Port Service classification fails for independent stevedoring; export cargo handling remains outside Service Tax levy.

A stevedoring operator holding only a loading and unloading licence, and rendering services directly to clients rather than on behalf of the port, was not providing "Port Service" under section 42 of the Major Port Trust Act framework. The activity was instead treated as "Cargo Handling Service", but export cargo was excluded from taxability under that head. Accordingly, the services were not liable to Service Tax as Port Service, and no tax was payable on the export cargo handling activity.

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Issues: Whether the services rendered by the assessee for loading export cargo within the port premises were classifiable as "Port Service" and, if not, whether the assessee was liable to Service Tax or entitled to refund.

Analysis: The assessee held only a stevedoring licence, which permitted it to carry out loading and unloading operations within the port premises. Section 42 of the Major Port Trust Act, 1963 contemplates that a port may itself render specified services or authorize another person to do so on its behalf, but the assessee's activities were found to be rendered directly to its clients and not on behalf of the port. The letter from the Port Trust supported this position. On that basis, the service was held not to be "Port Service". It was instead treated as "Cargo Handling Service"; however, export cargo was excluded from taxability under that category.

Conclusion: The assessee's services were not taxable as "Port Service" and, as the work related only to export cargo, no Service Tax was payable even under "Cargo Handling Service".

Ratio Decidendi: A service rendered by an independent stevedoring operator directly to clients, and not on behalf of the port or as an authorized agent of the port, is not "Port Service"; where such service concerns export cargo excluded from the levy under cargo handling, no Service Tax is payable.

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