Service tax not leviable on income earned via buying and selling space on ships

Tiger Logistics India Ltd Vs Commissioner of Central Tax (CESTAT Delhi)

CESTAT Delhi held that buying and selling space on ships does not amount to rendering a service and any profit or income earned through such transactions would not be leviable to service tax.

Facts- Service tax appeal has been filed by M/s. Tiger Logistics (India) Ltd to assail that part of the order passed by the Commissioner Adjudication, Central Tax, GST, East that confirms the demand of service tax amounting to Rs. 5,65,06,546/- with interest u/s. 75 of the Finance Act, 1994 and penalty u/s. 78(1), 77(1)(a), 77(2) and 70 of the Finance Act.

The appellant is engaged in providing the Customs clearance of cargo on behalf of the clients; along with customs clearance, transportation service as an incidental service to the clients; and Freight forwarding.

The actual amount of freight paid by the appellant to the airlines or shipping lines may be more or less than the amount of freight agreed to with the customer; the differential being the profit or loss accruing to the appellant from the sale of cargo space. The appellant claims to act on a principal-to-principal basis with their clients for rendering this service.

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