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2018 (6) TMI 1362 - AT - Service TaxSupport services of business and commerce - taxability of Freight - basic freight - bunker adjustment factor - terminal handling charges - The impugned order takes note of the discharge of tax on ‘documentation fee’ and discards the claim of the appellant that the disputed components are also freight which, admittedly, did not find fitment in section 65 of Finance Act, 1994 and was specifically excluded under the negative list in section 66D of Finance Act, 1994 and the Place of Provision of Service Rules, 2012 - Held that:- ‘Support service of business or commerce’ are activities that 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 in relation to transport of goods. It is, therefore, clear that legislative intent did not cover any facility that was offered on the carrier vessel and any attempt to deviate from the legislative intent would have the absurd outcome of taxing the consideration under two mutually exclusive provisions of Finance Act, 1994. The consideration sought to be taxed is freight and, with freight excluded from tax during the relevant period, the demand cannot be sustained - appeal allowed - decided in favor of appellant.
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