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9.1 We find that this is a case in which the appellant has taken registration under the Category of Business Auxiliary Services (BAS) ST/42217/2017 and ST/41302/2019 and Business Support Services (BSS), they have not taken a registration under the category of Freight Forwarder until they were issued a SCN by the department. It is the general rule in legal proceedings, that he who asserts must prove. From the above description of the appellant's activities it is seen that there are two independent services rendered, as the appellant is not a pure agent acting on behalf of the shipping lines/ airlines. The first is between the appellant and the shipping line/ airline and the second between the appellant and their customer/ importer/ exporter. To differentiate whether the appellant is providing the service of transporting of goods and negotiating space requirements with the shipping lines / airlines on a principal-to-principal basis, it is necessary for the appellant to demonstrate that they negotiate the booking of space or slots in vessels in advance anticipating demand and that they are also into the transport of goods as distinct business activities. The invoices provided by the appellant and mentioned at para 5 above do not disclose the advance booking of space as a distinct business activity. Further they also agree that transportation of goods is not their distinct business activity and the same is outsourced. Their claim to being transporter of goods rests only on their claim that they act on a principle-to- principle basis while negotiating the booking of space from the Shipping Lines / Airlines. The appellant bills their customers with various charges viz. freight charges, LCL charges, Delivery Order charges, documentation charges, BL fees, Terminal Handling charges etc. which are for services pertaining to Business Support Service. Another important responsibility is undertaking all the legal responsibility for the transportation of the goods along with its ST/42217/2017 and ST/41302/2019 attendant risks, while providing the service of transportation of goods, from a place in India to a place outside India. Generally, transportation of the goods are done based on 'adhesion contracts' otherwise called 'standard-form contracts'. These contracts are prepared by the dominant party i.e. in this case the Freight Forwarder to be signed by the party in a weaker position, usually the customer, who has little choice about the terms. In such agreements which are preprinted on the back of the invoice or otherwise and entered into, the Freight Forwarder assumes legal responsibility for the transportation of the goods, howsoever one sided and in his favour it may be. Even this agreement is missing in the present dispute as stated by the appellant. Hence in the absence of a contract/ agreement, this responsibility can be conveniently avoided by the appellant. In case of any breach of responsibility the customer may find it a legal up-hill task to fix responsibility on the appellant who could shift it on to the shipping lines / airlines. Satisfactory proof of having undertaken such responsibility has also not been produced at any stage of the proceeding. This being so the appellant has not been able to establish their case as a Freight Forwarder based on documentary evidence.

2.1 The freight forwarders may deal with the exporters as an agent of an airline/carrier/ocean liner, as one who merely acts as a sort of booking agent with no responsibility for the actual transportation. It must be noted that in such cases the freight forwarder bears no liability with respect to transportation and any legal proceedings will have to be instituted by the exporters, against the airline/carrier/ocean liner. The freight forwarder merely charges the rate prescribed by the airline/carrier/ocean liner and cannot vary it unless authorized by them. In such cases the freight forwarder may be considered to be an intermediary under rule 2(f) read with rule 9 of POPS since he is merely facilitating the provision of the service of transportation but not providing it on his own account. When the freight forwarder acts as an agent of an air line/carrier/ocean liner, the service of transportation is provided by the air line/carrier/ocean- liner and the freight forwarder is merely an agent and the service of the freight forwarder will be subjected to tax while the service of actual transportation will not be liable for service tax under Rule 10 of POPS.

2.2 The freight forwarders may also act as a principal who is providing the service of transportation of goods, where the destination is outside India. In such cases the freight forwarders are negotiating the terms of freight with the airline/carrier/ocean liner as well as the actual rate with the exporter. The invoice is raised by the freight forwarder on the exporter. In such cases where the freight forwarder is undertaking all the legal responsibility for the transportation of the goods and undertakes all the attendant risks, he is providing the service of transportation of goods, from a place in India to a place outside India. He is bearing all the risks and liability for transportation. In such cases they are not covered under the ST/42217/2017 and ST/41302/2019 category of intermediary, which by definition excludes a person who provides a service on his account.

3.0 It follows therefore that a freight forwarder, when acting as a principal, will not be liable to pay service tax when the destination of the goods is from a place in India to a place outside India.

4.0 Keeping this in mind, field formations may deal with cases purely on the basis of the facts of the case, the terms of contract between the entities concerned, the provisions of the Finance Act, 1994, the POPS Rules 2012 and other rules."

9.3 The appellant bases his whole arguments as per para 2.2 of the above circular. They state that when the Freight Forwarder provides service of transportation of goods to a place outside India then they have acted in the capacity of a principal and Rule 10 of the Place of Provision of Service Rules 2012 would be applicable. We find that these issues relate to questions of fact. Merely billing customers for booking of space does not make one a Freight Forwarder. It is seen from the paras above that the appellant has not demonstrated that he acts in the capacity of a principal while booking space. His argument is that he is not a 'pure agent' as he charges a markup over and above the payment made for booking space with the shipping lines / airlines. They have to pay the shipping lines / airlines for the cargo space booked irrespective of a. Whether the space booked is sold or not b Whether they are sold at a profit or loss c Whether the appellant is able to recover the freight amount from the customer or not Hence, they are Freight Forwarders. It is a known fact in business that intermediaries providing support service try to earn a profit in an oligopolistic market, where business is dominated by few shipping lines/ airlines, the customer has imperfect knowledge about the routes, ST/42217/2017 and ST/41302/2019 booking charges of cargo etc. Traders who look for ease of doing business approach any service provider in the trade who can make arrangements that will help ship his cargo and thereby assist his business activities. Entities who are not pure agents of shipping lines / airlines also provide support service to traders due to profits that can be made. They do so by getting an order from a customer, paying the booking charges offered by shipping lines/ airlines and then charge it on the customer after adding a markup. There are no protracted negotiations with the shipping lines/ airlines since this happens only when bulk space is pre-booked. Bulk booking of space gives leverage for negotiations which does not appear to be the case here as no proof has been shown of the same. Mostly the booking is of containers belonging to the shipping line itself. They also offer a range of business activities to the customer, within the taxable territory, without assuming responsibility for the delivery of the cargo at destination. The chances of making a loss are minimal as payments are taken from customers after ascertaining the availability of space and charges from the shipping lines/ airlines. No such proof of actual loss suffered was tabulated for any period of time and produced before the original authority. As stated by Revenue, such entities cannot be treated as Freight Forwarders, whose distinct business activities does not include space booking in advance and transportation along with responsibility for the cargo, but only to provide service in a market where customers have limited knowledge of market conditions. Having not being able to establish their activities in terms of the requirements of para 4.0 of the circular, it cannot be said that they act as a principal in terms of para ST/42217/2017 and ST/41302/2019 2.2 ibid. An activity built only on the foundation of words and statements is a poor substitute for documented proof. 9.4 We find that the impugned order has examined the activities of the appellant as a Business Support Service. Para 6 and 7 of the impugned order is reproduced below;