Tug services contract classified as 'Supply of Tangible Goods Service', not VAT sale.

The CESTAT held that the contract between the appellant and MPT for providing tug services for berthing and unberthing vessels was classifiable as 'Supply of Tangible Goods Service' u/s 65(105)(zzzzj) and not as a deemed sale liable to VAT. The taxable event for Service Tax was the receipt of payments after introduction of the service from 01.03.2008, irrespective of the contract signing date. However, the extended period of limitation and penalty were set aside due to the appellant's bona fide belief based on VAT authorities' clarification, despite the complex classification issue. The matter was remanded for reconsideration in light of these findings. .....

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