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TMI Blog2016 (11) TMI 1437X X X X Extracts X X X X X X X X Extracts X X X X ..... nsignor as well as the consignee in the transport is only ONGC and therefore, ONGC alone is liable to pay service tax if payable. Thus the Tribunal decided the nature of transaction only to conclude whether the claimant is liable to pay as per the terms of the contract and it has not gone into the question whether transaction under the contract is amenable for service tax or not. Appeal dismissed - decided against appellant. - O.S.A. No. 182 of 2015 and C.M.P. No. 203 of 2016 - - - Dated:- 15-11-2016 - A. Selvam and P. Kalaiyarasan, JJ. Shri A. Abdul Hameed for M/s. AAV Partners, for the Appellant. Shri P.B. Sampath Kumar, for the Respondent. JUDGMENT [Judgment per : P. Kalaiyarasan, J.]. - This Original Side Appeal is directed against the order of the learned single Judge, dated 20-3-2015 in O.P. No. 427 of 2011, dismissing the O.P., by confirming the Arbitration Award. 2. The brief facts of the case are as follows : (i) The claimant is a registered partnership firm of Civil Engineers and contractors and as owner of tankers, it is also engaged in the activity of hiring of tankers for transport of effluent water, crude oil, etc. Oil Natural Gas Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch a power by the contract. The statutory authorities constituted under the Finance Act, 1994 already concluded that the services rendered by the claimant to the appellant /ONGC would amount to GTA and as such amenable to service tax. The Arbitral Tribunal concluded that the services rendered would amount to Charter Hire, which is not only contrary to the decision made by the statutory authorities but also overlooking the Clause 23 of the bid. The Tribunal also failed to appreciate the Indemnity Bond, dated 22-1-2007 executed by the claimant by which the claimant company had unequivocally agreed to pay/indemnify and keep indemnified the appellant, if any claim/demand is made by the Service Tax Department. 5. The learned counsel appearing for the first respondent per contra contends that Arbitral Tribunal, after analysing the terms of the contract between the parties has rightly concluded that the claimant is entitled for the refund of the amount deducted by the ONGC from the bills of the claimant towards service tax and there is absolutely no ground to interfere with the Award passed by the Tribunal by the Court under Section 34 of the Arbitration and Conciliation Act, 1996. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount the usages of the trade applicable to the transaction. This last contravention must be understood with a caveat. An Arbitral Tribunal must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground. Construction of the terms of a contract is primarily for an arbitrator to decide unless the arbitrator construes the contract in such a way that it could be said to be something that no fair minded or reasonable person could do. 43. In McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181, (2006) 11 SCC 181, this Court held as under : 112. It is trite that the terms of the contract can be express or implied. The conduct of the parties would also be a relevant factor in the matter of construction of a contract. The construction of the contract agreement is within the jurisdiction of the arbitrators having regard to the wide nature, scope and ambit of the arbitration agreement and they cannot be said to have misdirected themselves in passing the award by taking into consideration the conduct of the parties. It is also t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed hired payments received by the contractor under this contract will be to the account of ONGC. Service tax if any applicable and/or levied on charter hire payment against this contract/agreement will be reimbursed by ONGC a actual against documentary evidence. (ii) The Finance Act, 1994, Section 65(23) and 65(50b) provides the following definitions : 65(23) Cargo handling service means loading, unloading, packing or unpacking of cargo and includes - (a) cargo handling services provided for freight in special containers or for non-containerised freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport and cargo handling service incidental to freight; and (b) service of packing together with transportation of cargo or goods, with or without one or more of other services like loading, unloading, unpacking, but does not include, handling of export cargo or passenger baggage or mere transportation of goods. 65(50b) goods transport agency means any person who provides service in relation to transport of goods by road and issue consignment note, by whatever name called. 11. Clause 21 of the contract pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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