2008 (1) TMI 117 - AT - Service Tax

Stevedoring activity (loading & unloading of cargo) - this activity is rendered by the appellant(CHA) on his own behalf, not on behalf of the port so stevedoring charges wouldn t be considered as Port Services for purpose of ST - as assessee has showed us various bills raised on their customers & in each bill, there is clear indication of transportation charges, these charges are clearly reimbursable from customers - so these must be excluded from amount received from customers to compute AV

Summary

Issues:
1. Service Tax liability on stevedoring charges.
2. Service Tax liability on transportation charges under CHA services.
3. Imposition of penalties.

Analysis:
1. The appeal was filed against an Order-in-Original alleging non-payment of Service Tax on stevedoring charges. The Revenue claimed that the stevedoring charges fall under 'Port Services' and demanded Service Tax registration under this category. Additionally, the appellants were providing Customs House Agent services and holding registration under this category as well. The Revenue contended that since the appellants did not maintain separate accounts for transportation expenses, these charges should be included in the taxable value. The total demand amounted to Rs.1,32,32,214, including demands for both stevedoring and CHA services, along with penalties and interest.

2. The appellant's advocate argued that stevedoring services should not be considered as Port Services for Service Tax purposes, citing various precedents where similar charges were not deemed as Port Services. Regarding the demand on transportation charges under CHA services, the advocate demonstrated that the appellant did maintain separate accounts for transportation charges, which were reimbursable and should be excluded from taxable value. Consequently, the Tribunal ruled in favor of the appellant, setting aside the demands for both stevedoring and transportation charges under CHA services. As the demands were deemed unsustainable, no penalties were justified, and the impugned order was set aside with consequential relief.

3. The Tribunal concluded that the demands on stevedoring services and transportation charges under CHA services were not sustainable, leading to the setting aside of the demands and penalties. The decision was based on the argument that stevedoring charges should not be categorized as Port Services and that transportation charges, being reimbursable and separately accounted for, should not be included in the taxable value. Therefore, the appeal was allowed, and no penalties were imposed due to the lack of justification arising from the unsustainable demands.