Pawan Cargo Forwards Pvt. Ltd. Versus Principal Commissioner of Service Tax, Chennai- I (CGST & CE Chennai North)
Service Tax
2018 (10) TMI 1558 – CESTAT CHENNAI – 2020 (34) G. S. T. L. 559 (Tri. – Chennai)
CESTAT CHENNAI – AT
Dated:- 24-10-2018
Appeal Nos. ST/40931/2016 & ST/40932/2016 – FINAL ORDER No. 42656-42657/2018
Service Tax
Shri Madhu Mohan Damodhar, Member (Technical) And Shri P. Dinesha, Member (Judicial)
Shri G. Sivakumar, Consultant For the Appellant
Shri K. Veerabhadra Reddy, ADC (AR) For the Respondent
ORDER
Per Shri Madhu Mohan Damodhar
The appellants are a air cargo agent and are paying service tax on the commission amount paid from the airlines. Department took the view that appellants should have been paying service tax also on the freight charges reimbursed by them from their customers charged over and above the freight amount payable to the airline companies. Accordingly, SCN No.35/2014 dt. 29.10.2014 proposing service tax liability of
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amount collected from the Customer as the Value of Service and made it taxable in the hands of the Appellant, which is incorrect. In other words, the Department wants to tax the “Margin” but has calculated the Service Tax on the Gross amount collected from the Customer on behalf of the Airlines, which is contrary to the order itself.
(ii) Even assuming but without admitting that the intention of the Department is to tax the entire amount collected from the Customer in the hands of the Appellant – assessee still the demand would fail for the reasons below :
a. The Appellant is merely an agent collecting the freight on behalf of the Airlines and hence, the amount collected cannot be treated as Service Provided by the Appellant-assessee to the Customers.
b. In any case, on the freight amount, Service Tax has already been paid by the Airlines and hence, only again taxing the same in the hands of the Appellant, would amount to Double-taxation, which is incorrect. Reliance is placed on H
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49,34,46,556
(iv) Further, even assuming but without admitting tax is payable the difference amount, in the present case, there is no difference as the amount collected from the Customers and the amount paid to the Airlines is same. The same can be verified from Para 6(e) of the OIO.
(v) Finally, it is a settled law that no Service Tax can be demanded on difference between Amount Freight amount collected from the Customer and paid to the Airlines. Reliance is placed on :-
1.
M/s.Skylift Cargo (P) Ltd. Versus Commissioner of Service Tax, Chennai And (Vice-Versa)
2018 (2) TMI 320 – CESTAT CHENNAI
2.
M/s.La Freight Pvt. Ltd. Versus Commissioner of Service Tax, Chennai
2018 (3) TMI 113 – CESTAT CHENNAI
3. On the other hand, Ld. A.R Shri K. Veerabhadra Reddy, supports the impugned order. He submits that the assessee adopts two type of transaction, one in respect of which they act as intermediary which involves commission on agreed terms and the other booking cargo space from Airl
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se are that assessee M/s. Skylift Cargo (P) Ltd., [hereinafter referred to as assessees] are engaged in providing Cargo Handling Service, Clearing & Forwarding Service, Customs House Agent Service. They are also involved in the activities of booking domestic and international air cargo for various airlines for rendering the said bookings. Department took the view that the assessee were paying service tax under Business Auxiliary Service only on the commission amount without considering the incentive amount. Accordingly, proceedings were initiated against the assessee by way of issue of show-cause notices. These proceedings culminated in confirmation of demands of differential service tax liability of Rs. 19,98,332/- and Rs. 93,11,332/- respectively with interest liability thereon. Penalties, which were upheld by the impugned orders in respect of appeal nos.ST/00026/2008 and ST/20005/2009. Aggrieved, assessees are before this forum.”
We find that the facts of this case are pari materi
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