2014 (2) TMI 388 - AT - Service Tax

Waiver of pre deposit - Penalties under Sections 76, 77 & 78 - Service tax liability not discharged - Port services - Transportation of coal cargo - Held that - appellant, is the owner of the barges, which ply between mother ship and the shore and versa, carrying cargo. It is the also undisputed that the appellant had hired out these harges to M/s Shreeji Shipping and other firms for doing the activities - appellant had, in fact, charged M/s Shreeji Shipping and other firms an amount as a consideration, based upon the quantity of goods loaded/unloaded in their barges - appellant s barges are utilized for movement of cargo from ship to shore and vice versa and that the appellant is charging the consideration per tonnage of the goods hauled - appellant had not made out a prima facie case for complete waiver of pre-deposit of amount involved - Conditional stay granted.

Summary

Issues:
Waiver of pre-deposit of Service Tax, interest, and penalties under Sections 76, 77 & 78 of Finance Act, 1994 for transportation of coal cargo from ship to shore and jetty to plot on barges/vessels.

Analysis:
The appellant filed a Stay Petition seeking waiver of pre-deposit of Service Tax amounting to Rs.69,90,654/-, interest, and penalties under Sections 76, 77 & 78 of Finance Act, 1994. The adjudicating authority confirmed the amounts due for the period 2005-2006 to 2008-2009, stating that the appellant had not discharged the Service Tax liability for port services involving transportation of coal cargo. The appellant argued that the income accrued from services rendered by transporting cargo from ship to shore and vice versa using their barges was not related to any vessels in the port area. Additionally, there was a demand of Rs.3.99 lakhs for ineligible availment of CENVAT Credit, which the appellant claimed was incorrectly confirmed. The appellant contended that the services provided were not classifiable under port services but under Supply of Tangible Goods.

The Additional Commissioner argued that as the owner of the barges, the appellant provided services concerning goods in the port area by transporting coal from ship to jetty and other cargo from jetty to ship during the relevant period. Both sides presented detailed submissions, and upon reviewing the records, it was found that the appellant owned the barges that carried cargo between the mother ship and the shore, and had hired them out to other firms for activities. The appellant charged these firms based on the quantity of goods loaded/unloaded in their barges. The classification of the service provided by the appellant was a crucial issue, as the appellant's barges were used for the movement of cargo, and charges were based on the tonnage of goods hauled.

The Tribunal concluded that the appellant had not established a prima facie case for a complete waiver of the pre-deposit amount. Therefore, the appellant was directed to deposit Rs.10 lakhs within eight weeks and report compliance. The application for waiver of pre-deposit of the remaining amounts was allowed subject to compliance, and recovery was stayed until the appeal's disposal. The decision highlighted the need for further detailed examination of the case due to the arguable nature of the issue regarding the classification of services provided by the appellant.