2022 (3) TMI 804 - CESTAT AHMEDABAD

Classification of services - taxable under port services or otherwise i.e service of water transportation or not? - barge activity carried out by the Appellant for transportation of goods from port to Mother Vessel through barges and barging/ lighterage charges recovered from customers - period from November 2006 to May 2009 - HELD THAT:- Under the “Port Service”, service provided by a Port, other port or any person authorised by such port is taxable. The Appellant liable to pay tax under above entry only if they had been authorized by the Port to render services in relation to vessels or goods. In the present case department failed to produce any evidence by which it can be prooved that the Appellant were authorized by the port for providing services at port. There is no authorization by the Port to the appellant to render the said services - the lease agreement dtd. 03.04.2006 made between Appellant and Director of Port & Inland Water Transport, Government of Karnataka and observed that the said lease agreement is for use of Port Land for stacking and import /export of Iron Ore / Manganese Ore and other Bulk Cargoes at Belekeri Port.

In the present matter, it is also noted that other than the barging charges, Appellant also collected charges from Customers for handling of the cargo and loading and unloading of cargo etc. and Appellant had paid the Service tax on the amount charged towards cargo handling activity. The Appellant have not paid the service tax on barging activity during the period November 2006 to May 2009. They also not charged any service tax to customers on receipts related to barging service. The new entry viz “Transport of Coastal Goods and Goods Transport through National Water ways and Inland Water Ways” was introduced from Finance Act 2009.

Time limitation - Penalty - HELD THAT:- In the facts of the present that firstly the issue involved is of pure interpretation of legal provisions therefore, it cannot be said that the Appellant had any mala fide intentions and have suppressed any fact with intention to evade payment of service tax. It is also on record that the Appellant have represented the matter before Audit team and also before department during the investigation of case. This clearly shows that there is no suppression or willful misstatement on the part of the Appellant. The Appellant in the present matter also provided all the details /documents/ records related to the disputed activity before department. In this circumstances charge of suppression or wilful misstatement do not survive against the Appellant. Thus extended period of limitation is also not invokable in the present matter and no penalty is payable.

Appeal allowed - decided in favor of appellant.