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2023 (8) TMI 472 - AT - Service TaxDemand of service Tax - Business Auxiliary Service - Non-payment/short payment of service tax - Incentive/ Commission - Ex-Works (EXW) Services - Destination Charges. Incentive/ Commission - Discount received by the appellant from the shipping lines/ airlines on sale of space by the shipping line/ airline to the appellant which is reflected as incentive/ commission/ market price adjustment in the books of accounts of the appellant - HELD THAT:- The Revenue has picked up some activities, from the bundle of services rendered by the appellants, in a convenient manner. One has to see the nature of the service in total. Segmenting the series of actions involved in the provision of a particular service, would result in ridiculous propositions. The Department has not viewed the service rendered by the appellants in a holistic manner, ignoring the very fact that the services rendered by the appellants are not complete just by loading of the goods on a vessel or on an aircraft. They go beyond. If the case of the Department is accepted, the provisions of Section 66F of the Finance Act, 1994 would become redundant. Such an approach is not permissible under the law. Ex-Works (EXW) Services - Providing logistic and allied/ ancillary services to the main service of transportation of cargo - HELD THAT:- Other than alleging that the appellants have rendered “Business Auxiliary Service” to the ship liners/ airlines, it is not brought forth as to which category of the “Business Auxiliary Service” is rendered by the appellants. It is also not explained as to how the service rendered by the appellants enhances the business prospects of the ship liners/ airlines. It is a simple case of booking of space and selling of the same by the appellants - the issue stands settled by the Tribunal in the case of Kafila Hospitality and Travels Pvt. Ltd. [2021 (3) TMI 773 - CESTAT NEW DELHI] wherein it has been held that these contentions as to whether the air travel agent is promoting the business of the airlines or the CRS Companies have been dealt with in the earlier portion of this order. The order also discusses whether the classification of service would fall under “air travel agents” services or under “BAS” and whether incentives paid for achieving the targets are taxable. Destination Charges - Expenditures such as Custom Duty, Delivery order charges, port handling etc. incurred by the appellant post arrival of the shipment at a foreign port, nomenclature as “Destination Charges" - HELD THAT:- It is found that the amounts collected by the appellants from the Indian clients is towards the expenditure such as customs duty, delivery order charges, port handling at the foreign ports; as the charges pertain to the activity rendered at a foreign destination, the same cannot be charged in India. Moreover, these are in the nature of reimbursement of expenses. Moreover, it is seen that under this Head too, Revenue does not specify as to which was the category under “Business Auxiliary Service”, the services rendered by the appellants fall - there are no type of service rendered by the appellants in regards to promotion of the business of their Indian clients. Their activity and the payments received thereof squarely fall under the main activity of goods transport operator or cargo handler. By no stretch of imagination, it can be argued that the appellants have rendered “Business Auxiliary Service” to their customers. The Hon’ble Apex Court, in the case of Intercontinental Consultants and Technocrats Private Limited [2018 (3) TMI 357 - SUPREME COURT] held that only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax. Thus, the demands confirmed vide the impugned order cannot be sustained - appeal allowed.
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