2019 (5) TMI 160 - AT - Service Tax

Tribunal ruling: Appellant wins on freight services, loses on tax for supplying foreman.

M/s C. Raja & Co. Versus C.C.E. & S.T. Surat-i

M/s C. Raja & Co. Versus C.C.E. & S.T. Surat-i - TMI Issues involved:Classification of services provided by the appellant under different categories for taxation, including freight on barges, salary of floating crane operator, management and allied services, and salary paid to Foreman/Khalasi.Freight on Barges:The appellant argued that the transportation services provided are not taxable under the category of port service, citing previous tribunal decisions and Supreme Court rulings to support their claim. They emphasized that the services provided were not authorized by the port and should not be classified as port services. The appellant relied on various cases to strengthen their argument, asserting that the demand under port services should be set aside due to lack of specific authorization from the port.Salary of Floating Crane Operator:The appellant contended that they were not authorized by the port for the services provided, and therefore, should not be subjected to demands under port services. They highlighted an agreement with Essar Shipping Ltd. to support their claim that the services rendered were related to manpower supply and not port services. The appellant relied on the decision in Velji P & Sons (Agencies) P. Ltd. to argue that without authorization from the port, the service should not be classified as a port service.Management and Allied Services:Regarding the services of stevedoring provided by the appellant, it was argued that since they were not authorized by the port, the services should not be taxable under the category of port services. The appellant relied on previous tribunal decisions to support their stance, emphasizing the lack of authorization as a key factor in determining the taxability of the services provided.Salary Paid to Foreman/Khalasi:The appellant defended the supply of foreman/khalasi to Essar Steel Ltd., stating that they were not primarily engaged in manpower recruitment and supply agency services. They referred to a tribunal decision and its affirmation by the Gujarat High Court to support their argument. The appellant also challenged the invocation of the extended period of limitation, claiming that there was no intention to evade tax, and if relief was granted, the entire demand would be barred by limitation.Judgment Analysis:The Tribunal analyzed each service category separately, considering the arguments presented by both parties. For services like freight on barges and salary of floating crane operator, the Tribunal ruled in favor of the appellant, citing the lack of specific authorization from the port as a crucial factor in determining tax liability under port services. However, for the service of supplying foreman/khalasi, the Tribunal found the appellant liable for tax due to clear manpower supply and no ambiguity in the law, upholding the demand under this category. The Tribunal also confirmed the invocation of the extended period of limitation in this regard, partially allowing the appeal.The judgment emphasized the importance of specific authorization from the port for services to be classified under port services for taxation purposes. It also highlighted the significance of clear legal distinctions between entities in determining tax liability for services provided. The decision provided a detailed analysis of each service category based on legal precedents and interpretations, ensuring a comprehensive review of the issues involved.