Various charges collected by Steamer Agent from the importers/exporters of goods under different names are liable to service tax under Business Auxiliary Services with effect from 10-09-2014

MSC Agency (India) (P.) Ltd. vs. Commissioner of Central Excise, Thane-I (Mumbai - CESTAT) [2014] 49 taxmann.com 561

FACTS:

Appellant registered under "steamer agency" also collected service charges from importers and exporters for various other services rendered in respect of the import/export cargo

handled by appellant. Such services included; bill of lading fees; LCL consolidation charges; amendment charges for amendments in the bill of lading; facilitation/processing charges; administration charges for stamp duty; delivery order fees for taking delivery of cargo; documentation fees for export to USA; hazardous documentation charges for taking special care of hazardous cargo; bill of lading surrender charges; manifest correction charges; and detention waiver/refund processing charges. Appellant did not charge service tax on such service charges. According to department, these services merit classification under "Business Auxiliary Service" ('BAS'). The Appellant contended that such other services cannot be taxed under BAS, since BAS encompasses services only when the same is rendered on behalf of another person, and services in the present case are not rendered on behalf of shipping lines

HELD:

The Hon'ble Tribunal analysed the scope of BAS u/s. 65(19) and held that the activities undertaken by the appellant for which service charges are collected are in respect of cargo imported or exported by their customers. Thus, these services were in relation to "procurement of goods or services, which are inputs for the client" and such services clearly fall under sub-Clause (iv) of section 65 (19) as it stood with effect from 10-09-2004. Even if it is held that these activities did not fall under Sub-Clause (iv), they would certainly fall under sub-Clause (vii) namely "any service incidental or auxiliary to any activity specified in sub-Clauses (i) to (vi)." Even if the appellant had acted as a commission agent as claimed by them, they would fall under sub-Clause (vii) of Clause (19) of section 65 as the entry covered the services rendered as a commission agent.