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TMI Blog2014 (1) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... lude cost of charges of other elements. Boat/barges have been supplied as seen from invoice. Since no Sales tax has been paid and no evidence has been shown that the transaction is a transaction of right to use and was liable to sale tax, the natural conclusion would be that the transaction is supply of tangible goods for use without parting with the right of possession and control. While the appellants have made a claim that the expenses incurred by them on fuel has not been proved to be incurred for the boats and barges supplied to their sister concern, they have also not shown that they had other barges and boats and the expenses incurred were in relation to other items and not to the boats/barges supplied. In the absence of any agreement, the only document available are invoices and invoices do not support the claim of the appellant. Appellants have not made out a prima facie case in their favour. At the same time, it also cannot be said that the case against the appellant is hundred per cent against them, since the matter has to be heard in greater detail to understand the nature of transaction and interpretations that are possible on the basis of facts. In these circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot mean that it had sold the water. The appellant has provided the services in relation to the vessels. (ii) C.B.E. C. in its Circular F.No. B/11/1/2001-TRU, dated 9-7-2001 has explained that the water supply charges are taxable under the category of port of service. The appellant is liable for service tax under the category of port of service as per the decision of the Hon ble Tribunal in Western Agencies Pvt. Ltd. v. CST, 2008 (12) S.T.R. 739 (Tri.-Chennai) and Western Agencies Pvt. Ltd. v. CST, Chennai, (2011) 22 S.T.R. 305 (Tri.-LB). (iii) It cannot be held that the amount received by the appellant for bunker transportation is taxable with effect from 1-9-2009 under section 65(105)(zzzzl) of the Act which levies service tax on transportation of personnel and other goods within the port area as its services are squarely classifiable under the category of port service. (iv) The appellant has not paid sales tax on barge hire receipt and therefore its submission that it had handed over the boats and barges to the customer is not acceptable. The appellant has, shown certain expenditure towards fuel and maintenance of vessels in profit and loss account for the yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding precedent. The appellant s services are not in relation to vessel. The Commissioner has wrongly relied upon Western Agencies Pvt. Ltd. case, which has been stayed by the Hon ble High Court in Western Agencies Pvt. Ltd. v. Commissioner, 2011 (24) S.T.R. J50 (Mad.). Conclusion of the Larger Bench of this Hon ble Tribunal in Western Agencies Pvt. Ltd. case is contrary to the decision of the Hon ble High Court in CCE v. Konkan Marine Agencies, 2009 (13) S.T.R. 7 (Kar.) which is binding precedent. Hence, the appellant s activities are not classifiable under the category of port service as these services are not supposed to be carried out by the port. (f) Non-payment of sales tax on a transaction is not decisive to determine the nature of transaction, whether sale or service. The Commissioner has held that the appellant has not handed over possession and effective control over the launches/boats to its customers merely because sale tax has not been paid. He failed to understand that non-payment of sales tax on a transaction is not decisive to determine the nature of transaction. (g) Wrong presumption about certain expenses made towards fuel expenses Furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in absence of any written agreement and in view of the fact that the appellants have shown expenses on fuel and maintenance etc. of barges, the obvious conclusion that emerges would be that the barge has been supplied to the sister concern by retaining the possession and control and allowing the sister concern to use the barge. 4. We have considered the submissions made by both the sides. 5. As regards bunker, it is the submission of the appellant that, in fact, they were selling water and other ship stores to the vessels and, therefore, it is simple transaction of sale and does not include the component of service. It is his submission that because of this reason, the appellant stopped payment of Service Tax. 6. We find that as regards port service, it means any service provided by a port or any person authorized by the port in relation to port service in any manner. Port service means, any service rendered in a port in relation to vessels or goods . In this case, there is no doubt that supply of bunkers is in relation to vessels. The question that arises is whether it can be considered as a sale only. In this case, it is not permissible for any one to supply water or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action as lease/hire/renting etc. Transactions where hiring/leasing were involved attract sales tax or VAT in many States. However, in the circular issued by the Board when service of tangible goods was introduced, the Board has clarified on 29-2-2008 that transfer of right to use any goods is liable to Service Tax/VAT as deemed sale and it involves transfer of both possession and control of the goods to the user. Further, allowing another person to use the goods without giving legal right or possession and effective control is treated as service. In this case what is evident is that the boat/barges have been supplied as seen from invoice. Since no Sales tax has been paid and no evidence has been shown that the transaction is a transaction of right to use and was liable to sale tax, the natural conclusion would be that the transaction is supply of tangible goods for use without parting with the right of possession and control. While the appellants have made a claim that the expenses incurred by them on fuel has not been proved to be incurred for the boats and barges supplied to their sister concern, they have also not shown that they had other barges and boats and the expenses incu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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