Cargo Handling Service classification prevails for port-related activities; reimbursable statutory expenses excluded from taxable value.

Services performed within a port were examined for classification under service tax law. The respondent was registered as a Cargo Handling Service provider and there was no evidence of registration with port authorities for Port Service. Applying the relevant Board circular, only gross service charges were treated as taxable, while reimbursable statutory payments and expenses were excluded from value. On the facts recorded by the first appellate authority, the activity remained Cargo Handling Service and did not require reclassification as Port Service, so tax liability was correctly discharged under Cargo Handling Service.

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Issues: Whether the services rendered by the respondent within the port were liable to be classified and taxed as Port Service instead of Cargo Handling Service.

Analysis: The respondent was registered as a Cargo Handling Service provider, and there was no evidence that it was registered with the port authorities for rendering Port Service. The relevant Board circular clarified that, for analogous taxable service situations, only the gross service charges are liable to tax and reimbursable statutory payments and expenses are not to be included in the taxable value. On the facts found by the first appellate authority, the respondent's activities remained within the ambit of Cargo Handling Service and did not warrant reclassification as Port Service.

Conclusion: The classification adopted by the respondent was correct and the service tax liability was rightly discharged under Cargo Handling Service, not Port Service.

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