In a recent ruling, the Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) in the issue regarding the taxability of co-loader and air freight business under the category of courier agency service.
In this case, the appellant, The Freight Centre, operating out of Ahmedabad, had been providing courier services since 2005.
On the verification by the officers of the Service Tax Commissionerate during an audit of the company’s service tax returns (ST-3) and its profit & loss accounts, the authorities noticed a difference between the income declared in the ST-3 returns and the company’s financial records, leading to a show cause notice and a demand for service tax amounting to ₹2.82 crore under Section 73(1) of the Finance Act, 1994.
Get a Copy of Become PF & ESIC Pro: Basic to Advance Course – Enroll Today, Click here
The Commissioner verified the claim of Rs. 2,82,62,810 under Section 73(1) of the Finance Act, 1994, through the impugned order-in-original. Additionally, the Commissioner demanded interest under Section 75 and imposed penalties under Sections 76 & 78 of the Finance Act, 1994.
The counsel on behalf of the appellant contended that in addition to providing courier agency services, it also undertakes the export of cargo by air from one airport to another in a foreign country.
The bench observed that except for the two consignments related to Gujarat Institute of Housing and Estate Developers and M/s. Infinity Logistics, there is no evidence on record, either provided by the appellant or reviewed by the authority, clarifying the nature of the transactions and no documentation or details regarding invoicing, freight charges to the airport, or the final destination have been submitted.
Get a Copy of Become PF & ESIC Pro: Basic to Advance Course – Enroll Today, Click here
Although the CESTAT, comprising Ramesh Nair Member (Judicial) and C L Mahar Member (Technical), found merit in the appellant’s arguments, it remanded the case back to the original authority for further examination of other transactions not covered in the current order.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
