Service Tax
TRT-2025-
Cestat New Delhi
Date:-01-05-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 01 May 2023
Parties: M/s. Balmer Lawrie & Co. Ltd. Vs The Commissioner of Service Tax
Facts –
- The Appellant, M/s. Balmer Lawrie & Co. Ltd. entered into a contract with Indian customers for transporting and delivering the cargo at the desired destination within India. The responsibility of the appellants pertaining to import includes collection of consignments from the foreign line and ensuring delivery of the same to the importer located in India.
- A show cause notice dated 11.04.2014 was issued for the period 01.10.2008 to 31.03.2013 alleging that the appellant divided the bills into four parts, namely, freight, other charges origin, other charges, destination, and service tax. The appellant paid service tax only on the other charges destination. However, no service tax was paid on freight and other charges origin.
- Service tax on the same was partly confirmed. Being aggrieved both the appellant and the department filed an appeal.
Issue –
- Whether service tax is payable on ocean freight and other charges?
Order –
- The Tribunal observed that 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 the case of M/s Tiger Logistics (India) Ltd. vs Commissioner of Service Tax-II, Delhi.
- It was held that “This activity is a business in itself on account of the appellant and cannot be called a service at all. Neither can the profit earned from such business be termed consideration for service. Respectfully following Satkar Logistics, Nilja Shipping Pvt. Ltd., Surya Shipping and ITC Freight Services, we hold that the appellant is not liable to pay service tax.”
- Further in the case of M/s Greenwich Meridian Logistics (India) Pvt Ltd., vs Commissioner of Service Tax, Mumbai it was held that 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.
- Hence the appeal filed by the department is dismissed and appeal filed by the appellant is allowed.
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