The tribunal examined whether a logistics firm acting as a multimodal transport operator is an agent or principal. It followed precedents holding that principal-to-principal trading of cargo space is not taxable service, reversing the department's demand.
The impugned order set aside and the appeal allowed. No service tax demand confirmed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI
PRINCIPAL BENCH - COURT NO.III
SERVICE TAX APPEAL NO.50792 OF 2021
[Arising out of Order-in-Original No.16-17/Commr./Delhi East/P.V./2021 dated 16.03.2021. passed by the Commissioner, Adjudication, Central Tax, GST Delhi East]
M/s. Shikhar Logistics Pvt. Ltd.
Appellant
32, 2nd Floor, Krishna Market, Kalkaji, New Delhi-110 019.
VERSUS
Commissioner of Central Tax, Respondent
GST Delhi East, C.R. Building, I.P. Estate, New Delhi-110 002.
APPEARANCE :
Shri Bimal Jain, Advocate for the appellant. Shri V.K. Jain, Authorised Representative for the respondent.
CORAM:
HON’BLE MS. BINU TAMTA, MEMBER (JUDICIAL) HON’BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)
FINAL ORDER NO.51186/2025
DATE OF HEARING: 06.08.2025 DATE OF DECISION:18.08.2025
BINU TAMTA:
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which the appellant had paid to the shipping lines can be termed as provisions of taxable service classifiable under „Business Auxiliary Service” and its liable to service tax. Show cause notice dated 18.07.2016 was issued for the period 20.11.2012 to 2014-15 demanding a sum of Rs.2,12,38,744/towards service tax along with interest and penalty. On adjudication, the demand has been confirmed by the order-in-original no.16-17/Commr/Del East/PV/2021 dated 16.03.2021. Hence the present appeal has been filed by the appellant.
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marker is not towards rendering any services, rather it amounts an activity of business where there is an element of profit and also the risk of incurring of loss in the event there is no sale. The decision cited by the learned Counsel are as under:-
The observations made by the Tribunal in the case of Greenwich Meridian
Logistic (I) Pvt. Ltd. Vs. CST, Mumbai is reproduced below:-
“12. The appellant takes responsibility for safety of goods and issues a document of title which is a multi-modal bill of lading and commits to delivery at the consignee‟s end. To ensure such safe delivery, appellant contracts with carriers, by land, sea or air, without diluting its contractual responsibility to the consignor. Such contracting does not involve a transaction between the shipper and the carrier and the shipper is not privy to the minutiae of such contract for carriage. The appellant often, even in the absence of shippers, contract for space or slots in vessels in anticipation of demand and as a distinct business activity. Such a contract forecloses the allotment of such space by the shipping line or steamer agent with the risk of non-usage of the procured space devolving on the appellant. By no stretch is this assumption of risk within the scope of agency function. Ergo , it is nothing but a principal-to-principal transaction and the freight charges are consideration for space procured from shipping line. Correspondingly, allotment of procured space to shippers at negotiated rates within the total consideration in a multi-modal transportation contract with a consignor is another distinct principal-to-principal transaction. We, therefore, find that freight is paid to the shipping line and freight is collected from clientshippers in two independent transactions.”
1 2017 (4) GSTL 2015
2 2022 (63) GSTL 337 (Tri.-Del.)
3 2016(43) STR 215 (Tri.-Mumba)
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the case of Marinetrans India Pvt. Ltd. Vs. CST, Hyderabad4 .
Para-2.2 of the said circular is reproduced below:-
“The freight forwarders may also act as a principal who is providing the service of transportation of goods, where the destination is outside India. In such cases the freight forwarders are negotiating the terms of freight with the airline/carrier/ocean liner as well as the actual rate with the exporter. The invoice is raised by the freight forwarder on the exporter. In such cases where the freight forwarder is undertaking all the legal responsibility for the transportation of the goods and undertakes all the attendant risks, he is providing the service of transportation of goods, from a place in India to a place outside India. He is bearing al the risk and liability for transportation. In such cases they are not covered under the category of intermediary, which by definition excludes a person who provides a service on his account.”
4 2020 (33) GSTL 241 (Tri. Hyd.)
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1993, the appellant submitted that in the capacity of Multimodal Transportation of Goods, they are responsible for safe custody of the cargo and, therefore, it buys insurance cover to take the responsibility for all the risks during the transportation and is also liable for any loss or damage to the consignment.
[Order pronounced on 18.08.2025]
(BINU TAMTA) MEMBER (JUDICIAL)
Ckp.
2 issues framed by the court
Whether the appellant is providing taxable service as an agent or acting as a principal in the trading of cargo space.
Whether the markup amount charged by the appellant falls under 'Business Auxiliary Service' liable for service tax.
Colour shows how this judgement treated each authority
CST, New Delhi Vs. Karam Freight MoversReferred¶27
2017 (4) GSTL 2015
Tiger Logistics (India)Ltd. Vs. CST-II, DelhiReferred¶28
2022 (63) GSTL 337 (Tri.-Del.)
Greenwich Meridian Logistic (I)P.Ltd.Vs.CST, MumbaiFollowed¶29
2016(43) STR 215 (Tri.-Mumba)
Marinetrans India Pvt. Ltd. Vs. CST, HyderabadReferred¶38
2020 (33) GSTL 241 (Tri. Hyd.)
1 provisions across 1 enactments
M/s. Shikhar Logistics Pvt. Ltd.
Commissioner of Central Tax, GST Delhi East
Binu Tamta
P.V. Subba Rao
As recorded by the court registry
An appeal in a service tax matter before CESTAT.
Judgements on the same questions, provisions and authorities, from every court
