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2016 (10) TMI 680 - CESTAT NEW DELHI

2016 (10) TMI 680 - CESTAT NEW DELHI - TMI - Levy of service tax - taxability of secondary services - commission received for booking of cargo space in various airlines as well as shipping lines - Business Auxiliary Services - Section 65 (19) of the Finance Act, 1994 - whether appellant is justified in holding that no service tax will be liable on the brokerage/commission received by them in the light of the CBEC Circular No. 56/5/2003-ST dated 25th April, 2003? - Held that: - if the secondary s .....

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NGALORE] relied upon where it was held that the appellants are secondary service providers for the shipping lines, brokerage commission of 2% paid for booking of export cargo cannot be taxed under the category of 'Business Auxiliary Services'. - Demand not sustainable - interest and penalty also fails - appeal allowed - decided in favor of appellant. - Service Tax Appeal No. 1561 of 2010 (SM) - Order No. A/53632/2016/2016-SM[BR] - Dated:- 16-9-2016 - Shri V. Padmanabhan, Member (Technical) S .....

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007. The appellant has undertaken booking of cargo space in various airlines as well as shipping lines. These were for export of goods. For this activity, they receive commission and incentive from airlines. Revenue took the view that such commission received will be liable to service tax under the category of Business Auxiliary Services which is covered under Section 65 (19) of the Finance Act, 1994. The dispute covers the period 2002 - 2007. A demand for service tax to the tune of ₹ 9,46 .....

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on identical set of facts:- (i) Ruth Shipping Agencies Pvt. Ltd. vs. CCE, Thirunelveli reported in 2010 (19) S.T.R. 39 (Tri.- Chennai) ; (ii) Lee & Muir Head Pvt. Ltd. vs. CST, Bangalore reported in 2009 (14) S.T.R. 348 (Tri. - Bang.). 2. I have heard Shri Rupesh Sharma, learned Advocate for the appellant as well as Shri H.C. Saini, learned DR. 3. The activity undertaken by the appellant is selling of space for booking export cargo with various airlines and have received commission/brokerage .....

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the service tax would be leviable on the secondary service provider. For this purpose both primary and secondary service providers would maintain the records deemed fit by them to identify the secondary services with services that are being exported". 4. It may be seen from the above that if the secondary services gets consumed with the services that are being exported, no service tax will be liable on such secondary services. It is not being disputed that the activity undertaken by the ap .....

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