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M/s. Indo Lloyd Freight Systems Pvt. Ltd. Versus Commissioner of Service Tax, Chennai

2017 (8) TMI 400 - CESTAT CHENNAI

Commission - Steamer agent service - it is the case of appellant that they are exclusively appointed by the shipping liner for the services to be rendered and is also paid commission - Held that: - It is seen that the activity of the appellant as a custom house agent is to provide services to importers/exporters and the disputed activity was only a facility arranged by them to their clients. The appellant has no obligation to arrange transport of cargo through a particular shipping liner. Theref .....

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with the department. On the basis of intelligence that they were collecting charges from various shipping liners @ 2% of the basic ocean freight, in the name of brokerage, and is not discharging service tax on such amount received. The officers of preventive unit visited the premises and recovered documents and recorded statements. Pursuant to this, a show cause notice was issued for the period 1999 2000 to 2003 2004 under the category of Steamer Agent Service demanding service tax to the tune .....

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, the appellants are now before this Tribunal. 2. On behalf of the appellant, learned counsel Shri V.S. Manoj explained the activity carried out by the appellant on which the department has now sought to demand service tax under the category of 'Steamer Agent Service'. He submitted that appellant is a custom house agent and is discharging service tax under this category. Using their relations with the customer, they also book space for cargo with shipping lines for which they are paid on .....

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commission since the appellant does not communicate with the shipping liner as a steamer agent. He submitted that steamer agent is exclusively appointed by the shipping liner for the services to be rendered and is also paid commission. The learned counsel relied upon the Board Circular dated 25.4.2003 which clarified that the secondary service providers are not taxable. He relied upon the following judgments:- (a) Lee & Muir Head Pvt. Ltd. Vs. Commissioner of Service Tax, Bangalore - 2009 ( .....

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nson Air Services Vs. Commissioner of Central Excise, Chennai-II - Final Order No.53632/2016 dated 16.9.2016 3. Learned AR Shri A. Cletus reiterated the findings in the revision order. He explained that there are merchant vessels as well as bulk cargo vessels. In the case of bulk cargo vessels, they require customers for filing up the space. In case of small exporters, the shipping liners would not be able to arrange or contact with such exporters and the shipping liners arrange various agents i .....

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iciently discussed in the case of Lee & Muir Head Pvt. Ltd. (supra) wherein the Tribunal in a similar situation as observed as under:- 8.4 As regards brokerage commission of 2% paid for booking of the export cargo, it is seen that the agents of shipping lines normally book the export cargo. The appellants actually get brokerage or commission for getting orders for the export of cargo. For this, they are getting commission of 1.75% to 2%. Even if this activity is considered as Business Auxili .....

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