TaxTMI 
TaxTMI 
2010 (10) TMI 321
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....2008 Mr. V. Naveen Babu Rai, Accountant, M/s. Sri Ganesh Shipping Agency v. CCE, Mangalore Rs. 1,000 as penalty u/s 77 4. ST/442/2008 M/s. Alvares & Thomas v. CCE, Mangalore Rs. 11,97,98,260 as Service Tax incl. Edu. Rs. 200 per day u/s 76 Rs. 1000 u/s 77 Rs. 11,97,98,260 u/s 78 Rs. 2000 u/s 70 5. ST/460/2008 M/s. Export Tradelink Agencies v. CCE, Mangalore Rs. 2,24,83,059 as Service Tax a/w interest Rs. 2,24,83,059 as penalty u/s 78 Rs. 2,000 as penalty u/s 70 Rs. 1,000 as penalty u/s 77 Penalty u/ss 75 & 76 not quanti- fied 6. ST/495/2008 M/s. Hasan Haji & Co. Rs. 1,46,48,558 as Service Tax and Rs. 2,92,975 Rs. 2,000 as penalty u/r 15 of CCR, 2004 7. ST/78/2009 M/s. Sri Ganesh Shipping Agency v. CCE, Mangalore Rs. 97,80,323 as Service Tax incl. Edu. Services a/w/ interest Rs. 200 per day not exceeding Rs. 97,80,323 as penalty u/s 76 Rs. 1,000 as penalty u/s 77 Rs. 97,80,323 as penalty u/s 78 8. ST/84/2009 M/s. Hasan Haji & Co. v. CCE, Mangalore Rs. 86,09,295 as Service Tax & Rs. 1,72,186 as Edu. Cess Rs. 2,000 as penalty u/r 15 of CCR, 2004 9. ST/85/2009 M/s. Aspinwal....
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....s case. They also submitted before the adjudicating authority that the judgment of the Tribunal in the case of Konkan Marine Agencies (supra) was upheld by the Hon'ble High Court of Karnataka in CCE v. Konkan Marine Agencies [2009] 18 STT 115 and the facts involved being the same, proceedings initiated by the show-cause notices be dropped. Adjudicating authority did not accept the contentions raised by the appellants and by various orders, as indicated hereinabove, confirmed the demand of the Service Tax, sought interest and also imposed penalties on the appellants herein. Aggrieved by such orders, they are in appeals before us. 3. The following counsels appeared for the various appellants. Shri S. Thirumalai, Senior Counsel, for M/s. Aspinwall & Co. Ltd. S/Shri K.S. Ravi Shankar, K.S. Naveen Kumar, Ashok Deshpande, R. Dakshinamurthy, Advocates for M/s. Alvares & Thomas. Shri V. Raghuraman, Advocate, for M/s. Sri Ganesh Shipping Agency and Mr. V. Naveen Babu Rai, Accountant, M/s. Sri Ganesh Shipping Agency Shri B. Anil Kumar, Advocate for M/s. Hasan Haji & Co. 4. Initiating the challenge towards the levy of Service Tax under the category of 'Port services', the ....
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....mission that this aspect of the matter was confirmed by the Tribunal in the case of appellants' own matter in Alvares & Thomas v. CCE [2009] 20 STT 466 (Bang. - CESTAT). It is his submission that the appellant herein had applied for registration under Custom House Agent, Clearing & Forwarding agent but the Revenue authorities registered them only under CHA and the said registration cannot be questioned at this juncture. It is also his submission that the appellant is rendering services relating to export cargo and hence it is out of scope of the services rendered under the category of Cargo Handling Services and hence, it cannot be classified as 'Port services', nor there can be any demand of Service Tax. For this proposition, he would rely upon the judgment of the Tribunal in the case of Dr. Lal Path Lab (P.) Ltd. v. CCE [2006] 5 STT 171 (New Delhi - CESTAT) as affirmed by the Punjab & Haryana High Court in CCE v. Dr. Lal Path Lab (P.) Ltd. [2007] 11 STT 307. It is his submission that the earlier adjudication order in the appellant's own case as regards these activities would not fall under C&F agents service has attained finality and department cannot keep on changing the classif....
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....ne Agencies' case (supra). (ii) Kin-ship Services (India) (P.) Ltd. v. CCE&C [Final Order No. 61 of 2008, dated 18-1-2008] (Trib.-Bang.) (iii) VBC Exports Ltd. v. CCE [2008] 14 STT 392 (Bang. - CESTAT). (iv) S.S. Maritime v. CCE [2009] 23 STT 362 (Bang. - CESTAT). (v) South India Corporation (Agencies) Ltd. v. CCE [2009] 21 STT 345 (Bang. - CESTAT). 6.1 It is his submission that the appellants are discharging the Service Tax liability at the rate of 15 per cent of the billed amount under the category of CHA services and the Revenue authorities are seeking to tax the balance 85 per cent of the value. Revenue is trying to tax the entire amount as Port services. He would also reiterate that the definition of 'Port services' has been amended by the Finance Act, 2010 and will be effective from 8-5-2010 and that the provisions of section 65A relating to classification of services would not be applicable in this case as the entire services are rendered within the Port. It is his submission that the amendment, which has been proposed by the Finance Act, 2010, is prospective in nature and not retrospective which is very clear from the Circul....
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....) Alang Marine Ltd. v. CCE&C 2006 (204) ELT 297 (Trib. - Mum.) (ii) Vaspar Concepts (P.) Ltd. v. CCE 2006 (199) ELT 711 (Trib. - Bang.) (iii) Punjab Communication Ltd. v. CCE 2006 (199) ELT 161 (Trib. - Delhi) 6.3 It is his further submission that the Revenue authorities were aware of the facts about the present issue as on the self-same issue for an earlier period, the proceedings were initiated which have been stayed by the Tribunal and hence, there cannot be any invocation of extended period of limitation as there was no deliberate intention to evade payment of duty. For this proposition, he relies on the following Apex Court judgments :- (i) Nizam Sugar Factory v. CCE 2006 (197) ELT 465 (SC) (ii) Cosmic Dye Chemical v. Collector of Central Excise 1995 (75) ELT 721 (SC). 6.4 He would submit that the impugned order be set aside and the appeals be allowed. 7. Shri B. Anil Kumar, Advocate, appearing on behalf of M/s. Hasan Haji & Co. would submit that the appellants provide stevedoring activities. It is his submission that they clear the goods from the port and take care of documentation and also undertake relate....
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....s attained finality, as there being no appeal filed by the Revenue or any cross-objection filed against an appeal filed by the assessee against the said impugned order to the extent it was against them. It is his submission that in these appeals, there is a challenge towards recovery or demand against the CENVAT credit of the Service Tax paid on the wage bills, labour, etc. He would submit that the adjudicating authority has not given any findings as to how the amount of credit has been irregularly availed and utilised. It is his submission that in the absence of any findings as to how the credit has been availed illegally, the demand which has been confirmed for the recovery of CENVAT credit would be improper. 8. In respect of the appellant M/s. Export Tradelink Agencies, none appeared but there is a communication on record that they would like an adjournment as Consultant is out of station. On perusal of the appeal memoranda and grounds of appeal, we find that the issue involved in this case being identical, the arguments which were put forth by various counsels before us and the adjudication order also being from the very same Commissionerate and services rendered also....
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....h and has held that scope and ambit of Port service defined in section 65(82) of the Finance Act, 1994 to be found out without reference to anything contained in section 42(1) of Major Port Trusts Act, 1993. It is also submitted that while referring the matter to Larger Bench, the co-ordinate Bench has held that all services otherwise taxable covered under Port services when rendered within territorial limits of a 'port' or 'other port' and expression used 'in any manner' would indicate wider coverage of taxable services. It is submitted that the various decisions cited by the assessee in the case of South India Corporation (Agencies) Ltd. (supra); S.S. Maritime (supra), and Homa Engineering Works (supra) wherein the facts were different and in most of these cases, the assessee appellants therein were doing or undertaking only stevedoring activity and hence the facts are different. It is also submitted that the precedent orders should be taken into consideration only if the facts are same, as has been settled by the Hon'ble Supreme Court in the case of B. Shama Rao and in the case of Punjab National Bank v. R.L. Vaid 2004 (172) ELT 24(SC). It is also submitted that the Revenue has ....
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....services' and demand of differential duty. The contention of the service provider is that they are rendering services as Custom House Agent (CHA) and paying service tax under the said category and that they are not authorized but only licensed by Port for providing services inside the Port. Port Services were brought under the Service Tax net with effect from 16-7-2001 and has been defined in section 65(82) of the Act. As per the definition, port service means- (i) any service in relation to a vessel or goods, and (ii) provided by port, other port or a person authorised by port or other port. The services rendered by the port or a person authorized by the port are not defined in the Act. Therefore, any service rendered within the port premises by the port or by any person authorized by the port is to be treated as 'Port Service'. The Service provider is issued with a Stevedoring Licence and Clearing & Forwarding Agency Licence by NMPT to perform stevedoring operation within port premises. No stevedore shall be allowed to work on board any vessel in the port except with stevedore licence issued by the port. 28. The issue to be decided here ....
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....he remaining services by stevedore. For example, section 42 of the Major Port Trusts Act, 1963 specify performance of service by Board or other person. Section 42(1) says that a Board shall have power to undertake the following services:- (a) landing, shipping or transhipping passengers and goods between vessels in the port and the wharfs, piles, quays in docks belonging to or in the possession of the Board; (b) receiving, removing, shifting, transporting, storing and delivering goods brought within the Board's premises; (c) carrying passengers by rail or by other means within the limits of the port or port approaches, subject to such restrictions and conditions as the Central Government may think fit to impose; (d) receiving and delivering, transporting and booking and dispatching goods originating in the vessels in the port and intended for carriage by the neighbouring railways, or vice versa, as a railway administration under the Indian Railways Act, 1890 (9 of 1890) (e) piloting, hauling, mooring, remooring, hooking, or measuring of vessels or any other service in respect of vessels (f) developing and providing, subjec....
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.... operations. The stevedoring operations actually mean loading and unloading of cargo within the port premises. The Commissioner has interpreted that the appellant is carrying out the services within the port and he has been authorized by the port to render such services in view of the licence given to him. Therefore, he would rightly fall within the ambit of the "Port Services". However, when we examined the issue in terms of section 42 of the Major Port Trusts Act, we find that in terms of that section, the major port is supposed to carry out a number of activities and there is provision in terms of the said section for the port to authorize any other person to render such services after taking prior approval of the Central Government. In the present case, the appellants strongly contend that the services rendered by them are not on behalf of the ports but on their own behalf. In other words, the appellants render directly the services and the licence is only a permission to undertake such services within the port premises. Therefore, it cannot be interpreted that the appellants are rendering any service on behalf of the port. We also find that the issue has been gone in depth in ....
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....the appellant since the assessee is a licence holder, therefore he would be the person authorized within the definition of "port service" as mentioned hereinabove. 17. We do not agree to the aforesaid contentions advanced by the learned Counsel for appellant for the simple reason that definition of "cargo handling service" as reproduced hereinabove and section 65(23) clearly puts a bar with regard to the imposition of tax meant for export which also includes handling of the export cargo." Revenue is aggrieved by this order of the Hon'ble High Court and has preferred an appeal before the Hon'ble Supreme Court. 15. It can be seen from the above reproduced findings of the Tribunal as upheld by the Hon'ble High Court, on the categorisation of the services rendered by the assessee in the case of Konkan Marine Agencies (supra) as to the same will not fall under the category of 'Port services'. It can be seen that all along, the assessee therein was functioning under stevedoring licence issued by the Port Trust. In the cases before us today, it is a common trait which revolves around the fact that the appellants herein were having the stevedoring licence and ....
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.... the section 35 of the said Act, as reproduced in the case of Homa Engineering Works, clearly shows that power of the Board to execute the works and provide appliances do not include the above activities being undertaken by the appellant. As such, it cannot be said that the services being provided by the appellant were covered by the Port services. Further, the Tribunal in the above case has observed that the authorization from the Port must be in respect of the services which the port itself is required to provide as such authorization would make an assessee step into shoes of the Port. Having already observed that such services were not required by the port, any authorization by the Port cannot convert the services into port services. In any case, we find that there is no authorization by the Port to the appellant to conduct the services on his behalf. Licenses issued by the Port authorities cannot be considered as authorization. Such licenses are issued by the Port authorities to all the persons working in the Port to ensure the safety and security of the Port Area and does not confer any power or authority of the Port on the person so issued with the licence. If the l....
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....the Official Gazette. Take for instance in Visakhapatnam Port, the Visakha Container Terminal Pvt. Ltd. has been authorized by Visakhapatnam Port Trust to handle the container cargo that is coming to Visakhapatnam Port. Here the TAMP has fixed the scale of rates, under section 48 of MPTA, by way of Notification published in the Gazette of India (which is mandatory requirement under section 42 of MPTA). The Stevedores and other port service providers, issued with licences by Ports, have not conferred with functional authority as seen in the case of private agencies maintaining container terminal or berths. This difference in functional freedom will bring out clearly the difference between an authorization given under section 42 of MPTA and a licence given under regulations under section 123 of MPTA. 9. In the light of the foregoing discussions and applying the ratio of law declared by the Tribunal in the case of Homa Engineering Works, we are of firm view that activities undertaken by the appellant does not fall under the category of Port Services." 16.2 Revenue, aggrieved by such an order, preferred Civil Appeal Nos. 2429-2430 of 2008 along with an application f....
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....moved the lacuna in the earlier port services, is correct. 18. Hence, in view of the foregoing reasonings, on the merits of the case whether all the services rendered by the appellants would fall under the category of 'Port services' or not, we hold that the services rendered by the appellants would not fall under the category of 'Port services'. As the impugned orders are set aside on merits, there can be no case of penalty or interest in respect of this issue. 19. At the same time, we find that in the case of Hasan Haji & Co., the learned adjudicating authority has ordered for the recovery of CENVAT credit which according to him, was not eligible to the assessee. On a careful scrutiny and perusal of the order, we find that the adjudicating authority has not given any reasoning for holding this view and the amount of CENVAT credit availed by him needs to be recovered from him. In the absence of any reasoning and finding, suffice to say that the said order is non-speaking order, we remit the matter only in respect of eligibility of CENVAT credit to the appellant assessee, i.e. M/s. Hasan Haji & Co., herein to the adjudicating authority and with a direction to co....