TMI Blog2019 (2) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... ith regard to the rates of the cargo slots which can be sold by the appellant. For slots, for which there is specific rate arrangement between the parties, the appellant is not entitled to any commission. Thus, the appellant purchases the cargo slots and thereafter sells the same to customer / exporters. The difference between sale price and the purchase price of the cargo slot is sought to be brought within the ambit of commission by the department. In such transaction, it is specifically stated in clause 9 that the appellant is not entitled to commission. In fact, for transactions as a General Sales Agent, the appellant is entitled to commission as per IATA regulations. In other transaction of sale of cargo space of specific agreed rates, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sian Airlines. It appeared that they are liable to pay service tax under Business Auxiliary Services (BAS) on the entire income earned by them for providing the services. On verification, it was noticed that the appellant had not discharged appropriate service tax on their income. Show cause notice was issued proposing to demand service tax along with interest and also for imposing penalties. After due process of law, the original authority confirmed the demand of ₹ 1,50,89,993/- for the period from October 2009 to September 2011 along with interest and also imposed penalty under section 76 of Finance Act, 1994. Aggrieved, the appellants are now before this Tribunal. 2. Ld. counsel Shri V.S. Manoj appeared and argued the matter on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase when the appellant is acting as a General Sales Agent, the master airway bill will be raised by Malaysian Airlines. When the appellant purchases and sells the cargo slots as an independent buyer, the house airway bill would be issued by the appellant and the appellant will be liable to make the payment for cargo slot to the Malaysian Airlines irrespective of the fact whether the customer pays for the slot. Thus the appellant is just making profit out of the sale of the cargo slot and is not receiving any commission. The appellant therefore is not liable to pay service tax on this amount received as a profit from sale of cargo space. While engaged in such sale of cargo space, the appellant is acting as an independent buyer of the slot fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etails of the duties of general sales agent. Sub-clause (vii) of clause 5 states that the appellant is to issue airway bills in accordance with the agreement in connection with the sales made on behalf of Malaysian Airlines. Thus, the airway bills, if any, issued are on behalf of Malaysian Airlines and therefore the appellant in all transactions is doing the activity of general sales agent. Therefore, the transaction falls within the definition of BAS. In clause 9, it is stated that in case where Malaysian Airlines and the appellant have prior specific rate arrangements, the appellant who is a general sales agent is not entitled to any commission. It is clear from the above clauses that the appellant is rendering services as air cargo agent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the services of MAS in accordance to IATA Resolutions 801 and 801a(II). However, where MAS and the General Sales Agent have a prior specific rates arrangement relating to the transportation of any consignment on any particular route, the General Sales Agent is not entitled to any commission. 6. As per clause 9, it is seen that the Malaysian Airlines and the appellant has some arrangement with regard to the rates of the cargo slots which can be sold by the appellant. For slots, for which there is specific rate arrangement between the parties, the appellant is not entitled to any commission. Thus, the appellant purchases the cargo slots and thereafter sells the same to customer / exporters. The difference between sale price and the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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