Export cargo handling excluded from service tax despite port premises and stevedoring licence, statutory exclusion governs taxation.

Handling of export cargo is outside the charge of service tax where the statutory definition of cargo handling service expressly excludes export cargo. Although the activity was performed within port premises and under a stevedoring licence, the decisive factor was the nature of the service actually rendered, not the location or licence alone. The definition of port service did not override that exclusion, and the cited circular also recognised that goods meant for export are excluded from levy. The handling of export cargo was therefore not taxable as either cargo handling service or port service.

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Issues: Whether the assessee's activity of handling/loading export cargo within the port area was taxable as "port service" or "cargo handling service", and whether service tax could be levied on handling of export cargo.

Analysis: Section 42 of the Major Port Trust Act, 1963 permits a port to undertake specified services itself and also authorise other persons to perform such services. The assessee held a stevedoring licence, but the decisive question was the nature of the service actually rendered. The statutory definition of "cargo handling service" in Section 65(23) of the Finance Act, 1994 expressly excludes handling of export cargo. The definition of "port service" in Section 65(82) of the Finance Act, 1994 was also considered, but the Court found that the exclusion relating to export cargo governed the controversy. The circular dated 1-8-2002 did not assist the Revenue because it also stated that goods meant for export are excluded from levy.

Conclusion: The assessee's activity was not liable to service tax as the handling was of export cargo, and the Revenue's contention that the service was taxable as port service was rejected.

Ratio Decidendi: Where the service rendered consists of handling export cargo, the express statutory exclusion in the definition of cargo handling service prevents levy of service tax, notwithstanding that the activity occurs within port premises or under a port-related licence.

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