2007 (9) TMI 113 - AT - Service Tax

Port services Collection of railway siding charges Railway siding charges are different from Railway haulage charges and are outside the scope of Service Tax under the category of Port services These charges have not been received in relation to vessel or goods Demand unsustainable

Summary

Issues:
Service Tax liability on Railway Siding Charges.

Analysis:
The appeal was filed against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Mangalore. The Revenue alleged that the appellants did not discharge the Service Tax liability on the Railway Siding Charges received by them from July 2001 to March 2004. The Adjudicating Authority confirmed the Service Tax amount and imposed a penalty under Section 76 of the Finance Act, 1994. The appellants approached the Commissioner (Appeals) who upheld the lower authority's order, leading the appellants to appeal to the Tribunal for relief.

The appellants argued that the Railway siding charges they received were distinct from other charges and should not be subject to Service Tax under the category of 'Port services'. The Commissioner (Appeals) disagreed, stating that any service provided by a Port in relation to goods and vessels is considered a Port service and is taxable. The Commissioner concluded that the receipts for the use of siding are subject to service tax, regardless of their distinction from other charges.

The appellants contended that no service was provided regarding the usage of railway sidings in their yard, emphasizing that the charges were for allowing the Railways to utilize the railway marshalling yard under an Agreement. The Tribunal found that the charges were received for the utilization of the Port Railway Yard and did not represent payment for services rendered by the appellants. The Tribunal also noted that there was no evidence of wilful suppression of facts and that the demand for Service Tax on Railway Siding charges was not in accordance with the law. Therefore, the appeal was allowed with consequential relief.

In conclusion, the Tribunal ruled that the demand for Service Tax on the Railway Siding charges was unjustified as the charges were not for services rendered by the appellants but for the utilization of the Port Railway Yard. The Tribunal found no basis for invoking a longer period or alleging suppression of information. Consequently, the appeal was allowed, and the impugned order was deemed to have no merits.