M/S Glory Faith Shopping Agencies vs. Central Board Of Indirect Taxes And Customs - Andhra Pradesh High Court, 23 February 2026

Cause title — parties, addresses and appearances

APHC010084882021 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3529] TUESDAY,THE TWENTY FOURTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR WRIT PETITION NO: 4901/2021 Between: 1. M/S GLORY FAITH SHOPPING AGENCIES, REPRESENTED BY ITS PROPRIETOR SRI P. THANKAMANI 25-12-36, ROYCHAT BUILDING, GODEYVARI STREET, VISAKHAPATNAM, ANDHRA PRADESH - 530001 ...PETITIONER AND 1. CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, REPRESENTED BY ITS CHAIRMAN, NEW DELHI 2. THE CHIEF COMMISSIONER OF CENTRAL TAX, GST BHAVAN, PORT AREA, VISAKHAPATNAM - 530035 3. ADDITIONAL COMMISSIONER OF CENTRAL TAX AND SERVICE TAX, GST BHAVAN, PORT AREA, VISAKHAPATNAM - 530035 4. UNION OF INDIA, REP. BY SECRETARY (REVENUE), DEPT. OF REVENUE, MINISTRY OF FINANCE, NORTH BLOCK, NEW DELHI. ...RESPONDENT(S): Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased topleased to issue a writ or an order or direction more particularly one in the nature of Mandamus, or any other writs, orders or 2 directions (i) quashing Respondent No. 1s Circular No.206/4/2017 dated.13th April 2017 issued in F.No. 354/42/2016-TRU to the extent it denies the benefit of 70percent abatement, as provided by Sl.No.10 of Notification No.26/2012-ST dt.20.06.2012, of value of taxable service of transportation of goods by vessel as arbitrary, illegal and ultra vices the provisions of Finance Act, 1994, and the Constitution of India. setting aside Impugned Order dt.10-11-2020, as being passed against the statutory provisions of Finance Act, 1994, the rules and Notifications issued thereunder, and Articles 14,19(g), 265 and 300A of Constitution of India. And to pass IA NO: 1 OF 2021 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased pleased to suspend Impugned Order dt.10-11-2020 and direct the Respondents not to take any coercive steps in execution of Impugned Order dt.10-11-2020 and to pass IA NO: 2 OF 2021 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased Pleased to permit the petitioner to implead union of India represented by secretary (Revenue ) as respondent no.4 in writ petition no 490/2021 IA NO: 1 OF 2025 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased may be pleased grant leave to the Petitioner herein and to the Writ Petition No.4901 of 2021 to file rejoinder affidavit to the Counter Affidavit and pass IA NO: 1 OF 2026 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased may be pleased to grant leave to the respondents to file the

counter affidavit and pass such other order Counsel for the Petitioner:

ANIL KUMAR BEZAWADA Counsel for the Respondent(S):

1.2.

P S P SURESH KUMAR

MANNAVA APARAJITHA(CENTRAL GOVT COUNSEL)- 24210/AP/1096/2018

The Court made the following order: (per Hon’ble Sri Justice R Raghunandan Rao)

The petitioner, which was registered under the Service Tax regime, had been carrying on the business of steamer agent. The function of a steamer agent is to act as an agent for the vessel owner and to facilitate vessel birthing and coordination with the customs house agents of the consignee.

Under the Service Tax regime introduced by the Finance Act, 1994, various services were subjected to the levy of Service Tax. In the normal course, the supplier of the service was required to pay Service Tax on the remuneration received for the supply of such services. However, a provision was made to reverse the said liability and to require the recipient of the services to pay the Service Tax, under what is known as the Reverse Charge Mechanism.

A reverse charge mechanism was introduced in relation to the service of carriage of goods by the sea, under the Service Tax regime. This reverse charge mechanism was introduced by notification Nos.1/2017 & 3/2017, fastening the liability on the shipper and, consequently, on the steamer agent. On account of this reverse charge mechanism, the petitioner, being a steamer agent, was called upon to pay Service Tax on the freight charges paid by the foreign exporter to the shipper.

The petitioner initially accepted the said principle and liability to pay Service Tax on the freight charges. For the period October 2016-March 2017 and for the period April 2017-June 2017, the petitioner paid Service Tax on the freight charges received by his principal shipper.

The petitioner, while paying such Service Tax, claimed certain rebates on the quantum of Service Tax payable. The petitioner contended that he was entitled to abatement of 70% of the Service Tax by virtue of notification No.26 of 2012, dated 20.06.2012. Accordingly, the petitioner calculated the Service Tax at the rate of 4.5% on 30% of the freight charges and paid the Service Tax.

The 3rd respondent, initiated assessment proceedings, on the ground that the petitioner was not entitled to such abatement. Upon receipt of the show cause notice in relation to the said assessment proceedings, the petitioner submitted its objections, setting out the reasons as to why it was entitled to 70% abatement under notification No.26 of 2012. The objections raised by the petitioner were rejected by the 3rd respondent, who passed an order dated 10.11.2012 bringing to tax the entire freight charges paid by the foreign exporter to the shipper. Apart from bringing the entire turnover of freight charges to tax, the 3rd respondent also levied certain penalties on the petitioner.

Aggrieved by the said order passed by the 3rd respondent, the petitioner has filed the present writ petition. Apart from the challenge to 6

the assessment order, the petitioner also appears to have challenged a circular dated 13.04.2017. 8. Sri Anil Kumar Bezawada, learned counsel appearing for the petitioner, has now raised an additional ground of challenge to the impugned order of assessment. It is his contention that the petitioner was not liable to pay any Service Tax, inasmuch as the freight charges, had already been included in the cost of goods at the time of import, and customs duty had already been paid on such freight charge. The learned counsel would further contend that, in similar circumstances, various High Courts, including the Hon’ble High Court of Madras and the Hon’ble High Court of Gujarat, apart from this Hon’ble Court, have held that there could be no levy or collection of GST or Service Tax on the freight component which has already been taxed under the Customs Act.

The present contention raised by the learned counsel for the petitioner has not been raised before the 3rd respondent. It would, therefore, be appropriate for such contention to be placed before the 3rd respondent for consideration and for passing appropriate orders.

10.

We are inclined to remand the matter back to the 3rd respondent, as no fresh facts are being raised and it is only a fresh issue of law that has been raised by the petitioner.

11.

In the circumstances, this writ petition is disposed of by setting aside the impugned order dated 10.11.2012, and the matter is remanded

to the 3rd respondent for fresh adjudication, after considering the aforesaid contention of the petitioner that the levy of Service Tax on the freight component, which has already been subjected to duty under the Customs Act, cannot be permitted.

There shall be no order as to costs.

As a sequel, pending applications, if any, shall stand closed.

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R RAGHUNANDAN RAO, J

________________

T.C.D. SEKHAR, J

Dt.24.02.2026 DSB

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HON’BLE SRI JUSTICE R RAGHUNANDAN RAO AND HON’BLE SRI JUSTICE T.C.D. SEKHAR

WP.No.4901 of 2021 Dated 24.02.2026

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