Pre-amendment port services were not taxable for work done within port premises before the statutory expansion took effect.

Services performed within a port area were not taxable as port services for the period before 1.7.2010 because the pre-amendment definition covered only services rendered by a port or by a person authorised by the port in relation to a vessel or goods. The Tribunal found that the appellant acted under its own commercial arrangements and did not perform the services in the statutory character required under the earlier law. The Finance Act, 2010 expansion of port services to cover services rendered within a port was held to operate prospectively. The service tax demand, together with interest and penalties, was therefore unsustainable.

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Issues: Whether the services rendered by the appellant within the port area during the relevant period, prior to 1.7.2010, were liable to service tax as port services, and whether the consequential demand of interest and penalties could survive.

Analysis: The applicable pre-amendment definition of port services under Section 65(82) of the Finance Act, 1994 covered only services rendered by a port or by a person authorised by the port in relation to a vessel or goods. The Tribunal held that, on the facts, the appellant was rendering services in the port area under its own commercial arrangements and not as the port itself or as a person authorised to perform port services in the statutory sense. The later amendment made by the Finance Act, 2010, which broadened the scope of port services to services rendered within a port, was held to be prospective and effective only from 1.7.2010. The Tribunal relied on prior precedent to conclude that mere performance of services within port premises, without the necessary pre-amendment statutory character, could not be reclassified as port services for the earlier period.

Conclusion: The services were not taxable as port services for the relevant period prior to 1.7.2010. The demand of service tax, along with the associated interest and penalties, was unsustainable.

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