TMI Blog2024 (1) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... booking the cargo space or for canvassing or booking of the cargo space for their customers. They purchase the cargo space on behalf of the customers from the shipping lines on principal-to-principal basis. The excess ocean freight collected from the customers, thus cannot be considered as a commission paid by the shipping lines to the appellant. Whether Service Tax be leviable on the excess ocean freight collected from the customers is the issue now needs to be addressed. This issue of chargeability of Service Tax on excess ocean freight retained by the service provider is no more res integra and considered by the Tribunal in a series of cases. Recently, the Principal Bench in M/S. BALMER LAWRIE CO. LTD. VERSUS THE COMMISSIONER OF SE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Steamer Agent Services . Show-cause notices were issued to the appellant on 21.09.2011 for the period 2006-07 to 2010-2011 for recovery of service tax of Rs.5,55,19,765/- with interest and penalty. Also show-cause notice dated 05.11.2012 was issued for the subsequent period from April 2011 to March 2012 on 05.11.2012 demanding service tax of Rs.1,30,36,131/- with interest and penalty. Both the show-cause notices have been adjudicated by a common order confirming the demands with interest; also penalty of Rs.5,000/- under Section 77 and equivalent amount of penalty imposed under Section 78 of the Finance Act, 1994. Hence, the present appeals. 3. At the outset, the learned advocate for the appellant has submitted that the appellants a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght nor collected it from the customers as it is not leviable to Service Tax. The department proposed to levy Service Tax on the difference between the ocean freight collected from customers and ocean freight paid to shipping lines under the taxable category of Steamer Agent Services as defined under Section 65(100) of the Finance Act, 1994. He has submitted that since the appellants are registered as MTO and authorised to engage with shipping lines on principal-to-principal basis, the demand and penalty imposed is legally unsustainable as the same is based on mis-interpretation of definition of Steamer Agent Services and improper understanding of the services rendered by the appellant. They do not act on behalf of any shipping lines ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 in support of his claim that excess ocean freight collected cannot be subjected to service tax. 5. Learned Authorised Representative for the Revenue reiterated the findings of the learned Commissioner. 6. Heard both sides and perused the records. The short issue involved in the present appeals is whether the appellants are liable to pay Service Tax for the excess ocean freight collected and retained by them for transportation of the goods to foreign destinations under the taxable category of Steamer Agent Service . Undisputedly, the appellants are registered with the Service Tax department under the category of Clearing and Forwarding Agency Service and Business Auxiliary Service during the relevant period. As per the customers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... related thereto as well as the booking, advertising or canvassing of cargo, including container feeder services . 6.2 The learned adjudicating authority after analysing the definition of Steamer Agent Service held that the differential amount collected as freight charges i.e., paid to shipping lines and the amount collected from the customers be considered as chargeable to Service Tax under subclause (ii) of Section 65(100) of definition of Steamer Agent Service i.e., to book, advertise or canvas for cargo for or on behalf of shipping line and accordingly taxable under the category of Steamer Agent Service . On the other hand, the learned advocate for the appellant has vehemently argued that there is no contract between the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and considered by the Tribunal in a series of cases. Recently, the Principal Bench in Balmer and Lawrie and Company Ltd. case referring to the judgments by the Tribunal held as follows: 6. The primary issue for decision is the issue on taxability of service tax on ocean freight and the liability of tax on profit/mark up, which is no more res integra as the same has been decided in catena of decisions, the latest being the judgment in the case of M/s Tiger Logistics (India) Ltd. vs Commissioner of Service Tax-II, Delhi. The relevant paragraphs of the aforesaid judgment is reproduced hereinafter : 9. As far as the differential in ocean freight is concerned, the appellant buys space on ships from the Shipping Line and the Shipping ..... X X X X Extracts X X X X X X X X Extracts X X X X
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