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TMI Blog2018 (8) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... given in the Notification. Since, in our opinion, raw sugar is a product which has undergone processing, we are of the opinion that the benefit of exemption is not extendable to raw sugar. Thus, the Cargo Handling Services in respect of handling of cargo of raw sugar would attract the levy of service tax - demand upheld. Penalties - Held that:- No positive act of suppression has been established by the Department with cogent evidence to conclude that there is suppression of fact on the part of the appellant. Apart from merely stating that the appellants did not disclose the fact of rendering of Port Services, Cargo Handling Services and Goods Transport Agency Services, there is no deliberate act with an intention to evade payment of service tax established by the Department to conclude that there is suppression of facts - the penalty imposed under Section 78 with respect to both issues (Cargo Handling and GTA Services in respect of raw sugar) cannot sustain - penalty u/s 76 upheld. Appeal allowed in part. - Appeal No. ST/00393/2010 - Final Order No. 42177 / 2018 - Dated:- 26-7-2018 - Hon ble Ms. Sulekha Beevi C.S., Member ( Judicial ) And Hon ble Shri Madhu Mohan Damodhar, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized as per the provisions of Major Port Trust Act to perform such activities as a normally performed by the Ports. In the instant case, the appellant is not authorized under the Major Port Trust Act and hence the appellant cannot be said to be authorized by the port. (v) Further, the contention of the respondent that, the stevedoring license granted to the appellant tantamount to authorization given by the port does not hold merit. The mere licence to perform stevedoring activities cannot be said to be an authorization issued by the port. (vi) The term authorized differs from the term licensed . The term license means a permission given for specific purpose wherein the service provider will be acting in his individual capacity whereas authorized means appointing a person to act on behalf of him . In the instant case, the applicant has been licensed by the Port to provide the services like stevedoring, loading and unloading, transportation, etc. The High Court of Karnataka has upheld the order of the Bangalore Bench CESTAT in the case of Konkan Marine Agencies Vs. C.C.E., Mangalore and held that loading and unloading of cargo in port under stevedoring license issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessed and hence it cannot be said to be manufactured product. III. Demand for Goods Transport Agency Service (Transportation of Raw Sugar Demand of ₹ 2,09,387/-): (i) Appellant would like to submit that with regard to Goods Transport Agency, they have paid tax on the actual amount as Freight. However, appellant also collected some excess amounts from the customers over and above the freight incurred and demand is in respect of such amount. (ii) That the appellant is not contesting the demand on this issue. IV. Invocation of extended period of limitation and imposition of penalty is not applicable if the demand is due to interpretation of exemption notification : (i) Appellant would like to submit that in the present case, they are under the bona fide belief that raw sugar is eligible for exemption since it is an agricultural produce. Further, mentioning of Jaggery in the definition of Agricultural definition which is akin to raw sugar substantiated them the availability of exemption for their activity. The appellants have claimed exemption on the activity related to raw sugar under exemption Notification No. 13/2003 ST dt. 20.06.2003 as amended by Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3/2003 dt. 20.06.2003 as amended by Notification No. 08/2004-ST dt. 09.07.2004. Agricultural produce has been defined in the said Notification and it excludes manufactured products such as sugar, edible oils, etc. Therefore, it is very much clear that raw sugar, being a manufactured product, cannot be equated with agricultural produce to claim exemption. Thus, the appellants are liable to pay service tax under Cargo Handling Services in respect of handling of cargo of raw sugar. 3.4 With regard to the argument made by the Ld. Counsel on limitation , he submitted that the appellants have wrongly availed the benefit of exemption under the above stated Notifications. When they were not eligible for the exemption under the Notification, they cannot merely put forward a contention that they were under the bona fide belief that raw sugar was included within the definition of agricultural produce . The Notification is very much clear that manufactured product are excluded from the exemption. That, therefore, the contention that the demand is hit by limitation cannot be accepted as the issue is an interpretational one. 3.5 It is also submitted him that they have not disclosed to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts, of that case and the facts in these cases before us are identical wherein various services were rendered by the appellants herein within the port area. Since the ratio of the judgment of the Velji P. Sons is squarely applicable in this case, the judgment had also having been upheld by the Hon ble Apex Court, the ratio is binding on us. It is also to be noted that the judgment of the Hon ble Supreme Court in the case of Velji P. Sons seems to have been accepted by the Government of India, which can be ascertained from the fact that the Government of India in Finance Act, 2010 expanded the scope of many existing services and one of them being Port services . The expansion of definition of Port services , which has been brought into play by the Finance Act, 2010, would seeks to include all services provided entirely within airport/port premises would fall under these services i.e. Port services and there is no pre-condition of any authorisation from the port authority for taxing the services. It is also seen from the Circulars issued by the Government of India, more specifically, Circular dated 26th February, 2010, the scope of modifications or expansion of definiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Cargo Handling Services in respect of handling of cargo of raw sugar would attract the levy of service tax. 5.5 The appellant has contended that they were under the bona fide belief that raw sugar would fall within the definition of agricultural produce . We do not find this argument tenable for the simple reason that the definition is amply clear wherein the manufactured products and processed products are excluded from the definition of agricultural produce . Further, it states that the agricultural produce does not include manufactured products such as sugar. When it is stated with such clarity that sugar would not fall within the definition of agricultural produce, the appellant cannot contend that raw sugar was eligible for exemption. 5.6 With regard to the next issue relating to the demand on GTA Services in respect of raw sugar, the Ld. Counsel on 26.07.2018, when the matter came up for hearing, stated that the appellant is not contesting this issue. However, he has made an alternate plea to set aside the penalties in respect of both the issues relating to raw sugar. The Commissioner (Appeals) has set aside the penalty imposed under Section 76, but however has up ..... X X X X Extracts X X X X X X X X Extracts X X X X
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