Flyjac Logistics Versus Commissioner of GST And C. Ex, Chennai South Commissionerate
Service Tax
2018 (3) TMI 631 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 30-1-2018
ST/72/2008 – A/40241/2018
Service Tax
Ms. Sulekha Beevi C.S. Member (Judicial) And Shri B. Ravichandran, Member (Technical)
Ms. Radhika Chandrasekar, Advocate – For the Appellant
Shri A. Cletus, ADC (AR) – For the Respondent
ORDER
Per: B. Ravichandran
The appellant is aggrieved by the order dt. 31.12.2007 of Commissioner of Service Tax, Chennai.
2. By the impugned order, the original authority confirmed service tax liabilities on the appellant with reference to Cargo Handling Service, Business Auxiliary Service and Goods Transport Agent Services for the period 16.08.2002 to 31.03.2006. Further, certain cenvat credit availed by the appellant on input services were also ordered to be reversed. Penalties under Section 76 & 78 of the Finance Act, 1994 were also imposed on the appellant.
3.1
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ight. “Currency adjustment factor” is a fee collected as a percentage of ocean freight to meet the fluctuation in foreign exchange; “Delivery order fee” is collected from the client to issue delivery order; “Courier charges are” for cost incurred in couriering the documents connected to the shipment; Break bulk fee is for desegregation of cargo. This amount is collected by the liners and charged to the importers; “Freight income” is towards the freight paid by the counterpart in originating country which is collected to the importer with a margin. This margin is shared between logistic company outside India and the appellant; “Transportation charges” again incurred by the counterpart in foreign country for bringing the cargo to the port of export which is collected from the client in India.
3.2 The Ld. counsel submitted that none of these charges are with reference to the physical handling of any of the cargo. They are not cargo handling agents and their core area of work is consolida
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when the matter was pointed out by the officers. Accordingly, praying for invoking provisions of Section 80, Id. Counsel pleaded for setting aside the penalties.
4. The Ld. A.R supports the findings of the lower authorities. He submitted that the appellants are involved in a range of activities which will fall in the overall ambit of “Cargo Handling Service”. The services provided by the appellants are mainly with reference to import cargo and some of the aspects of their activity will specifically fall under such tax entry, though the appellants are engaged in end-to-end operation in clearing the cargo and delivering the same. Regarding non-contest issues, the Id. A.R submitted that the amount was paid only after being pointed out by the officers. Accordingly, the penal consequences will follow. It is also submitted that in respect of reversal of credit, there is no evidence of payment of interest for delayed reversal.
5. We have heard both sides and perused the appeal records.
6.
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l handling of cargo by the appellant. We find that there is no evidence to identify the appellant's activities as “Cargo Handling Agent”. Accordingly, the service tax liability on this account will not survive.
7. Regarding tax liability under BAS for incentives received from liners, we note that the matter stands settled by the Tribunal decision in the case of Bax Global India Ltd Vs CST Chennai vide Final order No.42113/2017 dt. 18.092017. Following the said ratio, we hold that service tax liability of the appellant on this issue cannot sustain.
8. Regarding admitted and paid liabilities on GTA service and ineligible cenvat credit, we note that the amounts have been paid before issue of show cause notice. The fact of payment of interest on delayed reversal of credit needs to be verified by the authorities below. Wherever applicable such interests are to be paid by the appellant which the counsel fairly concedes. She submitted that on factual verification of non-payment of inter
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