TMI Blog2018 (8) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... dered the very same issue and the applicability of both the Circulars. The issue was then held in favour of the assessee - the demand raised in respect of co-loader cannot sustain. Demand of service tax - reverse charge mechanism - Commission paid to foreign agent who delivered the couriers/packets booked by appellant to the foreign customers - Held that:- The said issue is squarely covered by the decision in the case of First Flight Couriers Ltd. [2016 (8) TMI 145 - CESTAT MUMBAI], where it is held by the Tribunal that the role of the overseas entity commences and ends beyond the border of India and therefore, Rule 3 of Taxation of Service Rules has no application - demand do not sustain. Impugned order cannot sustain and requires to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- under Section 78 of the Finance Act, 1994 with an option to pay reduced penalty. Aggrieved, the appellants are now before the Tribunal. 2.1 On behalf of the appellant, the Ld. Counsel Shri. T. Ramesh, submitted that the first issue is with regard to the demand of service tax as a co-courier (co-loader). The period involved is from 01.05.2006 to 22.08.2007 and the demand is made under Business Support Service (BSS). During the said period, there was a Board Circular No. 138/96 dt. 27.11.1996 which clearly clarified that no service tax is payable by co-loader. The said Circular was later amended by another Circular No. 96/7/2007 dt. 23.08.2007 wherein the Department had clarified that the sub-contractor is also liable to pay service t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries out the delivery to the person abroad. Thus, the delivery of packages booked by customers in India is made by their counterparts overseas and the same cannot be considered as receipt of services by the appellants. 2.5 He argued that a similar issue was decided by the Tribunal in the case of First Flight Couriers Ltd. Vs. C.S.T., Mumbai-II 2016 (44) S.T.R. 474 (Tri. Mum.) wherein it was held that the said activity cannot be taxed under reverse charge mechanism invoking Section 66A of the Finance Act, 1994. 3.1 The Ld. AR, Shri. B. Balamurugan, supported the findings in the impugned order. He argued that the Circular dt. 01.11.1996 was withdrawn and a clarification which was issued vide Circular dt. 23.08.2007 wherein it was ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r agency for such services. A question has been raised whether under these circumstances the co-loaders are also liable to pay service tax. 16. In this context, it is clarified that co-loaders provide service to the courier agencies as such. They do not provide directly any service to the customer who gives the documents, goods or articles to the courier agency for their delivery to the consignee. What is chargeable to service tax is the service provided by courier agency to the customer. In this case, the courier agency being not a customer as such, the service provided by co-loader to the courier agency is not chargeable to service tax. It is significant to point out that the charges of the co-loaders to the courier agency for in-tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, to become taxable, requires that at least some portion of that be rendered in India. The role of the overseas entities commences upon the landing of the packages at the airport of destination. From there, the overseas correspondents ensure delivery of such packages to the consignees. It is therefore, amply clear that the role of the overseas entity commences and ends beyond the border of India. It therefore, cannot be said to be in conformity with Rule 3 of the Taxation of Service (Provided from Outside India and Received in India) Rules, 2006. 5.4 It is held by the Tribunal that the role of the overseas entity commences and ends beyond the border of India and therefore, Rule 3 of Taxation of Service Rules has no application. Follo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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