Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2009 (5) TMI 60

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... tricted to the Service Tax paid through M/s. VPT and M/s. DLB – Held that - the impugned orders do not have any merit. They are liable to be set aside – the activities are not taxable under port service.
Shri T.K. Jayaraman, Member (Technical) and Shri M.V. Ravindran, Member (Judicial) (Final Order Nos. 539-542/2009 dt. 1.5.2009 certified on 21.5.2009 in Appeal Nos. ST/330,331,318 and 348/2007) Shri V. Ravindranath, Adv. for Party Shri V. Poorna Chandra Rao, SDR for Department Per T.K. Jayaraman : Both the assessee and the revenue have filed appeals against the following Orders-in-Original. The details are given below. The assessee have also filed their cross objection. Order-in-Original Service Tax on Port Services Service Tax on CHA Education Cess No.2/2007-08 (RS) dated 3.5.2007 Rs.60,17,953/- Rs.22,630/- Rs.31,391/- No.1/2007-08 (RS) dated 3.5.2007 Rs.11,53,38,577/- - Rs.7,40,874 2. We heard both sides. 3. The appellants M/s. South India Corporation (Agencies Ltd.), Chennai are providing clearing and forwarding and stevedoring services. They had entered into contract with the following parties. (i) M/s. Vikram Ispat (ii) M/s. Ispat Industries (iii) M/ .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... . and Sons (Agencies) Pvt. Ltd. Vs. CCE, Bhavnagar - 2007 (82) RLT 678 (CESTAT-Ahmd.) = 2007 (8) STR 236 (Tri.-Ahmedabad) wherein it has been clearly held that the activities of handling stevedoring, loading, unloading, tug hire and labour arrangement do not fall under the category of "Port Services". Such services not being required by the port, any authorization by ports cannot covert the services into port services. In the said decision, the Tribunal distinguished between licence and authorization. Licences issued by ports to various agencies under Section 123 should not be confused with authorization issued under Section 42 of the Major Port Trust Act. It was also clarified in the said decision that licence means a permission given for specific purpose. Licence holder should not be interpreted as having powers and authority of the person issuing the licence, unless the licence specifically mentions about it. Authorization may be issued by way of licence but not all licences are authorizations. (iii) Assuming but not accepting that the appellants are persons authorized by the port, the demand is hit by bar of limitation. The Commissioner has not considered the case laws cited b .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ri.-Bang.) 7. The learned SDR invited our attention to the following decisions which are against the appellants. (i) SICAL Vs. CST, Chennai - 2008-017-STT-0114 (Chennai-CESTAT) wherein the Chennai Bench held that all services otherwise taxable would qualify to be 'Port Services' when rendered within territorial limits of a port. In fact in the said decision, the Chennai Bench had not agreed with the other decisions in favour of the assessee, therefore, the matter has been referred to Larger Bench. (ii) Further, he relied on the following decisions: a. Bhoruka Steel Ltd. Vs. CST, Chennai - 2007 (7) STR 555 (Tri.-Chennai); and b. Western Agencies (Madras) Pvt. Ltd. Vs. CST, Chennai - 2007 (8) STR 522 (Tri.-Chennai). In view of the above judgments, he prayed that the demands may be confirmed. 8. We have gone through the records of the case carefully. It is seen that in terms of the contract entered by the appellants with the parties mentioned above, they were required to undertake generally the following activities. Handling and stevedoring; unloading of material, loading and shifting cargo from the designated plot to the vessel; liasioning; unloading of imported manganese ore .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... cted to the Service Tax paid through M/s. VPT and DLB. According to her, the stevedoring licence issued to the appellant falls squarely under Section 42 (3A). The assessee is functioning inside the port area, providing the services which the port is empowered to, under licence issued by the port and for them to argue that they are not authorized under the Act for providing the services is simply a feeble attempt to dissolve the matter and not accepted. 8.3 The appellants' plea of time bar has also not been accepted by the learned Commissioner. The appellants submitted to the Commissioner that the allegation of suppression is untenable for the reason that the bills raised by M/s. VPT and M/s. DLB who have been registered by the department since introduction of Service Tax on 'Port Services' contain the particulars of the appellants. This submission was also not accepted by the Commissioner. 8.4 In the order, she has explained the term stevedoring and came to the conclusion that the assessee are liable to pay Service Tax on the stevedoring activity undertaken by them within the port area. She has given allowance for the Service Tax already paid by the port and which has been collec .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... are reproduced below: "6. We have gone through the records of the case carefully. The point at issue is whether the services rendered by the appellants amount to "Port Services" and whether they are liable to pay Service Tax in terms of the Finance Act, 1994. We find that the appellants obtained the stevedoring license from the Mangalore Port Trust for carrying out the stevedoring operations. The stevedoring operations actually mean loading and unloading of cargo within the port premises. The Commissioner has interpreted that the appellant is carrying out the services within the port and he has been authorized by the port to render such services in view of the licence given to him. Therefore, he would rightly fall within the ambit of the "Port Services". However, when we examined the issue in terms of Section 42 of the Major Port Trust Act, we find that in terms of that Section, the major port is supposed to carry out a number of activities and there is provision in terms of the said section for the port to authorize any other person to render such services after taking prior approval of the Central Government. In the present case, the appellants strongly contend that the services .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... had not withheld any information to the department. Under these circumstances, longer period also could not have been invoked. 9.2 Moreover, for the period prior to 16.8.2002 even though the appellants had paid Service Tax on the input services rendered to them by the M/s. VPT and M/s. DLB, no allowance had been given. This is also incorrect on the part of the Commissioner. 9.3 In view of the above observations, the impugned orders do not have any merit. They are liable to be set aside. Hence, we set aside the impugned orders and allow the assessee's appeals with consequential relief. Revenue's appeals - ST/318 & 348/2007 10. Revenue has filed against the impugned orders on the following grounds. (i) It appears that the Commissioner has erred in holding that since the Port has already paid the taxes on Haulage and Wharfage during 2004-05 amounting to Rs 4,55,498/- for which the assessee has billed his client at actuals, the same should be excluded from the instant demand contending that the charges once taxed, cannot be taxed a second time, because she has allowed credit of Service Tax paid by the Port and DLB (to the tune of Rs.37,09,474/-) holding that the services rendered .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates