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2017 (12) TMI 724

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..... t the assessee had ocean freight surplus and it was explained that these profits are arising from purchase and sale of space or slots for ocean transport of container and the same was proposed to be taxed under BAS, this Tribunal held, the notional surplus earned thereby arises from purchase and sale of space and not by acting for a client who has space or slot on a vessel. The appellant - assessee have taken adequate measures for meeting the service tax liability, being the facts on record that there was defalcation of the amounts by its staff, drawn towards payment of service tax is not disputed and further appellant have on discovering the defalcation by its employee, deposited the tax forthwith with interest - the penalty u/s 78(1) .....

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..... of taxable services rendered by them, viz a viz details of tax paid relevant to the Financial Years 2009 10 to 2013 14. In response appellant by their letters furnished duplicate copy of their ST-2 certificate dated 25th October, 2014 and copies of the balance sheets for the years 2009 10 to 2013 14. But no details with respect to discharging of service tax liability by the appellant were furnished. Thereafter summons were issued with direction to produce copies of ST-3 returns filed by them for the Financial Years 2009 10 to 2013 14. In response Shri Manoj Chaturvedi proprietor appeared on 15th October, 2014 and informed that they have fully discharged the service tax liability of ₹ 41 lakhs (approx) and furnished copies of GAR chal .....

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..... yment of service tax, that the corresponding entries in the books of accounts of the firm, evidence payment of service tax. That only after 07 - 08 months they could know that the concerned employee of the firm did not deposit service tax and also have not filed the returns and have forged the books of account/records. Only in January, 2014, when they could know about the mischief they started payment of service tax through cheques. Further, they have availed Cenvat credit while discharging service tax liabilities and also paid interest for the delay in discharging of the service tax liability and also enclosed the details of payment of tax and interest. In further response to summons etc. the proprietor Manoj Chaturvedi, reiterated the fac .....

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..... harges and CONCOR/transport charges. Their employee, namely, Shri Farhad Hussain, who was authorized by the firm in the matters related to service tax have forged the records relating to cash payment of service tax and also did not file the ST-3 returns during the period October, 2009 to March, 2014. They had been discharging the service tax liability since the month of December, 2013 through cheques. Accordingly, they paid service tax by Challans amounting to ₹ 41 lakhs along with further amount of ₹ 19,30,000/- towards interest liability, for delayed payment. 3. It is further alleged in the show cause notice that from perusal of profit and loss account and balance sheet for the period under consideration the amount short pa .....

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..... e tax admitted and paid, II. Service tax on the ocean freight, III. Service tax on the brokerage earned from the Shipping Lines/freight forwarders. 5. The SCN was adjudicated on contest vide the impugned Order-in-Original dated 25/10/2016 wherein the demand of ₹ 1,14,15,678/- was confirmed under the head providing of cargo handling service for the period October, 2009 to June, 2012 and further from July, 2012 to March, 2014. Cenvat credit availed ₹ 75,25,999/- was allowed and further the amount already deposited/paid ₹ 1,17,11,011/- was ordered to be appropriated. Further tax of ₹ 10,22,575/- was confirmed after allowing cum tax benefit on the brokerage earned from the Shipping Lines/Freight Forwarder .....

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..... to the taxable activity. Nomenclature in accounts is not material to classification of service event, taxable entry specifies legislative intent. The description of taxable service in the Act as well as in any of the terms therein are primary determinant for taxation of any service. Under similar facts and circumstances, wherein the course of audit it was seen that the assessee had ocean freight surplus and it was explained that these profits are arising from purchase and sale of space or slots for ocean transport of container and the same was proposed to be taxed under BAS, this Tribunal held, the notional surplus earned thereby arises from purchase and sale of space and not by acting for a client who has space or slot on a vessel. Sectio .....

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