Representative drew atten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s thus evident that the appellant was entrusted to manage distribution and logistics in relation to transport and delivery of the vehicles at the service recipient s depots/dealer s premises. It was not merely making available skilled drivers to the service recipient. Indeed, the drivers were never provided the service recipient but were engaged by the appellant to fulfil its responsibility as per the agreement. Its responsibility as per the said agreement was not merely executory but required proper management supervision and coordination of various aspects relating to fulfilment of its responsibilities as per the said agreement. Therefore the services rendered clearly fell under the scope of managing distribution and logistics. he a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well-known to bear repetition that freight is collected by shipping lines before cargo is loaded thus placing the burden for payment upon the shipper with whom, or with whose representative, the shipping line has a contract for carriage to destination. The consideration received by the appellant is, therefore, restricted to collections from exporters. 6. Undoubtedly, carriage of goods is a service but the freight received for such carriage is dispensed from taxability, either by nonimposition or by specific exclusion, which has motivated recourse to some specific taxable entry in the pre-negative list regime even by some indirect reference. The decision in re Capital Transport Convoy Contractor was rendered in the context of a claim tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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