TMI Blog2017 (3) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... of a particular service. Mere sale and purchase of cargo space and earning profit in the process is not a taxable activity under FA, 1994 - The facts of the case indicated that the mark-up value collected by the respondent from the exporter is an element of profit in the transaction. The respondent when acting as agent on behalf of airlines/shiplines was discharging service tax w.e.f. 10.09.2004. However, with reference to amount collected from exporters/ shippers the original authority clearly recorded that it is not the case that this amount is a commission earned by the respondent while acting on behalf of the exporter and said mark-up value is of freight charges and are not to be considered as commission. Based on these findings the demand was dropped - demand set aside. Appeal dismissed - decided against Revenue. - ST/2644/2012-ST [DB] - ST/A/52258/2017-CU[DB] - Dated:- 7-3-2017 - Mr. S.K. Mohanty, Member (Judicial) And Mr. B. Ravichandran, Member (Technical) For the Appellant : Mr. Sanjay Jain, D.R. Present For the Respondent : Mr. B.K. Singh, Advocate ORDER Per B. Ravichandran Revenue is in appeal against order dated 25.05.2012 of Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices to the importers/exporters. They have received various other services provided by different agencies, such as port trust, warehouse, packers, transport agents etc. They paid the service charges to these persons/ agencies and collected the same from the clients. From the balance sheets of the respondent, it is clear that their expenditure is much lower than the income. This will indicate that they are charging a mark-up over and above the actual expenditure in obtaining various such services from other agencies. Since the amounts collected from their clients is not on actual basis, these charges are to be included in the gross value for service tax, in terms of Section 67 of the Finance Act, 1994. (b) The respondents earned income on account of incentive and freight difference. The remuneration earned by the respondent from IATA agent/ airlines is akin to the commission as it appeared to be the value received for services provided to IATA agents. Since the respondent did not provide separate accounts of sale/purchase of sea freight and there is no principal to principal transaction between the parties, the brokerage/commission/ incentive/ freight refund has to suffer serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The ld. Counsel relied on the Board Circular dated 21.12.2009 in respect of reimbursable expenditure for CHA service and various decided case laws in support of his contention. 8. We have heard both sides and perused appeal records. On the first issue regarding the valuation for service tax on CHA service we note that the Revenue is contending that the respondent are not getting the money reimbursed in respect of various charges. There is a mark-up and such mark-up will bar the respondent from excluding such charges from the taxable value. We find that no evidence to this effect has been submitted by the Revenue, except the assertion regarding difference in balance sheet figures with reference to expenditure and income. We have examined the discussion and findings recorded in the impugned order. We also note that the original authority had examined the issue in detail with particular reference to Board s clarification dated 21.12.2009. For better appreciation the relevant portion of the impugned order is reproduced below:- 20. I find that the entire issue is based on the documentary evidences, which are essentially to be considered while deciding the concept of the pure a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly supported by documentary evidences adduced and by the said Certificate by the statutory auditors. 23. It is also alleged that the assessee failed to justify that the activities/ services for which the expenses being referred to were in addition to CHA Services provided by the Assessee. It is observed that the basic purpose of raising invoice comprehensively and in combined form for taxable services under the category of CHA Services and also for the said reimbursable expenses against the same client and in the same invoice, categorically indicate that such expenses were referred to in addition to the provisions of CHA services. 24. It is further alleged that the assessee did not bring out on record that they did not use the activities services for their own or for the benefits of other customers. Based on the documentary evidences adduced by the assessee, I am of the view that the issue is redundant for the basic observation that the assessee had raised invoices against their clients for the said services and duly substantiated by respective invoices against the reimbursable expenses, which were raised in the name of the client/subject consignment of the client. By the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the findings recorded by the original authority. In this connection, we refer to the decision of the Tribunal in Greenwich Meridian Logistic (I) Pvt. Ltd. vs. CST, Mumbai 2016 (43) STR 2w15 (Tri- Mumbai) . The Tribunal examined similar set of fact and held that the appellants often, even in the absence of shippers, contract for space or slots in vessels in anticipation of demand and as a distinct business activity. It is a transaction between principal to principal and the freight charges or consideration for space procured from shipping-lines. The surplus earned by the respondent arising out of purchase and sale of space and not by acting for client who has space or not on a vessel. It cannot be considered that the respondents are engaged in promoting or marketing the services of any client . 12. In the present case it was recorded that the respondent was already paying service tax on commission received from airlines/ shipping lines under business auxiliary service since 10.09.2004. The original authority recorded that the show cause notice did not specify as to who is the client to whom the respondent is providing service. Original authority considered both the scenar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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