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2024 (3) TMI 1283 - AT - Service TaxLevy of service tax - collection of excess amount from customers over and above the actual ocean freight paid to the shipping lines - period from April 2012 to September 2012 - HELD THAT:- The Adjudicating Authority has considered in Paragraphs 10.4 and 10.5 that the amount collected during the course of providing the Steamer Agent Service is subject to levy of Service Tax. However, he has not stated under which category and how this amount is an excess amount collected as freight would be consideration and the appellant has paid the Service Tax on the commission received as Steamer Agent. The amount collected is some excess of ocean freight as they were not able to quantify the exact freight to be paid to shipping lines. The ocean freight cannot be subjected to levy of Service Tax as it is not a consideration for Steamer Agency Services. The Department itself admits that these are amounts collected in excess of ocean freight. There is no provision for levy of Service Tax on ocean freight. Further, as per the decision in the case of MESSRS SAL STEEL LTD. & 1 OTHER (S) VERSUS UNION OF INDIA [2019 (9) TMI 1315 - GUJARAT HIGH COURT], the Hon’ble High Court has held that the demand of Service Tax on ocean freight cannot sustain. It is found that though Department alleges that the appellant has collected excess amount towards freight, the Show Cause Notice does not say as to which category of service the said amount would be liable to Service Tax. So also, it is not stated whether the amount is consideration for Steamer Agency Service. The Show Cause Notice does not propose to include the amount under particular category of service and demand the Service Tax under any category. The Adjudicating Authority has not made any finding as to whether the excess amount collected would be consideration for service. The Show Cause Notice is the foundation of the litigation. When the Show Cause is insufficient as to clarify the category of service, the demand cannot sustain and requires to be set aside. The impugned order is set aside - The appeal is allowed
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