2008 (10) TMI 571 - Commissioner - Service Tax

Summary

Issues Involved:
1. Non-registration under the category of Port Service.
2. Non-payment of service tax under Port Service.
3. Classification of services provided by the appellant.
4. Rejection of appeals by the Commissioner (Appeals) without considering modification applications.
5. Definition and authorization under Port Services.

Detailed Analysis:

1. Non-registration under the category of Port Service:
The appellant did not obtain registration under Section 69 of Chapter V of the Finance Act, 1994, under the category of Port Service. They were registered under the category of Cargo Handling Service and paid service tax accordingly. The investigation revealed that the services provided by the appellant in the port area should fall under Port Services as defined under Section 65(82) of the Act.

2. Non-payment of service tax under Port Service:
The appellant did not pay service tax under Port Service but paid under Cargo Handling Service. The Additional Commissioner, Central Excise, Bhavnagar, confirmed the demand of Rs. 11,22,286/- and Rs. 5,97,352/- along with interest and imposed penalties under Sections 75A, 77, and 78 of the Finance Act.

3. Classification of services provided by the appellant:
The services provided by the appellant included Stevedoring, barge service, crane service, storage services, etc. The adjudicating authority held that these services fall under Port Services. However, the appellant contended that their services fall under Cargo Handling Services and Steamer Agent, and they were not authorized to operate the entire port.

4. Rejection of appeals by the Commissioner (Appeals) without considering modification applications:
The Commissioner (Appeals) rejected the appellant's appeals under Section 35F of the Central Excise Act, 1944, without considering the modification applications and without a proper hearing. The CESTAT, Ahmedabad, held that this conduct was not in accordance with judicial precedent and remanded the matter for reconsideration.

5. Definition and authorization under Port Services:
The definition of Port Services under Section 65(82) of the Act includes any service rendered by a port or a person authorized by the port. The appellant argued that they were not authorized to operate the entire port and thus their services should not fall under Port Services. The CESTAT judgments in Homa Engineering Works and Velji P. & Sons clarified that licenses issued by port authorities do not constitute authorization to provide port services.

Conclusion:
The Commissioner (Appeals) found that the appellant's services do not fall under Port Services as they were not authorized to operate the entire port. The demand for service tax under Port Services was not sustainable. The appeals were allowed, and the impugned orders were set aside.