Vasa Seshagiri Rao DECISION
Sulekha Beevi C.S., Member (J)
1. Brief facts are that the appellant is engaged in providing Custom House Agent Services, Steamer Agent Services and Business Support Services and have registered with the Service Tax Commissionerate. The appellant collected excess amount from their customers over and above the actual ocean freight paid to the shipping lines. They did not discharge Service Tax on the excess amount collected from the clients. The Department was of the view that the said amount is liable to Service Tax. The Show Cause Notice dated 25.02.2013 was issued to the appellant proposing to demand Service Tax on excess amount collected to the tune of Rs.85,035/-. After due process of law, the Original Authority confirmed the demand of Rs.85,035/- on excess ocean freight collected by the appellant during the period from April 2012 to September 2012 along with interest and imposed penalty under Section 76 and 77 of the Finance Act, 1994. Aggrieved by such order, the appellant filed appeal before the Commissioner (Appeals) who upheld the same. Hence this appeal.
2.1. The Ld. Finance Manager of the appellant company Shri V. Kumar appeared and argued on behalf of the appellant. It is submitted that for the earlier period 2006-2010, on the very same allegation, the Department had issued Show Cause Notice in September 2012. After confirmation of demand by the Original Authority, the appellant had preferred an appeal before the Commissioner (Appeals) and vide Order-in-Appeal No. 490/2012 dated 27.08.2013, the Commissioner (Appeals) had set aside the demand. Against the order passed by the Commissioner (Appeals), the Department had filed appeal before the Tribunal vide appeal No. ST/42560/2013. The appeal filed by the Department was dismissed on monetary limits.
2.2. It is submitted that the Department has issued the present Show Cause Notice on the very same allegations. It is argued by the Ld. Representative for the appellant firm that the freight charges cannot be subject to levy of Service Tax as the said amount has been already included in the CIF value of the goods. Further, the Commissioner (Appeals) vide Order dated 27.12.2013 had considered the issue in detail and held that the confirmation of demand is by misconception of law by the Adjudicating Authority. In Paragraph 13, it was observed that the ocean freight is not liable to Service Tax and there are various decisions of higher fora wherein it has been held that ocean freight cannot be subject to levy of Service Tax. The Ld. Representative for the appellant prayed that the appeal may be allowed.
3. The Ld. Authorised Representative Shri N. Satyanarayanan appeared for the Department. The findings in the impugned order were reiterated.
4. Heard both sides.
5. The issue to be considered is whether the appellant is liable to pay Service Tax on excess amount collected towards the ocean freight.
6.1. On perusal of the Show Cause Notice as well as the order passed by the Original Authority, we are not able to find as to the category under which the Service Tax demand has been confirmed. In the Show Cause Notice, although it is alleged that the appellant has collected excess amount towards ocean freight, it is not stated in the Show Cause Notice whether such amount would fall under the category of Steamer Agent Services, Business Support Services, Custom House Agent Service or Business Auxiliary Services. The Adjudicating Authority has considered in Paragraphs 10.4 and 10.5 that the amount collected during the course of providing the Steamer Agent Service is subject to levy of Service Tax. However, he has not stated under which category and how this amount is an excess amount collected as freight would be consideration and the appellant has paid the Service Tax on the commission received as Steamer Agent. The amount collected is some excess of ocean freight as they were not able to qu........