2023 (9) TMI 1097 - AT - Service Tax

Recovery of Service tax - renting of immovable property service or port service - amounts from the various ship breakers to whom plots alloted at Alang for the purpose of ship breaking - period 2007-08, 2008-09 and 2009-10 - time limitation - suppression of facts or not - HELD THAT - The appellant had a view that the collection made under the head of user development fee is not in respect of any service and the said amount collected by them is not liable to payment of service tax. Their views were clearly communicated to the office of DGCEI and no show cause notice under the said head was issued by the office of DGCEI to the appellant. In this background, issuance of show cause notice on 10.04.2013 demanding service tax on this very amount of user development fee is clearly barred by limitation. There was no suppression or intention to evade payment of duty as the appellant had clearly disclosed the fact regarding collection of said user development fee as well as their views about non-taxability of the same to the department way back in 29.12.2009. Similar view has been held by Tribunal in the appellant s own case PORT OFFICER, GUJARAT MARITIME BOARD, JAFRABAD VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, BHAVNAGAR 2014 (7) TMI 972 - CESTAT AHMEDABAD , where it was held that The said Section 22A specifically states that any amount provided by Gujarat Maritime Board, the appellant herein, is a State levy and a statutory levy and proceeds of such levy are credited to the Consolidated Treasury Fund of State of Gujarat. If that be so, any amount collected after 1-4-2008 by Gujarat Maritime Board, can be considered as statutory levy only and Service Tax liability thereon may not arise. There are no merit in the impugned order - appeal allowed.

Summary

Issues:
The appeal involves the demand of service tax by Gujarat Maritime Board in relation to amounts recovered from ship breakers at Alang Ship Breaking Yard.

Summary:

Issue 1: Demand of service tax on various charges
The appellant, Gujarat Maritime Board, recovered amounts from ship breakers for different charges like Land lease Rental, Plot Developmental Charges, Plot Rent, Shipping Breaking charges, Shore Assistant Charges, and Water & Electricity Charges. The demand for service tax was confirmed only for plot development charges, despite earlier dropped show cause notices for rent collected. The issue of full disclosure made by the appellant before the demand was raised was raised, arguing that the demand is barred by limitation.

Issue 2: Validity of demand under 'Port Service'
The demand under 'Port Service' for user development fee was contested by the appellant, arguing that it is a levy by the Government of Gujarat and not for services provided to ship breakers. The appellant's views on non-taxability of the fee were communicated to the department earlier. The Tribunal's decision in the appellant's case and the Supreme Court's affirmation were cited to support the argument against the demand.

Issue 3: Limitation and nature of services provided
The show cause notice issued in 2013 for service tax on user development fee was deemed barred by limitation as the appellant had disclosed the fee collection and their views on non-taxability in 2009. The appellant's assertion that no specific services were provided in connection to the fee collected was upheld, considering it as a statutory levy by the Government of Gujarat.

In conclusion, the Tribunal found no merit in the impugned order and set it aside, allowing the appeal against the demand of service tax by Gujarat Maritime Board.