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2024 (3) TMI 285 - CESTAT ALLAHABADLevy of service tax - Support Services of Business or Commerce - receipt collected from the clients towards ocean freight - eligible documents under Rule 9 of Cenvat Credit Rules, 2004 or not - imposition of consolidated penalties under Section 76, 77 & 78 of the Act - extended period of limitation - HELD THAT:- The issue in dispute is no longer res integra. Mere purchase and sale of booking cargo space is not a “Service’ and the surplus income/receipts earned is not consideration towards rendition of any “BSS” to their client and hence not liable to service tax. Neither the transaction is amenable to Service Tax under the category oBusiness Auxiliary Service nor under 'Business Support Service' and thus, the demand of service tax confirmed vide the impugned Order is not sustainable and is liable to be set aside. Further, in the case of M/S. CONSOLE SHIPPING SERVICES INDIA PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, DELHI-II [2023 (5) TMI 192 - CESTAT NEW DELHI], the Tribunal held that the income/receipts under the head of airline commission and airline incentive was not taxable under BAS as the Appellant assessee was not buying and selling space on the airline on behalf of their client but on their own account as the they were directly buying themselves and thereafter selling the same to the exporters. Therefore, the said activity cannot be considered as BAS since the statute requires at least three parties to be involved in the transaction namely the service provider, service recipient and the client which was not the case involved. Hence, Service Tax was not payable. Extended period of limitation - Penalties - HELD THAT:- It is imperative to state that the Appellant assessee had discharged their tax liability towards terminal handling services, documentation service, Bill of Lading service, etc., even when they were not required to do so under the existing law during the relevant period. This further establishes bona fide intent of the Appellant assessee - the Appellant assessee cannot be alleged to have suppressed facts with mala fide intention. Once the demand is not sustainable on merits as elaborated above, for the same reasons the imposition of penalties upon the Appellant assessee under Section 77 and Section 78 of the Finance Act, 1994 are liable to be set aside. Furthermore, considering that the demand itself has no foundation, the benefit of Section 80 of the Finance Act permitting waiver of penalty is extendable and no interest is recoverable under Section 75 of the Finance Act when it has been established that demand is not sustainable. The impugned order cannot be sustained and is therefore set aside - Appeal allowed.
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