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2021 (7) TMI 1088 - AT - Service TaxLevy of service tax - Customs House Agent Services - business of freight forwarding wherein various activities in relation to transportation of goods in the course of import/export by sea and air undertaken - non-taxable service - non-taxable territory - Circular of the Board No. 197/7/2016-S.T dated 12/08/2016 - extended period of limitation - HELD THAT:- The appellant is authorized to act as a CHA under Customs Housing Agent Licensing Regulations and has been granted a license. Further, it is found that the main revenue of the appellant comes from providing exclusive freight forwarding activity which accounts for substantial income of the appellant. Perusal of the definition of ‘CHA’ as provided in the Finance Act as well as in Regulation, it is found that the scope of CHA service is restricted only to the licensed activities relating to either (a) entry or departure of conveyances at any Customs Station or (b) import or export of goods at any Customs Station. Further, it is found from the definition of ‘CHA’ Services that freight forwarding is an activity outside the scope of a CHA’s business, and freight forwarding is undertaken to get the goods transported from/to international boundaries to/from the Indian ports and the said activity is not in any way related to CHA’s business and CHA is not required to execute these services in the course of CHA’s business - further, as per Section 67 of the Finance Act, 1994 only ‘any amount’ that is ‘payable for the services provided or to be provided’ shall be included in consideration and any amount received is not related to the services provided cannot be included in Section 67. There are force in the submissions of the learned counsel for the appellant that in case of export freight, no service tax is payable because the said service is non-taxable service and is provided in a non-taxable territory. It is also found that with regard to export freight, the Circular of the Board No. 197/7/2016-S.T dated 12/08/2016 amply clarifies this position. Extended period of limitation - HELD THAT:- The ingredients mentioned in terms of proviso to Section 73(1) has not been fulfilled by the Department and moreover in the present case, the appellant has a bona fide belief that they are not liable to pay service tax on the differential freight amount collected - the issue involved relates to interpretation of provisions of a statute and in such a situation, extended period cannot be invoked. Appeal allowed - decided in favor of appellant.
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