2008 (3) TMI 245 - AT - Service Tax

Mere transportation of materials cannot come under Cargo Handling Services - Steamer Agents had already included the Service Tax in their bills raised to appellants - so, there is no question of payment of Service Tax again - services rendered by the appellant to foreign ship owners by way of identifying & procuring the services of Steamer Agents, CHA, Stevedores for ships is covered under Business Auxiliary Service, not under Steamer Agent Services as wrongly held in the impugned order

Summary

Issues:
1. Whether the appellant is required to pre-deposit specific amounts towards Service Tax, Education Cess, penalties, and interest for various services rendered.
2. Whether the appellants' services fall under the category of "Cargo Handling Services" and "Other Port Services" as per the Finance Act, 1994.
3. Whether the imposition of penalties and interest by the department is justified.
4. Whether the appellants are liable to pay Service Tax under the heading of "Steamer Agent Services" and the legality of such levy.

Analysis:

Issue 1:
The judgment addresses the requirement for the appellant to pre-deposit specific amounts towards Service Tax, Education Cess, penalties, and interest for services rendered, detailing the amounts for different periods and services provided.

Issue 2:
The judgment extensively discusses whether the appellants' services qualify as "Cargo Handling Services" and "Other Port Services" under the Finance Act, 1994. The appellants argued that they only undertook transportation of goods, not loading and unloading, thus challenging the categorization of their services. The court analyzed various contracts and operations to determine the nature of services provided, ultimately finding in favor of the appellants due to lack of loading and unloading activities, leading to a waiver of Service Tax, penalties, and interest.

Issue 3:
Regarding the imposition of penalties and interest by the department, the judgment delves into the justifications provided by the Commissioner for levying penalties due to alleged suppression of facts by the appellants. However, the court found the Revenue's case weak based on the appellants' arguments and ordered a complete waiver of the demanded amounts until the appeal's final decision.

Issue 4:
The judgment scrutinizes the liability of the appellants to pay Service Tax under the heading of "Steamer Agent Services" and the legality of such levy. The appellants contended that they arranged steamer agents and were only liable for Business Auxiliary Services, for which they were duly registered. The court agreed with the appellants, emphasizing that the inclusion of Service Tax in invoices by steamer agents precluded double taxation, leading to the waiver of the demanded amounts.

In conclusion, the judgment rules in favor of the appellants, granting a waiver of Service Tax, penalties, and interest, highlighting the lack of loading and unloading activities in the services provided and the absence of double taxation in the invoicing process.