TaxTMI 
TaxTMI 
2012 (9) TMI 850
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....crew of the vessel and minor repairs of the vessel, as required. The cage of the petitioners is that such service does not fall within the meaning of "port service" as defined under section 65(82) of the Finance Act, 1994 and they are, therefore, not exigible to any service tax under the said Act. The respondents, however, hold a belief that the service provided by the members of petitioner No. 1-Association amounts to port service and that, therefore, they are providing taxable service as defined in section 65 (105) (zh) of the Act. 2.2 On such basis, the Superintendent of Service Tax, Range Gandhidham-Kutch, issued a communication dated March 2, 2004 to the President of petitioner No. 1-Association. In the said letter, it was conveyed that ship chandlers are authorized by the port authority to supply provisions. They also carry out minor repair works to clear technical snag of the vessels through their locally arranged resources as workshops. It was. conveyed that besides such activities, they also provide service of supply of wooden pellets for packing of goods, tug or small size marine boats are also provided on rental basis to the shipping agents for outer or inner b....
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....pairs provided by ship chandlers but also the dry dock facilities and any repairs carried out to the vessels. However, the benefit of Notification No. 12/2003-ST dated June 20, 2003 would be available." At that stage, the petitioners have approached this court by filing the present petition praying for the reliefs noted above. The learned counsel for the petitioners submitted that ship chandlers principally supply provisions such as fruits, vegetables, milk, etc., for the crew members of the ship. Majority of them do not carry out any repair work, their services, therefore, cannot be made taxable under the service tax net. He submitted that even the repair work, if any, carried out by the members of the petitioner-Association is extremely minor in nature and they cannot be stated to have rendered any service in relation to a vessel. Counsel submitted that service will be such which should be exclusively performed by port authorities which under some authorization has been delegated into the provider only then, the question of being covered under the service tax would arise. On the other hand, learned counsel Shri Darshan Parikh for the Department oppos....
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....f the vessel, they also undertake certain repair works. of course, it is the case of the Association that such repair work is minor in nature. The respondents do not accept such proposition. Be that as it may, it is undoubtedly true that some of the members of the petitioner-Association involve themselves also in working of repairing the vessel in addition to providing supply for the crew. With this factual background in mind, if we refer to the statutory provisions, it emerges that section 65(105)(zn) makes taxable any service provided to any person by a port or any person authorized by the port, in relation to port services, in any manner. The term "port service" is defined under section 65(82) as under:- "(82) 'port service' means any service rendered by a port or other port or any person authorized by such port or other port, in any manner, in relation to a vessel or goods." The term "port" has been defined in section 65(81) as having the same meaning assigned to it in clause (q) of section 2 of the Major Port Trusts Act, 1963. It can thus be seen that for a person to be included in the service tax net under section 65(105)(zn) mu....
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....as used in section 65(82) of the Act. We are not inclined to accept such contention. The language used in section 65(82), in our opinion, does not permit such interpretation. It includes any service rendered by a port or other port or any person authorized by such port or other port. The section does not provide that the authorization that may be granted by the port must be of such service which the port as exclusively obliged to undertake, under the statute. The statutory provision does not draw, any such distinction. We may notice that the CESTAT in the case of Homa Engineering Works v. Commissioner of Central Excise, Mumbai-I [2007] 9 VST 47 (CESTAT-Mum) ; [2007] 7 STR 546 (Tri.-Mumbai), did hold that activity of ship repair at dry docks would not amount to port service. In the said decision, the Tribunal referred to the provisions contained in the Major Port Trusts Act, 1963 and formed an opinion that repair of the vessel not being done by the port, it cannot be stated to have been authorized by the port. It was held as under (page 56 in 9 VST):- "11. As such, we find that the powers of the Board to execute the work and provide compliance in terms of section....
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....on 35 provides that such works and appliances may include, besides others, [clause (1)] dry docks, slipways, boat basins and workshops to carry out repairs or overhauling of vessels, tugs, boats, machinery or other appliances. Sub-section (1) of section 36 authorizes the Board to undertake to carry out, on behalf of any person any works or services, on such terms and conditions as may be agreed upon between the Board and the person. Section 42 of the Act pertains to performance of services by the Board or other person. Sub-section (1) thereof provides that the Board shall have power to undertake the services mentioned in clause (a) to (e) of the said sub-section. Such services include landing, shipping or transshipping passengers and goods between vessels in the port area, receiving, removing, shifting, etc., of goods brought within the Board's premises, carrying passengers by rail or by other means within the limits of the port, receiving and delivering, transporting and booking, etc., of goods originating in the vessels in the port as also piloting, hauling, mooring, remooring, hooking of measuring of vessels or any other services in respect of vessels. Sub-section (3) of sec....