Service tax liability follows the actual service provider, not a separate legally distinct entity with only administrative involvement.

Service tax liability attaches to the entity that actually renders or is legally responsible for the taxable service, not to a separately constituted body with only an administrative connection. Because the fisheries harbour activity was carried on by a distinct legal entity under the Ministry of Agriculture, and the port trust acted only on its behalf, the demand could not be fastened on the port trust. The earlier dropping of the demand was therefore sustained and the Revenue challenge failed.

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Issues: Whether the service tax demand in respect of services rendered at the fishing harbour was recoverable from the port trust or from the separate legal entity administering the fisheries harbour.

Analysis: The service-rendering activity was found to be carried on by Cochin Fisheries Harbour, which was a distinct legal entity constituted under the Ministry of Agriculture. Any role of the port trust in the activity was only on behalf of that separate entity. The demand, therefore, could not be fastened on the port trust. The earlier order dropping the demand was also supported by the view that the services in question were not shown to be taxable against the port trust in the manner alleged by Revenue.

Conclusion: The demand of service tax was not sustainable against the port trust, and the Revenue appeal failed.

Final Conclusion: The order dropping the service tax demand was sustained, and the Revenue's appeals stood rejected.

Ratio Decidendi: Service tax liability must be fastened on the entity that actually renders or is legally responsible for the taxable service, and it cannot be imposed on a distinct legal entity merely because it is administratively connected with the activity.

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