Services providing to Shipping Lines Falls Under Category of Steamer Agent u/s 65 (100) of Finance Act: CESTAT Upholds Service Tax Addition [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld that the service tax addition on services provided to shipping lines falls under the category of steamer agent under section 65(100) of the Finance Act,1994. 

Intermark Shipping Agencies Pvt Limited, the appellant assessee working as sub-agent of Steamer Agent and providing services under the category of ‘Business Auxiliary Services’ and ‘Business Support Services’, and the assessee were appointed as sub-agent by Freight Connection India Pvt. Limited to perform various works under the category of Steamer Agency Service. 

The assessee appealed against the order passed by the Commissioner to confirm the demand for service tax on brokerage income under the category of steamer agent service. 

Jigar Shah, the counsel for the assessee contended that the assessee had not provided service of the Steamer Agent to any shipping line and the department’s contention that Freight Connection India Pvt. Limited was the principal and the assessee being termed as the steamer agent was legally incorrect. 

Further submitted that Freight Connection India Pvt. Limited had been paying service tax on the charges received by them from various shipping lines and the tax had been paid by the assessee the same would have been available as CENVAT credit to Freight Connection India Pvt. Limited and therefore, there was no revenue effect in the entire exercise, and hence the matter was revenue neutrality. 

Prakash Kumar Singh, the counsel for the revenue relied on the decisions made by the lower authorities and contended that the assessee was liable to pay the service tax on providing services to shipping lines under the category of steamer agent and the demand raised by the revenue department was as per the law and liable to be sustained. 

The Bench observed that the work of the steamer agent was performed by the appellant as a sub-agent of the main steamer agent and that the services rendered by the assessee will be rightly classifiable under the category of steamer agent. 

The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) upheld the demand for service tax while dismissing the appeal filed by the assessee. 

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