Custom, Excise & Service Tax Tribunal
Apl (India) Pvt. Ltd vs Commissioner Of Service Tax on 12 August, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI COURT No. II Appln.No.ST/S/94534/14 APPEAL No.ST/86248/14 (Arising out of Order-in-Original No.99/ST-II/RS/2013 dated 30/12/2013 passed by Commissioner of Service Tax-II, Mumbai) For approval and signature: Honble Mr. P.R. Chandrasekharan, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial) 1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the :Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether Their Lordships wish to see the fair copy :Seen of the Order? 4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================
APL (India) Pvt. Ltd., Appellant Vs. Commissioner of Service Tax, Respondent Mumbai Appearance: Shri.Prasad Paranjape, Advocate for appellant Shri.V.K.Singh, Spl. Consultant, for respondent CORAM: Honble Mr. P.R.Chandrasekharan, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial) Date of Hearing : 12/08/2014 Date of Decision : 12/08/2014 ORDER NO Per: P.R.Chandrasekharan
1. The appeal and stay petition are directed against Order-in-Original No.99/ST-II/RS/2013 dated 30/12/2013 passed by Commissioner of Service Tax-II, Mumbai. Vide the impugned order, the learned adjudicating authority has confirmed a service tax demand of Rs208,26,08,024/- along with interest thereon and also imposing equivalent amount of penalty against the appellant, M/s.APL (India) Pvt. Ltd. The demand is for the period October 2007 to March 2012. Aggrieved of the same, the appellant is before us.
2. The learned Counsel for the appellant, M/s.APL (India) Pvt. Ltd. submits as follows:
2.1 The appellant is registered as a steamer agent with the Service Tax department and they are paying service tax liability on the consideration received by them as steamer agent on behalf of the shipping lines. The appellant collects various charges such as, ocean freight, currency adjustment charges, bunkering charges and advance manifest charges and remits to these amounts to the shipping lines situated abroad. All these charges form part of the customs value of the goods imported or exported. The present demand is towards service tax liability on all these charges which in fact form part of the customs value. The learned Counsel also submits that all these amounts collected and remitted to the shipping lines are not consideration received for rendering of any service. On the consideration received for services of a steamer agent they have discharged service tax liability and therefore, the question of subjecting the entire amount collected, received and transmitted cannot form the part of the consideration received for levy of service tax. He further submits that an identical matter came up for consideration before the Chennai Bench of this Tribunal and the said Tribunal vide Final Order No.40437/2014 dated 23/06/2014 took the view that service tax is not leviable on ocean freight and the matter was remanded back to the adjudicating authority for fresh consideration. Following the same, in the present case also the demands are not sustainable. Therefore, stay be granted and the appeal disposed of.
3. The learned Special Consultant appearing for the Revenue on the other hand submits that the appellants were asked to furnish details of the actual amount of freight collected and remitted and in spite of repeated reminders, they did not furnish the requisite information and therefore, the adjudicating authority was constrained to confirm the service tax on the entire amount which they had collected from the various importers/exporters. Had the appellant furnished the requisite information, then the department would not have been forced to pass the impugned order. Therefore, it is his submission that the appellant be directed to furnish all the information sought by the Revenue showing the details of freight collected and remitted and other relevant particulars so that the department can examine the issue in proper prospective.
4. We have carefully considered the submissions made by both the sides.
4.1 As the issue lies in a narrow compass, we are of the view that the appeal itself can be disposed of at this stage and therefore, after waiving the requirement of any pre-deposit and with the consent of both the sides, we take up the appeal for consideration and disposal.
4.2 The short question for consideration is whether the ocean freight, currency adjustment charges, bunkering charges, advance manifest charges collected by the appellant on behalf of the shipping lines can be subjected to levy of service tax. It is undisputed that most of these charges form part of the transaction value in respect of customs matters and therefore, the question of levy of service tax on a customs transaction would not arise at all. If the appellants have collected these charges and remitted the same to the shipping lines, the whole amount received and transmitted cannot be said to be a consideration for the services rendered. What can be levied to service tax is the service rendered by the appellant either as a steamer agent or BAS in respect of collection of freight and other charges and only on the consideration received for the services rendered, service tax can be levied. In this view of the matter, the impugned order is clearly not sustainable in law and the matter has to go back to the adjudicating authority for denovo consideration. The appellant is also directed to co-operate with the department and submit all the requisite particulars, such as, the amount of ocean freight and other charges collected by them and the amount transmitted by them to the foreign shipping lines and the amount of consideration received/retained by them in respect of the services rendered and whether service tax liability has been discharged on the consideration received by them for rendering of the services. On submission of such information, the adjudicating authority shall examine the matter afresh and pass a speaking order after giving due opportunity of hearing to the appellant. Thus, the appeal is allowed by way of remand. Stay petition is also disposed of.
(Dictated in Court) (Ramesh Nair) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) pj 1 5