2018 (2) TMI 485 - AT - Service Tax

CHA service - service tax in respect of turnkey jobs on 15% of the gross amount charged from the clients as per the Circular dated 6.6.1997 issued by CBEC - Held that - the service tax on CHA services stands already paid by the appellant as per the Scheme, which was valid up to 2006. Hence, the Revenue is not justified in vivisecting the total lump sum received and charging service tax on activity of cargo handling under Port Services - appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of Circular dated 6.6.1997 for service tax payment on Custom House Agent services; Classification of services rendered by the appellant under Port Services; Justification of service tax demand by the department.

Analysis:
The appeal was against an Order-in-Original dated 24.4.2006 concerning service tax payment for the period 16.8.2002 to 31.2.2004. The appellant provided various services and paid service tax based on a Circular from 1997 until 2006. The department contended that the Circular did not apply as the appellant raised consolidated bills with itemized services. The department classified some activities as taxable under Port Services, leading to a service tax demand. The appellant challenged this order.

During the hearing, the appellant's counsel argued that the Circular from 1997 was applicable, as confirmed in a previous Tribunal decision. The counsel cited the case of Aspinwall & Co. Ltd., where demands similar to the present case were set aside. The appellant maintained that the service tax had already been paid correctly.

The department defended the order, stating the Circular did not apply due to the invoicing structure. They argued that separate service tax for Port Services was justified. After reviewing both sides, the Tribunal found the appellant had followed the Circular for tax payment. Referring to the Aspinwall case, the Tribunal noted that the Circular was applicable until 2006. Therefore, the Revenue's demand for additional tax on cargo handling under Port Services was deemed unjustified. The impugned order was set aside, and the appeal was allowed.

In conclusion, the Tribunal found the appellant had paid the service tax correctly per the Circular in force until 2006. The department's attempt to levy additional tax on cargo handling services under Port Services was deemed unwarranted. The decision was based on the precedent set in the Aspinwall case, where similar issues were resolved in favor of the appellant.