2018 (3) TMI 1240 - AT - Service Tax

Whether appellant, being a registered service provider under the category of Cargo Handling Service, needs to be taxed for an amount received by them under Port service or otherwise? Held that - there is nothing on record to indicate that the respondent herein were registered with Port authorities for rendering port services. In the absence of any such evidence, it has to be considered that the respondent has correctly discharged the service tax liability under Cargo Handling Service - appeal dismissed - decided against Revenue.

Summary

Issues:
Classification of services provided by the appellant under Cargo Handling Service or Port Service for tax liability determination.

Analysis:
The appeal was filed by the revenue against the Order-in-Appeal No. 23/2008, questioning the tax liability of the appellant, a registered service provider under Cargo Handling Service, for an amount received under Port service or otherwise. The first appellate authority ruled in favor of the respondent, stating that the appellant was correctly classified under Cargo Handling Service and not Port Service. The authority relied on CBEC Circular No. B/43/1/1997-TRU to support its decision. The circular clarified the services provided by a Custom House Agent (CHA) and how service tax should be computed only on the gross service charges billed by the CHA to the client. The circular also highlighted that various expenses incurred by the CHA on behalf of the client, such as statutory levies and reimbursable expenses, should not be included for computing service tax.

The appellate tribunal, after considering the arguments from both sides and examining the records, found that the revenue's grounds of appeal did not strengthen their case. The tribunal agreed with the first appellate authority's conclusion that the appellant was correctly classified under Cargo Handling Service based on the CBEC Circular. The tribunal noted that there was no evidence to suggest that the appellant was registered with Port authorities for providing port services. Therefore, the tribunal upheld the first appellate authority's decision, stating that the appellant had discharged their service tax liability correctly under Cargo Handling Service. Consequently, the tribunal held that the impugned order was legally sound and rejected the appeal.

In conclusion, the judgment clarified the classification of services provided by the appellant, emphasizing the importance of relevant circulars in determining tax liabilities. The decision highlighted the necessity for proper registration and evidence to support the classification of services for tax purposes. The tribunal's analysis focused on aligning the appellant's services with the appropriate category under the law to ensure accurate tax assessment and compliance.