Case Law Details
RELEVANT PARAGRAPH
6. We have gone through the records of the case carefully. The appellants had furnished a flow chart indicating the activities undertaken by them. It is seen that the activities in Sl. No. 1 to 6 related to activity of the appellants as freight forwarding. This has been clearly explained by the appellant in the submissions. The point urged was that the appellants are engaged in three distinct activities:-
(i) Freight forwarding
(ii) Customs House Agent (CHA)
(iii) Clearing & Forwarding Agent (CFA)
We are of the considered opinion that the activity relating to one of the categories could not be subjected to service tax under other category. In other words, the activities relating to Freight forwarding cannot be thought under CHA. The appellants had clearly explained the nature of the charges collected such as Charge Collect fees, Break bulk fees, Profit share from margin Unallocated income, Currency adjustment factor, Air/sea Freight rebate, Commission/ Brokerage, Air freight incentive, Expenses reimbursement billing, etc. We do not want to repeat the same in the findings here. Suffice to say, such charges would not be includable in ^the computation of the service tax towards CHA services. However, the Commissioner in the impugned order even while holding that these charges relate to CHA services, had also repeatedly pointed out that the appellants had not produced a Chartered Accountant’s Certificate with regard to the various deductions claimed by them. Hence, while holding that the above charges cannot be included in the value of CHA services, we remand the matter to the Original authority to re-examine the issue after giving an opportunity to the Appellants to produce the Chartered Accountant’s Certificate in respect of the various deductions claimed by them including the reimbursement. We have also examined the scope of the .Customs House Agent (CHA) as defined in the CHA Regulation, 20Cl4. This cannot be ignored-even in the matter pertains to service tax fees observed to the contrary by the Commissioner in the impugned order. We have clearly held after going through the definition of CHA in the case of Bax Global India Ltd. Vs. Commissioner of Service Tax, Bangalore [2008 (9) S.T.R. 412 (Tri. – Bang.)] that the activity of CHA relates to entry or departure of conveyances or import or export of goods at any customs station. Therefore activities of CHA is limited to customs station and it cannot extend beyond it. For sample, in the present case, the appellants collected air freight for export from the consignee. This activity relates to freight charges collected for transportation service rendered by .airliner In other words, this freight forwarding cannot be said to be activities of Customs House Agent (CHA). In a similar manner, each charge ought to have been examined by the Commissioner. This has not been done. Moreover the commissioner has confirmed exactly the same amount confirmed in his first Order-in-Original which was set aside by this Bench. The demand of service tax on transportation under the category of CFA is not correct’ in the light of the Various case laws cited by the appellants. The various reimbursement of the taxable services relating to CHA in terms of even i.e. Board’s Circular dated June 6, 1997. In these circumstances, even the de novo order suffers from various defects. In the impugned order, the Adjudicating authority has stated that the assessee did not furnish complete accounts duly certified by a Chartered Accountant. Hence we have no other option but to remand the matter to the Original authority once again for deciding the matter only in respect of the computation of the liability after providing an opportunity to the appellants to produce the Certificate from the Chartered Accountant in respect of every deduction claimed by them. As regards the demand under CFA services, the appellant had made a strong case for non includability of Rental Income, distribution charges, warehousing and transportation. Such charges are collected under separate contracts. They do not represent the charges for CFA services. The case laws relied on are squarely applicable. The commission received by CFA is only subject to service. As regards the includability or non-includability of the various-charges, we have already given our findings in this order. That should be borne in mind by the Adjudicating authority. With these observations, we remand the matter to the Original authority for re-computation of the liability. Needless to say that the appellants would cooperate with the Adjudicating authority in providing the Chartered Accountant’s Certificate in respect of the deductions claimed by them including the erroneous inclusion of the Value of CHA services in the computation of the tax liability in the CFA services. The de novo order should be issued within a period of four months from the date of receipt of this order. The impugned order is set aside and the appeal is allowed by way or remand.
