2013 (10) TMI 1266 - AT - Service Tax

Waiver of pre deposit - Port services - extended period of limitation - Held that - during the relevant period, the issue whether stevedoring services would fall under the category of port services or not, different Benches of Tribunal i.e. in the case of Konkan Marine Agencies and Velji P. & Sons etc. were of the view that their services are not covered under port services, can be held as a bonafide belief. At the same time, we find that some portion of the demand of the tax is within limitation, which, on specific query when the Bench was informed of will be approximately Rs.5 lakhs and he also agreed to deposit the said amount within four weeks for prosecuting the appeal. The appellant is directed to deposit an amount of Rs.5 lakhs within a period of four weeks from today - stay granted partly.

Summary

Issues involved: Stay petition for waiver of pre-deposit of service tax liability confirmed for the period 01.10.05 to 30.09.10 under the category of port services, invoking extended period, applicability of judgments favoring the appellant, authorization for lighterage and stevedoring work, interpretation of Gujarat Maritime Board provisions, and the necessity of pre-deposit for the balance amount.

Analysis:

1. The primary issue in this case pertains to the service tax liability confirmed upon the appellant for the period 01.10.05 to 30.09.10 under the category of port services. The appellant filed a stay petition seeking a waiver of pre-deposit of the said liability. The adjudication order also included interest and penalties under the Finance Act, 1994. The key contention revolved around whether the extended period could be invoked for the show cause notice issued to the appellant on 07.01.11. The appellant argued that judgments favored them, indicating that stevedoring charges might not fall under port services, citing the case of Western Agencies. The appellant also highlighted that the Larger Bench view on such services had been stayed by the High Court of Chennai. The appellant referred to the case of Konkan Marine Agencies pending before the Apex Court to support their position.

2. The issue of services rendered by the appellant, specifically lighterage and stevedoring charges, was central to the case. The appellant was operating at Hazira port under authorization from M/s. Essar Steel Ltd. The argument presented was that the stevedoring work was authorized by M/s. Essar Steel Ltd., and the provisions of Section 32 of the Gujarat Maritime Board were relevant in this context. The appellant contended that there were no specific findings indicating their awareness of the tax liability on such services.

3. After considering the submissions from both sides, the Tribunal found that for the period from 14.04.07 to 31.12.09, the extended period could not be invoked based on the show cause notice dated 07.01.11. The Tribunal acknowledged the differing views on whether stevedoring services fell under port services during the relevant period, as seen in cases like Konkan Marine Agencies and Velji P. & Sons. The Tribunal directed the appellant to deposit Rs.5 lakhs within four weeks and report compliance. Upon compliance, the application for waiver of pre-deposit for the balance amount of the service tax liability confirmed by invoking the extended period was allowed, and recovery stayed pending appeal disposal.

4. In conclusion, the Tribunal's judgment addressed the various legal arguments presented by both parties, considered the applicability of precedent judgments, and made a decision based on the specific circumstances of the case, including the necessity of pre-deposit and the interpretation of relevant legal provisions and authorities.

This detailed analysis covers the key issues and the Tribunal's decision in the legal judgment, preserving the legal terminology and significant details from the original text.