2007 (8) TMI 35 - AT - Service Tax

Tribunal rules Customs House Agent not liable for Service tax as Port services

VELJI P. & SONS (AGENCIES) P. LTD. Versus COMMISSIONER OF C. EX., BHAVNAGAR

The Tribunal ruled in favor of the appellant, a Customs House Agent, in an appeal against the confirmation of Service tax as Port services and imposition ... Port services - Department contended that appellant activities of handling, stevedoring, loading, unloading, tug hire and labour arrangement is covered under 'Port service' and accordingly demand were made along with penalty - Held that the department contention was not correct and set aside Issues:Appeal against confirmation of Service tax as Port services and imposition of penalties.Analysis:1. The appellant, a Customs House Agent, was issued a show cause notice proposing Service tax for the period July 2003 to January 2005, alleging that the services provided by the appellant fall under 'Port Services' and are liable for tax. The Commissioner confirmed the tax demand and imposed penalties, which were challenged in the appeal.2. The appellant argued that the services rendered by them are Customs House Agent services and not Port services. They contended that the services provided, such as hiring of barges and cranes, were not required to be provided by the Port, and the licenses issued to them did not amount to authorization by the Port. The appellant relied on a previous Tribunal decision to support their claim.3. The issue of limitation was also raised by the appellant, arguing that they were duly licensed as a Customs House Agent and were paying Service tax accordingly. The appellant claimed that the revenue was aware of the facts and cannot attribute suppression to them, invoking a longer period of limitation.4. The Tribunal analyzed the scope of 'Port Services' and observed that services like handling, stevedoring, loading, and unloading provided by the appellant were not required to be provided by the Port under the Major Port Trusts Act. It was emphasized that authorization from the Port must be in respect of services the Port is required to provide, which was not the case with the appellant's services. The licenses issued to the appellant were deemed not to be authorizations.5. The Tribunal distinguished between licenses issued under different sections of the Major Port Trusts Act, highlighting that not all licenses are authorizations. It was concluded that the appellant's activities did not fall under the category of Port Services based on the law declared in a previous Tribunal case.6. Regarding limitation, it was found that there was confusion on the part of the revenue officers regarding the correct scope of the appellant's services. The Tribunal noted that the short-levy, if any, was not due to any mala fide intention on the appellant's part, and no suppression or misstatement could be attributed to them. The demand was considered barred by limitation due to the overlapping nature of the introduced services causing confusion.7. Consequently, the impugned orders were set aside, and the appeals were allowed in favor of the appellant, granting them consequential relief.(Judgment delivered by: Archana Wadhwa, Member (J))