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M/s Kanpur Cargo Movers Versus Commissioner of Central Excise & Service Tax, Kanpur

2017 (12) TMI 724 - CESTAT ALLAHABAD

Business Auxiliary Services - whether demand of service tax amounting to ₹ 10,22,575/- have been rightly made on the brokerage earned for providing taxable services under the head Business Auxiliary Service for the period October, 2009 to June, 2012 and further July, 2012 to March, 2014? - penalty - Held that: - 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 .....

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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) is not tenable. - Appeal allowed - decided in favor of appellant. - Appeal No. ST/70053/2017-CU [ DB ] - Final Order No. ST/A .....

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June, 2012 and further July, 2012 to March, 2014. The other issue is whether penalties have been rightly imposed under Section 78(1) 70(1), 71(1(d) and 77(2) of the Finance Act, 1994 and further issue is whether show cause notice have been rightly issued as regards the demand of ₹ 1,14,15,678/- which amount had been admittedly deposited by the appellant along with interest prior to the issue of show cause notice. 2. The brief facts as per the show cause notice dated 24/04/2015 are that th .....

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rs 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 disch .....

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tax liability for the period under consideration, description of the period for which payment of service tax amounting to ₹ 41 lakhs related to, etc. The appellant further informed by the letter dated 20th October, 2014 and 11th November, 2014 that they have paid interest of ₹ 5 lakhs vide the GAR challan s, ₹ 12,05,000/- by challan dated 28th October, 2014 and ₹ 2,33,000/- vide challan dated 8th November, 2014 enclosing copies thereof. Appellant also informed that their .....

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lice station. That the bank accounts of the firm reflect regular withdrawals of amount for payment 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 .....

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2014, February, 2015 and March, 2015, and thus they have deposited service tax to the tune of ₹ 41 lakhs (against, the service tax liability of ₹ 40,39,195/- along with amount of ₹ 19,38,000/- on interest account). It is further stated that they have filed ST-3 Returns relevant to the period on 22nd October, 2014. A summary of all the invoices/bills issued by them during the period April, 2009 to March, 2014 was also enclosed. He also stated that they received services of Shipp .....

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rging Ocean Freight, Terminal Handling Charges and Bill of Lading Charges, etc. Subsequently they issued their bills to the customers for recovery of all the charges by the Shipping Lines and Forwarder Companies as well as agency charges of their firm. In the case of import of goods, they issued bills to the customers charging their agency charges and CONCOR/transport charges. Their employee, namely, Shri Farhad Hussain, who was authorized by the firm in the matters related to service tax have f .....

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and loss account and balance sheet for the period under consideration the amount short paid under the head job work account/credit and job work account (Credit/TDS) is total value inclusive of service tax of all the bills issued by them, the amount shown under the head job work account debit is total value inclusive of service tax of all the bills issued by Shipping Lines/Forwarder Companies to the party. The amount shown under that brokerage in the profit and loss account is a share of profit .....

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the Shipping Lines Companies like M/s APL India Private Ltd., M/s Mediterranean Shipping Company, etc. in lieu of payment of ocean freight made by the appellant on behalf of their clients, granted a share from such ocean freight to the appellant, but in lieu of receiving a share of profit from Forwarder Companies in the form of brokerage, they do not provide any service. Payment of ocean freight is made by the exporter directly to these Forwarder Companies. Year wise breakup of such brokerage re .....

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2 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. However, the proposed amount of ₹ 39,37,638/- relating to ocean freight was dropped. Further interest was demanded and the same stood appropriated from the amount of ₹ 1 .....

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4. 6. Being aggrieved the appellant is before this Tribunal. As regards brokerage, the Learned Counsel states that the issue is no longer res Integra and the same is decided in favour of the assessee by Coordinate Bench of this Tribunal in M/s Greenwich Meridian Logistics India Pvt. Ltd. versus CST 2016 (43) S.T.R. 215 (Tri.-Mumbai) wherein it was observed that each source of income must be looked at independently. Service provider is not necessarily specialist in rendering one service. Earnings .....

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he 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 .....

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