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TMI Blog2017 (5) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... Port Services is not sustainable and hence is set aside. Valuation - CHA services - abatement claimed of 85% - Board Circular No. B43/1/97-TRU dated 06.06.1997 - Revenue has been taken that the benefit of the 1997 Circular will not be allowable to the appellant, since, the appellant is showing the items separately - Held that: - It is not in dispute that the contracts of the appellant with their clients is on lumpsum basis and Service Tax already stands discharged on 15% of the consideration received in terms of the 1997 Circular - the Agency Commission actually attributable to the CHA services will be far lesser than the 15% already consider for payment of service tax - the demand of Service Tax made by considering the entire amount received from the client is without basis and hence merits to be set aside. Appeal allowed - decided in favor of appellant. - Appeal No. ST/376/2009-ST [DB] - Final Order No. 20401 / 2017-CU[DB] - Dated:- 24-3-2017 - Shri S.S. Garg, Member (Judicial) And Shri V. Padmanabhan, Member (Technical) Sh. Thirumalai, Advocate for the Appellant Sh. J. Harish, DR for the Respondent ORDER Per V. Padmanabhan The appeal is directed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be extended to the appellant, since, the appellant is not charging its client on a lumpsum basis but by individually listing out all the various charges. The ld. Commissioner in the impugned order has referred to the Circular No. 119/13/2009-ST dated 21.12.2009 and has held that since the payments received by the appellant were not as lumpsum, the benefit of 85% abatement cannot be extended to the appellant. 3. In the impugned order, the following amounts have been confirmed: i. An amount of ₹ 1,58,12,232/-, has been demanded being the service tax short paid for the services as CHA and Education Cess of ₹ 1,42,057/-; ii. An amount of ₹ 2,30,08,371/- being service tax on Port Services and Education Cess of ₹ 3,11,158/-. iii. Penalty of ₹ 3,92,73,818/- under Section 78 of the Finance Act, 1994 in addition to penalty under Sections 76 77 of the Act. 4. Aggrieved by the above order, the present appeal has been filed. 5. With the above background, we heard Shri Thirumalai, Ld. Advocate for the appellant as well as Shri J. Harish, ld. DR for the respondent. 6. It is the submission of the ld. Counsel for the appellant that the various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, he supported the impugned order. 10. Heard both sides and perused the records. 11. First, we consider the demand of service tax made in the category of port services. The appellant undertakes various activities within the Cochin Port, which include activities of stevedoring handling shipments of coal, fertilizer packing and re-packing of the goods within the port area etc. The issue relates to classification of services rendered by the appellant, which Revenue seeks to bring under Port services with consequent demand of differential duty. The contention of the appellant is that they are rendering services as CHA and paying Service Tax under that category. They have been permitted by the Cochin Port to provide various services within the port. The contention of Revenue is that all such services rendered by the appellant within the port are to treat as Port Services . The contention of the appellant is that the license issued to the appellant by the port authority to carry out service inside the port cannot be considered as authorization by port. The definition of port services under Section 65(82), the same is reproduced below: Port Service means any service rendere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasoning s, on the merits of the case whether all the services rendered by the appellants would fall under the category of Port Services or not, we hold that the services rendered by the appellants would not fall under the category of Port Services . As the impugned orders are set aside on merits, there can be no case of penalty or interest in respect of this issue . 13. The above view has been reiterated in the case of HML Agencies (Supra). By following the above decisions of the Tribunal, the demand for service tax under Port Services is not sustainable and hence is set aside. 14. Next, we consider the issue of valuation. The appellant undertakes Turn Key Contracts for imports and exports for various customers, wherein a lumpsum amount is charged from the client for undertaking various services. In these cases, the lumpsum amount covers not only the Agency Commission (relatable to the CHA services) but also other expenses incurred on behalf of importer/exporter in connection with the imports and exports. 15. Service tax was imposed on Custom House Agent Services w.e.f. 15.06.1997. At the time of introduction of the service tax, Circular F.No. B43/1/97-TRU, dated 06.06 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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