Custom, Excise & Service Tax Tribunal
Tvs Dynamic Global Freight Services Ltd vs Cst Ch - Ii on 4 March, 2020
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL, CHENNAI
REGIONAL BENCH - COURT NO. - DB-3
Service Tax Appeal Nos. 42355 to 42358/2015 &
Service Tax Appeal Nos. 42034 to 42036/2018
(Arising out of Order-in-Appeal Nos. 235 & 236/2015 dated
26.08.2015 passed by the Commissioner of Service Tax (Appeals-II)
Chennai and OIA Nos. 240 - 244/2018 dated 17.05.2018 passed by
the Commissioner of GST & Central Excise (Appeals-I), Chennai).
M/s. TVS Dynamic Global Freight
Services Ltd. Appellant
Vs.
Commissioner of GST & CE (Appeals-II) Respondent
No. 26/1, Mahatma Gandhi Road, Nungambakkam, Chennai-600 034.
APPEARANCE:
Shri. M.N. Bharathi, Advocate, for the Appellant Ms. Sridevi T, JC (AR) Shri Arul C. Durairaj, Supdt., for the Respondent CORAM Hon'ble Ms. Sulekha Beevi C.S., Member (Judicial) Hon'ble Shri Anil Shakkarwar, Member (Technical) Final Order No. 40684-40690/2020 Date of Hearing: 04.03.2020 Date of Decision: 04.03.2020 Per Sulekha Beevi Brief facts are that the appellants are providing Cargo Handling Service and Business Auxiliary Service. It was noticed by the department that appellants were reimbursed by 2 their clients the expenses incurred by them on EDI charges, Stamp paper charges, Miscellaneous charges, Crane charges, CFS storage charges, Liner Detention Charges etc., while providing the Cargo Handling Service. The department was of the view that the appellants have to include these reimbursable expenses in the total taxable value for payment of service tax under Cargo Handling Services. They were also rendering Freight Forwarding Service by which they procure cargo space from Airline/Shipping lines, and collected higher amounts for this cargo space from their clients. The department was of the view that the markup so collected on Ocean freight/Air freight is leviable to service tax under Business Auxiliary Service. A Show Cause Notice was issued proposing to demand differential service tax on the reimbursable expenses and the mark up value on Ocean freight/Air freight for the period from September 2007 to March 2011. The Original Authority confirmed the demand, interest and imposed penalties. These findings were upheld by the Commissioner (Appeals). The appellant has filed appeal Nos. ST/42355 to 42358/2015, aggrieved by demand on both these issues.
Appeal Nos. ST/42034 to 42036/2018 is filed against the order confirming the demand in respect of Ocean freight charges only for the period April 2011 to June 2012.
2. When the appeals came up for hearing, Ld. Counsel, Shri M.N. Bharathi submitted that the issue whether 3 reimbursable expenses are subject to levy of service tax has been decided by the Hon'ble Apex Court in the case of UOI Vs. Intercontinental Consultants and Technocrats Pvt. Ltd. - 2018 (10) GSTL.401 (S.C.). The second issue involved in these appeals is with regard to markup collected in regard to cargo space in airlines/shipping line. The said issue is also settled by the Tribunal in the case of M/s. Leaap International Pvt. Ltd. Vs. Commissioner of Service Tax, Chennai - 2018-TIOL-2147- CESTAT-MAD and Phoenix International Freight Services Pvt. Ltd. Vs. C.S.T, Mumbai - 2017 (47) STR 129 (Tri.-Mum.).
3. The Learned Departmental Representatives Ms. T. Sridevi, JC and Shri Arul C. Durairaj, Supdt., appeared for the Revenue and supported the findings in the impugned orders.
4. Heard both sides.
5.1 The first issue involved is with regard to demand of service tax on reimbursable expenses. The issue is settled by the Hon'ble Apex Court in the decision of Intercontinental Consultants and Technocrats Pvt. Ltd. (supra). Following the same we hold that the demand cannot sustain and requires to be set aside, which we hereby do.
5.2 The second issue is with regard to the amounts collected by the appellant in regard to cargo space provided to their clients. The said activity is nothing but purchase and sale of cargo space and does not amount providing service. The issue is settled in the decisions relied on by the Ld. Counsel. 4 Following the same we hold that the demand under Business Auxiliary Service on such markup value collected in regard to cargo space in airlines/shipping line cannot sustain. The demand in this regard is set aside.
6. From the above discussions both issues are found in favour of appellant and against Revenue. The impugned orders are set aside. Appeals are allowed with consequential reliefs, if any, as per law.
(Operative part of the order pronounced in open court on 04.03.2020) (SULEKHA BEEVI C.S.) Member (Judicial) (ANIL G. SHAKKARWAR) Member (Technical) BB