2024-VIL-269-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax – Section 65(19)(vi) of Finance Act, 1994 – Classification of services – Demand of tax – Appellant entered into contract with its clients to render services in relation to import of goods from abroad – For performance of overseas part of above-mentioned services, Appellant entered into contracts with various Overseas Logistics Service Providers (OLSPs) – Appellant has not paid service tax on services rendered abroad by OLSPs – Department demanded service tax on these activities under category of Business Auxiliary Services and confirmed demand of service tax – Whether services provided by OLSPs to Appellant are taxable under category of Business Auxiliary Service as defined under Section 65(19)(vi) of the Act – HELD – Services provided by OLSPs will be taxable under Section 65(19)(vi) of the Act only if services are provided on behalf of Appellant to customers of Appellant – OLSPs are not acting as 'agents' of Appellant while handling cargo of customers of Appellant – OLSPs books space on various shipping lines/airlines for purpose of transportation of goods from abroad to India – Contract is with shipping line/airline and OLSPs – Shipping line/airline issues invoice in name of OLSPs – OLSPs in turn enter into contract with Appellant – OLSPs charge agreed fixed charges from Appellant – There is no contract between OLSPs and customers of Appellant – Services rendered by OLSPs cannot be categorized under category of Business Auxiliary Services, hence, demand of service tax under said category is not sustainable – Demand of service tax confirmed in impugned order is set aside – Appeal allowed
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