INTERNATIONAL CLEARING AND SHIPPING AGENCY Vs. CCE

JUDGEMENT

(1.) IN the impugned Orders -in -Appeal No. 60/05 dated 30 -12 -2005 and 59/05 dated 30 -12 -2005, the Commissioner (Appeals) has sustained demand, respectively of Rs. 5,28,058/ - and Rs. 3,74,981/ -, along with interest, made by the original authority in terms of Section 73A of the Finance Act. 1994, as amended. These amounts were demanded from M/s. International Clearing and Shipping Agency, Chennai being the service tax short paid for Steamer Agents' service and Customs House Agent's service rendered by the assessee. The orders relate to the period 1 -4 -2002 to 31 -3 -03. The tax amounts relate to various amounts decided to be collected by the assessee in its capacity as Steamer Agent and CMA and accounted for in its Balance Sheet for the relevant period as 'operational surplus'. Findings in both the impugned orders as regards liability of the assessee are similar and as in two such orders passed by the Commissioner for an earlier period, except that he has vacated penalties imposed by the original authority in the impugned orders.

(2.) IT is seen that the operational surplus of the assessee as Steamer Agent comprised realisation in excess of actual expenses like lift/on/off/storage/transportation/survey/monitoring services etc., the rebate and brokerage incurred by the appellants on behalf of various shipping lines. The lower appellate authority has treated these surplus charges received by the assessee from various shipping lines as remuneration for services rendered in any manner in relation to ships' husbandry, dispatch or any administrative work related thereto as well as the booking, advertising or canvassing of cargo and container feeder services. According to him, all the above services rendered in any manner to a shipping line by a Steamer Agent were taxable services. The above charges were decided to be part of taxable value and accordingly, the demand was confirmed.

(3.) LD . Counsel appearing for the appellants, argued that the surplus in both cases did not comprise the amounts collected towards service rendered as Steamer Agent or CHA. The amounts incurred on behalf of their clients on various items of work had been reimbursed to them. As the payments had been made upfront and on ad hoc basis, there were excess realisations in certain cases. These amounts did not represent taxable value. Citing the decision of the Hon'ble Supreme Court in the case of Baroda Electric Meters [1997 (94) E.L.T. 13 (S.C.)], it was submitted that no tax was due on profit made by the assessee on any ancillary activity not being the activity liable to lax.