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2008 (8) TMI 90 - AT - Service TaxDemand of service tax on services classified as port services BAS , C/F Agent s Service , GTA s Service , CHA s Service and Steamer Agent s Service scope and ambit of Port service defined in Finance Act, 1994 to be found out without reference to anything contained in Major Port Trusts Act, 1963 Cargo handling service within limits of major/minor port being more specific in relation to port, is covered under Port service matter referred to larger bench for rest of issues
Issues Involved:
1. Classification of services as "port services" under Section 65(82) of the Finance Act, 1994. 2. Authorization by the port for services other than stevedoring. 3. Interpretation of "port services" with reference to the Major Port Trusts Act, 1963. 4. Subsidiary issues related to specific services such as C&F Agent's Service, Business Auxiliary Service, etc. Detailed Analysis: 1. Classification of Services as "Port Services": The primary issue addressed was whether the activities performed by the assessees within the port area, other than stevedoring, could be classified as "port services" under Section 65(82) of the Finance Act, 1994. The counsel for the assessees argued that for a service to be classified as "port services," it should be one rendered by a port or any person authorized by the port in relation to a vessel or goods and should be specified under Section 42(1) of the Major Port Trusts Act, 1963. The assessees were only authorized to render stevedoring services and not the other services in question, which were not specified under Section 42(1) nor had any scale of rates framed for these services under Section 48 by the Tariff Authority for Major Ports (TAMP). Therefore, they contended that these services should not be classified as "port services." 2. Authorization by the Port: The Revenue's Special Consultant argued that the definition of "port service" under Section 65(82) of the Finance Act, 1994 should be interpreted without reference to the Major Port Trusts Act except for the definition of "port." He contended that the definition was broad enough to encompass any service rendered within the port area by a port or any person authorized by the port. The consultant further argued that a stevedoring license implied authorization to carry out allied/ancillary operations. The Tribunal's decisions in Homa Engineering and Velji cases, which had previously held that such services were not "port services," were challenged by the Revenue. 3. Interpretation with Reference to the Major Port Trusts Act: The Tribunal examined the provisions of the Major Port Trusts Act, 1963, particularly Section 42(1), which specifies services that the Board of Trustees of a major port can undertake. The counsel for the assessees argued that the Board did not authorize the assessees to perform any of the services listed under Section 42(1) and that the stevedoring licenses issued did not constitute authorization under Section 42(3). The Tribunal noted that the scope and ambit of "port services" under Section 65(82) of the Finance Act, 1994 should be determined without reference to the Major Port Trusts Act to avoid absurd results for minor ports, which are governed by the Indian Ports Act, 1908. 4. Subsidiary Issues: (a) Supervision of loading of coal by M/s. SICAL at Talcher was contested as either C&F Agent's Service or Business Auxiliary Service. (b) Whether M/s. Western Agencies (Madras) Pvt. Ltd. were sub-contractors of stevedore agents and whether identical tax demands were raised on the main contractors. Conclusion: The Tribunal concluded that the definition of "port service" under Section 65(82) of the Finance Act, 1994 should be interpreted broadly to include any service rendered within the port area by a port or any person authorized by the port. The Tribunal directed that the issue be considered by a Larger Bench to settle the following questions: (a) The applicability of provisions other than the definition of "port" from the Major Port Trusts Act or the Indian Ports Act to the interpretation of "port service." (b) Whether stevedoring in a major or minor port constitutes a "port service." (c) Whether ancillary activities to stevedoring, such as intercarting, storage, blending of coal, etc., can be classified as "port services." (Pronounced in open court on 26-8-2008)
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