TMI Blog2022 (6) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... a vessel. Section 65(19) ibid will not address these independent principal-to-principal transactions of the appellant and, with the space so purchased being allocable only by the appellant, the shipping line fails in description as client whose services are promoted or marketed. Therefore, the demands, with interest thereon, and penalties are set aside - Following the same, there are no hesitation to hold that the demand of Service Tax on ocean freight charges cannot sustain and requires to be set aside. Demand of Service Tax - benefit of exemption as per Notification No. 04/2004 dated 31.03.2004 denied on the ground that the input services / approved services have not been consumed within the SEZ unit itself - HELD THAT:- The very same issue was considered by the Tribunal in the case of M/S. VISION PRO EVENT MANAGEMENT VERSUS CCE ST, CHENNAI [ 2018 (7) TMI 334 - CESTAT CHENNAI ] where it was held that Even if the event is held outside, since the services were for advertisement of product of SEZ, the services provided is to be considered as consumed within SEZ. It also needs to be mentioned that for availing the services, the SEZ has to get these services approved by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant alleging that the appellant has provided Business Support Services for the period from May 2006 to March 2009. Further, demand of Service Tax of Rs.53,93,244/- has ben confirmed alleging that the appellant has wrongly availed the benefit of Notification No. 04/2004 dated 31.03.2004 for the period from April 2006 to March 2009. 5.2 He submitted that in Service Tax Appeal No. 158 of 2012, the demand has been confirmed only on ocean freight charges collected by the appellant alleging that these fall under Business Support Services. 5.3.1 Learned Counsel for the appellant submitted that the issue as to whether ocean freight charges collected are subject to levy of Service Tax is no longer res integra. As per Section 67 of the Finance Act, 1994, the value of taxable service shall be the gross amount for providing such service. That ocean freight is not a charge incurred by the appellant in the course of providing freight forwarding service. He submitted that the appellant makes payment to the shipping liners for transportation of cargo of its clients and recovers the same from its clients; hence, ocean freight does not form part of the value of taxable service ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incipal Commissioner of Service Tax, Chennai South reported in 2021 (8) TMI 450 CESTAT, Chennai 5.4 He prayed that the appeals may be allowed. 6. Smt. K. Komathi, Learned Authorized Representative for the respondent, supported the findings in the impugned order. 7. Heard both sides. 8.1 The first issue is whether the charges collected by the appellant from its customers in the nature of ocean freight are subject to levy of Service Tax under Business Support Services. 8.2 This issue has been considered in various decisions of the Tribunal wherein the Tribunal has held that ocean freight charges are not subject to levy of Service Tax under Business Support Services or Business Auxiliary Services. The relevant discussion in the case of M/s. Greenwich Meridian Logistics (I) Pvt. Ltd. (supra) is reproduced as under: 10. The original authority has proceeded on the assumption that there is only one payment and, that too, for freight charged by the shipping line. He has rejected the possibility of trading in space or slots on vessels by holding that trading in space or slots is a figment and freight is all that is transacted. This is a patent misconstruing of the usag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scope of agency function. Ergo, it is nothing but a principal-to-principal transaction and the freight charges are consideration for space procured from shipping line. Correspondingly, allotment of procured space to shippers at negotiated rates within the total consideration in a multi-modal transportation contract with a consignor is another distinct principal-to-principal transaction. We, therefore, find that freight is paid to the shipping line and freight is collected from client-shippers in two independent transactions. 13. 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. Section 65(19) of Finance Act, 1994 will not address these independent principal-to-principal transactions of the appellant and, with the space so purchased being allocable only by the appellant, the shipping line fails in description as client whose services are promoted or marketed. 14. We, therefore, find no justification for sustaining of the demand and, accordingly, set aside the impugned order. Demands, with interest thereon, and penalties in both orders are set aside. Cross-objections filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods and services provided to SEZ unit/developer, the supply of goods and services to SEZ being deemed exports. Therefore, taking into consideration the impact of Section 51 of the SEZ Act which provides for overriding effect over any other law, we are of the considered opinion that the benefit of tax exemption cannot be denied by giving a restrictive interpretation to Notification No. 4/2004. Our view is supported by the fact that the notification which superseded Notification No. 4/2004 has categorically stated that whether or not the taxable services are provided inside the SEZ the exemption is available. The relevant portion of the Notification No. 9/2009 is reproduced as under :- In exercise of the powers conferred by sub-section (1) of Section 93 of the Finance Act, 1994 (32 of 1994), and in supersession of the notification of the Govt. of India, Ministry of Finance (Department of Revenue), No. 4/2004-ST, dated 31-3-2004, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) dated the 31-3-2004, vide G.S.R 248 (E), dated 31-3-2004, except as respects things done or omitted to be done before such supersession, the Central Govt., on being s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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