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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 ..... Supply of Tangible Goods Service (SOTG). The second show-cause notice was issued on 14-10-2010 proposing recovery of approximately Rs. 6.13 crores on ports services which is nothing but supply of bunkers and under SOTG in respect of barge provided to their sister company. Further, penalties were also imposed under various sections of the Finance Act, 1994 from the appellant. 2. Synopsis of the submissions made by the ld. Counsel for the appellant, submitted in writing, is reproduced below : SYNOPSIS OF SUBMISSIONS 1. The Commissioner has confirmed demand of service tax on the amount received as barge hire receipts, water bill receipts and miscellaneous receipts for supply of barge on hire, supply of water, supply of bunker and under the category of "port service" and on the amount received from its sister concern for supplying boats/barges under the supply of tangible goods service. In the impugned order, the Commissioner has given following findings : (i) The appellant has received the consideration for "for supply of water" to the vessels. Hence, the said transaction cannot be considered as "sale of water" witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Inconsistent Approach The Commissioner is not consistent when he has held that service tax is payable on barge hire receipt under the category of port service whereas, in the same order, he has levied service tax on similar transaction with its sister concern under the category of supply of tangible goods service. (c) Supply of bunker and fuel at port are not port service. The Port Trust has merely issued license to the appellant to carry on its trade activities. The activities of the appellant under the license of the Port Trust cannot be described as activities carried out by a person authorized by the "port" or on behalf of the port. The Rules framed by the port authorities to regulate trading activities has no implication for the taxability of the transactions. 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. (d) The Subsequent amendment in the Finance Act supports appellant services are not classifiable as port service. The amendment made by the Finance Act, 2010, through which scope of port service has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod in view of the following : 1-4-2007 : Appellant has stopped the payment of service tax 4-6-2007 : Search of the appellant's premises conducted by the Department. 5-6-2007 : Statement of the Executive Director of the Appellant Documents were not served. Several documents relied upon in the show cause notice to demand service tax from the appellant have not been supplied. Non-supply of the relied upon documents along with the show cause notice amounts to violation of principle of natural justice. (k) Alleged taxable services should have been treated as cum-tax. The alleged service tax has been computed as the amounts received by the appellant should have been treated as inclusive of tax. (i) There is no justification for levy of any penalty on the appellant 3. The ld. AR submitted that appellants were paying Service Tax on bunker supplied earlier, but stopped from 1-4-2007. Thereafter, department made offence case followed by investigation against the appellants. He submits that when the port services were introduced, the Board had clarified that the port services would cover supply of bunker to the vessels also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces. It has not been explained why the appellant suddenly came to the conclusion that supply of water is not covered by port services on 1-4-2007, except stating that the transaction is a sale and they got legal advice. Details of legal advice and whether legal advice had taken note of Board's Circular is not clear. The question arises whether in this kind of transaction; the dominant intention is sale or service? Obviously, the fact that the water is supplied by barges to the vessels and only by nominated persons by port and invoice is containing the description "supply of water" would, in our opinion, prima facie go against the appellant. 7. We are also not convinced of the correctness of arguments advanced regarding subsequent amendment and the precedent decision cited. 8. As regards supply of launches or boats to the customer which in this case happens to be only their sister concern and that too without agreement, we find that the appellant's defense is that non-payment of Sales Tax is not decisive, expenses towards fuel as per the balance-sheet is a wrong presumption. We notice that the invoice raised by the appellant gives description "supply of boats/barges for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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