Port service classification for terminal handling charges supported waiver of pre-deposit at the stay stage.

Terminal handling charges were treated, at the prima facie stage, as falling within port service on the basis that services rendered at a port are covered by that category. The earlier refund granted under Notification No. 41/2007-S.T. had been reversed because terminal handling charges were viewed as specifically notified only from 7 July 2009, but the Larger Bench view supported interim treatment of such charges as port services. On that footing, the refund claim was considered sustainable for stay purposes and waiver of pre-deposit was granted.

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Issues: Whether the appellant was entitled, at the stay stage, to waiver of pre-deposit of service tax on the footing that terminal handling charges were covered by port services and refundable under Notification No. 41/2007-S.T.

Analysis: The refund had earlier been granted under Notification No. 41/2007-S.T., but was reversed on the view that terminal handling charges were specifically notified only from 7 July 2009. At the prima facie stage, reliance was placed on the Larger Bench view that any service rendered at the port falls within port service. On that basis, terminal handling charges were treated as falling within the port service category, making the refund claim sustainable for the purpose of interim relief.

Conclusion: The appellant was held entitled to waiver of pre-deposit and the stay petition was allowed.

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