2014 (1) TMI 1094 - AT - Service Tax

Demand of service tax - Port services - Handling of export cargo - Penalty imposed u/s 76 - What is covered under the Port Services under Section 65(82) is a taxable service rendered in a Port area. If the handling of cargo is excluded from the scope of a taxable service, it cannot come within the purview of Port Service as defined. This is the view taken by the Hon ble High Court of Karnataka in the case of Konkan Marine Agencies (2008 (3) TMI 285 - HIGH COURT KARNATAKA ). Therefore, there is merit in the claim of the appellant that the Service Tax liability is not attracted in respect of export transactions. However, the matter needs verification at the adjudicating authority s end. Therefore, we remand the matter back to the adjudicating authority to verify the particulars submitted by the appellant in this regard and satisfy himself that the amounts collected by the appellant pertain to handling of export cargo - Decided in favour of assessee by way of remand.

Summary

Issues: Service Tax liability on handling of export cargo at a port premises.

Analysis:
1. Background: The appeal and stay application challenge Order-in-Original No. 06/ST/HB/2012-13 passed by the Commissioner of Service Tax, Mumbai, against M/s. J.M. Baxi & Company for not discharging Service Tax liability on handling export cargo at Paradeep Port in Orissa.

2. Appellant's Argument: The appellant contends that handling of export cargo is excluded from Cargo Handling Services and Port Services, thus not attracting Service Tax liability. They rely on a Karnataka High Court decision and a circular from C.B.E. & C. to support their claim.

3. Revenue's Response: The Revenue argues that the appellant failed to provide evidence showing that the consideration received pertained to handling of export cargo, leading to the conclusion that Service Tax is due under Port Services.

4. Additional Evidence: The appellant later submitted detailed evidence, including shipping bills and invoices, totaling Rs. 44,31,66,538, confirming that the services were related to export activities.

5. Tribunal's Decision: After reviewing the submissions, the Tribunal acknowledges that handling of export cargo falls outside the taxable scope of Cargo Handling Services and Port Services, aligning with the Karnataka High Court's interpretation. The matter is remanded to the adjudicating authority for verification of the appellant's evidence to ensure compliance with the law.

6. Outcome: The appeal is allowed for remand, directing cooperation between the appellant and the department for document verification. The stay application is also disposed of, pending a fresh order from the adjudicating authority.

This detailed analysis of the judgment highlights the legal arguments, interpretations, and the Tribunal's decision regarding the Service Tax liability on handling export cargo at a port premises, providing a comprehensive understanding of the case.