TMI Blog2014 (6) TMI 591X X X X Extracts X X X X X X X X Extracts X X X X ..... nt by providing marketing information in a reciprocal manner and by creating condition in the foreign land wherefrom a support in conducting the logistic service by providing their ready infrastructure for catering the needs of client of the Applicant. Held that:- services provided by the OLSPs to the Applicant were business auxiliary services because the activities of the OLSPs satisfied the categories appended under (vi) and (vii) of the definition of 'Business Auxiliary Service'. We find that OLSPs not only provided service of clearing and forwarding on behalf of the Applicant, but they also undertook incidental or auxiliary services like collection of payment, management or supervision job. We also find that OLSPs provided a number o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice Providers (OLSPs in short) entered into an Agreement with the Applicant, M/s. TKM Global Logistics Ltd. for providing the entire clearing and freight forwarding services including collection of cargo from the customer's place, arranging for storage in the foreign land, Customs clearance, booking space with the airline and shipping lines, landing over the cargo to airlines or shipping lines for shipment and informing the Applicant regarding dispatch of cargo. The OLSPs facilitated the business of the Applicant by providing marketing information in a reciprocal manner and by creating condition in the foreign land wherefrom a support in conducting the logistic service by providing their ready infrastructure for catering the needs of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. 4.2. The contention is that the entire services are rendered outside India and therefore, no tax is payable by the applicant under the Import Service Rules. 4.3. The contention is that the services have been rendered as also acknowledged specifically in the impugned Order to the Applicant under principal to principal based contracts/agreements by and between the two parties. The customers of the Applicant were in no way concerned therewith. In such circumstances, the service was rendered by the OLSPs to the Applicant and not on behalf of the Applicant (its clients) or to anyone else. Therefore, there is no service rendered as envisaged under Section 65(19)(vi) of the Act. The contention is that all services rendered by them are, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... job. The contention is that the services provided by the OLSPs to the Applicant as business auxiliary service because the activities of the OLSPs satisfy the categories appended under Clauses (vi) and vii) of the definition of 'Business Auxiliary Service'. The contention is that OLSPs not only provided service of clearing and forwarding on behalf of the Applicant, but they also undertook incidental or auxiliary services like collection of payment, management or supervision job. The contention is that OLSPs provided a number of services to the Applicant till they intimated M/s. TKM Global regarding dispatch of cargo and in doing so, they rendered services on behalf of the Applicant. Thus, they provided the services, incidental or au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Applicant failed to pay Service Tax on the said services received from the overseas buyers and these facts were not brought to the notice of the Department. 6. We find that the Applicant themselves admitted that they had entered into agreements with various OLSPs to obtain their service in order to accomplish the overseas part of the clearing and forwarding job. The services provided by the OLSPs to the Applicant were business auxiliary services because the activities of the OLSPs satisfied the categories appended under (vi) and (vii) of the definition of 'Business Auxiliary Service'. We find that OLSPs not only provided service of clearing and forwarding on behalf of the Applicant, but they also undertook incidental or auxili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the learned Advocate for the Applicant that prior to insertion of Section 66A of the Finance Act, 1994 i.e., with effect from 18.04.2006, Service Tax for the amount of Rs.2,11,90,438.00 is not payable, as held by the Hon'ble Bombay High Court in the case of Indian National Shipowners Association (supra). Consequently, the demand of the Service Tax for the amount of Rs.2,11,90,438.00 for the period from April, 2005 to 18.04.2006 ought to be deducted from the total amount of Service Tax liability of Rs.22,25,87,789.00. In these circumstances, we find that Applicant are not able to make out a prima facie case for total waiver of predeposit of the Service Tax and the penalties. The Applicant pleaded for financial hardship, but they did no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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