2015 (9) TMI 941 - AT - Service Tax

Demand of service tax - steamer agent services - Port services - Held that - Board has issued a circular on 26-2-2010 vide DOF No. 334/1/2010/TRU wherein it was clarified that the definition of Other Port Services are being amended to provide that all services provided within the port would fall under port service and authorization from port authority could not be a pre-condition for taxing the services. In the absence of any evidence to show that appellant had been authorized to provide the port service and in terms of the authorization, activities were undertaken by the appellant, and also in view of the specific provision in the definition relating to authorization, we consider that the impugned order taking a view that levy is sustainable cannot be upheld. We also find that the appellants operation in Bhavnagar which is limited to hiring a barge to the customer cannot be levied to tax under Port Service. Therefore, demand for Service Tax under the category of Port Service also cannot be sustained. Appellant merely identified and arranged services of licenses steamer agents Custom house agents, etc., for ship owners based in the United States from 29-3-2006 and were remitting the Service Tax treating the service rendered by them as business auxiliary service. This is because the foreign ship owners were reimbursing the expenses incurred by the appellants for identification and arranging the services and were also giving commission to the appellants on which the appellants paid Service Tax under the category of business auxiliary service. We agree with the submission that unless the appellant was actually rendering steamer agent service, there was no question of levying Service Tax under this heading. - impugned orders cannot be sustained - Decided in favour of assessee.

Summary

Issues:
1. Demand for Service Tax under cargo handling services, other port services, and steamer agent services for different periods.
2. Classification of barge operations as cargo handling services or port services.
3. Interpretation of the definition of cargo handling services and port services.
4. Applicability of Service Tax on barge operations and transportation of goods.
5. Consideration of authorization from port authorities for levying Service Tax on port services.
6. Confirmation of Service Tax under steamer agent services.

Analysis:
1. The judgment dealt with multiple appeals challenging the demand for Service Tax under various categories for different periods. The appellant, engaged in barging operations and transportation of goods, faced demands exceeding specified amounts for cargo handling services, other port services, and steamer agent services. Penalties were also imposed.

2. The classification of barge operations as cargo handling services or port services was a crucial issue. Barge operations in different locations were considered, with specific operations being categorized differently in each order under challenge. The appellant's submissions emphasized that their activities primarily involved transportation of goods and not cargo handling.

3. The interpretation of the definition of cargo handling services and port services played a significant role in determining the tax liability. The definition of cargo handling services included loading, unloading, packing, or unpacking of cargo but excluded mere transportation of goods. The judgment analyzed the appellant's activities in light of this definition.

4. The question of whether Service Tax could be levied on barge operations and transportation of goods was extensively discussed. The appellant argued that their services constituted transportation and were not covered by cargo handling services. The judgment referred to previous decisions and factual submissions to determine the tax liability in this regard.

5. The issue of authorization from port authorities for levying Service Tax on port services was raised concerning the appellant's operations in various ports. The judgment highlighted the requirement of authorization and examined whether the appellant's activities fell under the definition of port services during the relevant period.

6. The confirmation of Service Tax under steamer agent services was also challenged. The appellant's role as a steamer agent was scrutinized, and it was concluded that unless the appellant was actively rendering steamer agent services, the levy of Service Tax under this category was not justified.

In conclusion, the judgment allowed all the appeals, finding that the impugned orders could not be sustained. The detailed analysis of each issue provided clarity on the tax liabilities concerning cargo handling services, port services, transportation of goods, and steamer agent services, leading to the decision in favor of the appellant.