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2024 (4) TMI 474 - AT - Service TaxRecovery of Service Tax - Business auxiliary services - sale and purchase of cargo space - demand of service tax on the difference between the amounts shown in the TDS certificates issued by the airlines to the appellant and the amounts on which the appellant had paid service tax - HELD THAT:- If the cargo space is sold by the airlines to the appellant, and by the appellant to the exporter, there is no privity of contract between the airlines and the exporter. The appellant gets the cargo space on that flight and pays the airlines for it. There is another contract between the appellant and the exporter whereby the appellant sells a part of the cargo space which it had bought to the exporter and the exporter pays the appellant. In such an arrangement, the appellant is not acting as an agent of the airlines but as an independent business acting on its own account. Since the appellant buys the cargo space in bulk, the airlines offers a better price and the appellant sells the cargo space at a higher price to the exporter and earns a profit. Neither is the appellant a service provider nor is the airlines a service recipient in such an arrangement and no service tax can be levied. This issue is no longer res integra and it was decided so in COMMISSIONER OF SERVICE TAX, MUMBAI VERSUS GREENWICH MERIDIAN LOGISTICS (I) PVT LTD [2013 (8) TMI 453 - CESTAT MUMBAI], M/S. TIGER LOGISTICS (INDIA) LTD. VERSUS COMMISSIONER OF SERVICE TAX-II, DELHI [2022 (2) TMI 455 - CESTAT NEW DELHI] and M/S BHATIA SHIPPING PRIVATE LIMITED VERSUS COMMISSIONER OF SERVICE TAX-I, MUMBAI [2022 (1) TMI 1175 - CESTAT MUMBAI]. In these appeals, it is not in doubt that the appellant was buying and selling cargo space on airlines and it has been specifically recorded so in the impugned order dated 1.3.2016. The Commissioner, however, confirmed the demand under the erroneous impression that unless the buyer becomes a permanent owner of the cargo space, this arrangement amounts to rendering a taxable service and accordingly confirmed the demand. The demands for the subsequent periods were confirmed on the same grounds. The impugned orders cannot be sustained and need to be set aside - appeal allowed.
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