2023 (4) TMI 437 - AT - Service Tax

Valuation of services - Port Services - it was alleged that taxable value has not been worked out properly as the amount of rebate has not been included in the taxable value as per Section 67 of the Finance Act, 1994 read with Rule 3 (a) of Service tax (Determination of Value) Rules, 2006 - alleged suppression, willful misstatement on the part of the Appellant with an intent to evade service tax or not - extended period of limitation - HELD THAT - The Appellant has mainly relied upon the judgment of this tribunal passed in the matter of C.C.E. S.T. -SURAT-II VERSUS ESSAR BULK TERMINAL LIMITED 2022 (1) TMI 317 - CESTAT AHMEDABAD wherein the issue to be decided before the tribunal is that when GMB charged wharfage charges at the rate of 20% of the notified rate to M/s Essar Bulk Terminal Limited (M/s EBTL) and the same was charged on actual by M/s EBTL to M/s ESTL, the EBTL on the transaction between EBTL and ESTL required to charge the service tax on 100% of the notified rate including 80% rebate given by GMB to EBTL or on the 20% of the notified rate on which the service tax was discharged is correct or otherwise. However the said matter was decided by the tribunal on 06.01.2022 whereas impugned orders were passed on 14.12.2012, 15.10.2012 and 31.12.2015. Since the issue involved is mixed question of fact and law and in the change circumstances of the law on the issue in hand, it is opined that the matter needs reconsideration by the Learned Commissioner to decide the matter after considering the judgment of M/s Essar Bulk Terminal Ltd. and corresponding facts of the case. Matter remanded to the Adjudicating authority for fresh consideration after granting reasonable opportunity of hearing to both sides and after taking into account the decision of the tribunal in the case M/s Essar Bulk Terminal Ltd. - appeal allowed by way of remand.

Summary

Issues involved:
The issues involved in this case are related to the proper determination of Service tax liability on the rebate/concession granted by the Appellant, the interpretation of Section 67 of the Finance Act, 1994, and the applicability of Rule 3(a) of Service tax (Determination of Value) Rules, 2006.

Issue 1: Service tax liability on rebate/concession granted by the Appellant
The appellant, engaged in providing "Port Services," was granted a license by the Gujarat Maritime Board (GMB) to operate a captive jetty for handling cargos. The GMB granted a concession of 80% on Wharfage Charges for captive cargo, which was constructed by another entity and later handed over to the appellant. The GMB charged Wharfage Charges at 20% of the notified rate on captive cargo, and the appellant collected and paid service tax on 20% of the notified rate. However, show cause notices were issued alleging non-inclusion of the rebate in the taxable value. The Adjudicating authority confirmed the demand of service tax, interest, and penalties. The appellant contended that they discharged their service tax liability correctly based on the amount collected and that no tax can be demanded on the 80% portion not collected.

Issue 2: Interpretation of Section 67 of the Finance Act, 1994
The appellant argued that as per Section 67, Service tax should be on the "Gross Amount Charged," and they correctly discharged their service tax liability. They maintained that if something is not charged, it should not form part of the taxable service value. The appellant asserted that Rule 3(a) of Service tax (Determination of Value) Rules, 2006 is not applicable as the gross amount charged is the sole consideration for the services, as per Section 67.

Decision:
The Tribunal, after considering the arguments from both sides, noted that the issue involved a mixed question of fact and law. They referred to a previous judgment involving a similar issue and remanded the matter to the Adjudicating authority for fresh consideration. The Tribunal directed the reconsideration of the matter in light of the previous judgment and the corresponding facts of the case, keeping all issues open. The appeals were allowed by way of remand to the adjudicating authority for further review.