Port services taxability depends on statutory authorisation; absence of authorisation justified complete pre-deposit waiver and stay.

Pilotage charges for services facilitating loading of crude oil at a port were treated as port services only where the activity was undertaken under authorization issued under Section 42(3) of the Major Port Trusts Act, 1963. Because the record showed no such authorization and the charges were not fixed by the Government of India, the classification as taxable port services was held prima facie unsustainable. The adjudged demand and penalties were therefore regarded as prima facie not in accordance with law, and complete waiver of pre-deposit with stay of recovery was granted pending appeal.

---

---

Issues: Whether the appellants were entitled to complete waiver of pre-deposit and stay of recovery on the ground that the services rendered at the port were not taxable as port services in the absence of authorization under the governing port law.

Analysis: The demand related to pilotage charges recovered for services used to facilitate loading of crude oil at Ravva Port. The services were held to be taxable as port services only if undertaken on authorization issued under Section 42(3) of the Major Port Trusts Act, 1963. The record showed that the appellants had not carried out the activities under such authorization. The charges were also not fixed by the Government of India. On this basis, the impugned classification as port services was found to be prima facie unsustainable, and the adjudged demand and penalties were treated as prima facie not in accordance with law.

Conclusion: Complete waiver of pre-deposit was granted and recovery of the adjudged dues was stayed pending disposal of the appeal, in favour of the assessee.

Ratio Decidendi: For taxable port services rendered by a person other than the port itself, authorization under the relevant port law is a prerequisite, and absence of such authorization renders the levy unsustainable at least on a prima facie basis for pre-deposit relief.

---