2014 (6) TMI 96 - AT - Service Tax

Waiver of pre-deposit of Service Tax liability - Port services - differential Service Tax - charge for the wharfage - water lee way charges - Held that - agreement entered by GMB with various private parties in respect of minor ports in Gujarat State are similarly worded and the reduced rate of wharfage @ 20% of the normal wharfage charged by the appellant was given across the board to all the private parties who had constructed the infrastructures in the minor ports. We also note that the agreements in this case are the very same clauses as were in the agreements considered in the final order passed by this Bench on 01.08.2013 in as much as the infrastructure needs to be created by the private parties and same should be handed over to GMB on expiry of the lease agreement. The differences in the agreement and the facts as has been canvassed by the ld.Departmental Representative will not carry the case any further as in the case of M/s Dahej Harbour and Infrastructure Ltd, we find that the appellant therein was a special purpose vehicle created by private party, who constructed the infrastructure in the said minor ports. GMB is an appellant before us and the Service Tax liability which has been adjudged against them is on an identical ground as was in their own case. We are of the considered view that for the purposes of waiver of the amounts involved, the ratio laid down by the Bench in their own case will apply. We also record that the reasoning adopted by this Bench for directing pre-deposit in the case of M/s Dahej Harbour and Infrastructure Ltd may not apply in the case in hand as in the appellants (GMB) own case we have held on an identical issue in their favour. appellant has made out a prima facie case for waiver of pre-deposit of the amounts involved - Stay granted.

Summary

Issues:
Waiver of pre-deposit of Service Tax liability, interest, and penalties imposed.

Analysis:
The appellant filed two Stay Petitions seeking waiver of pre-deposit of Service Tax liability, interest, and penalties confirmed by the adjudicating authority. The issue pertained to the appellant providing Port services without discharging the differential Service Tax liability for the period 2006-2007 to 2010-2011 at Ports in Mandvi and Jamnagar. The Stay Petitions were disposed of together due to the same assessee being involved in both cases.

The appellant's Chartered Accountant argued that the Revenue's case was based on the appellant's agreement for construction of infrastructure at the Ports of Mandvi and Jamnagar, where they charged only 20% of regular fees for services without short-paying Service Tax. The appellant contended that the agreements with private companies were similar and cited a Tribunal judgment favoring them. The Revenue countered, highlighting differences in agreements and asserting that the appellant did not grant exclusive rights for infrastructure construction, unlike in previous cases. They argued that the appellant's reduced charges were adjustments for private parties' infrastructure costs.

Upon reviewing submissions and records, the Tribunal identified the key issue as the appellant's failure to discharge differential Service Tax on various charges. The Tribunal noted similarities in agreements with private parties for minor ports in Gujarat, emphasizing reduced wharfage rates and infrastructure creation obligations. Drawing parallels with a previous order in the appellant's favor, the Tribunal found the Revenue's arguments insufficient to sway the case. The Tribunal differentiated the appellant's situation from a previous case involving a special purpose vehicle, concluding that the appellant had a prima facie case for waiver of pre-deposit.

In the final judgment pronounced on 01.05.2014, the Tribunal granted the appellant's application for waiver of pre-deposit and stayed recovery of the amounts pending appeal disposal. The decision was based on the appellant's demonstrated prima facie case and the Tribunal's previous ruling in their favor on a similar issue.