AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (9) TMI 483
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....to Rs. 4,99,98,663/-, penalty under Section 78 amounting to Rs. 39,27,45,111/-, in addition penalties under Sections 76 and 77 have also been imposed. 4. In the second Order-in-Original, the assessed duty is Rs. 2,16,84,812/- under Cargo Handling Service and an amount of Rs. 30,76,128/- already paid under a different classification is appropriated. Penalty under Section 76 is also imposed. 5. Applicants have been operating in various minor ports, mainly in the States of Gujarat, Maharashtra and Goa. At minor ports, ships are not able to come alongside the jetty due to draft and are therefore anchored at some distance within the port area and cargo is unloaded/loaded at the place of anchorage. Applicant's activity is stevedoring, unloading of cargo from the ship on the barges. These barges along with cargo thereafter move to jetty. At the jetty, cargo is again unloaded from the barges to jetty. The cargo is thereafter moved from the jetty to a storage place within the port area on dumper/trucks. The cargo is stored in the port area and security and safety of the goods is ensured. Such cargo is thereafter loaded on trucks or railways for their transportation to the place ....
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....t in the major port, no service tax was being paid by the applicants under the said service from 16-7-2001. 9. On 1-7-2003 "Other Port service" were made taxable. This was similar to "Port Service" but at Ports other than major ports. The applicants continued to enter into contract as mentioned earlier but started spitting the scope of the works into three parts and started issuing separate invoices for each part of the work. Three parts were similar to what was earlier in two parts, except that third part indicated various port levies, wharfage etc paid to port activities. However, the applicants started paying service tax under the category of "Other Port Service" on first part of its activity. Thus service tax which was hitherto being paid under "Cargo Handling Services" was thereafter paid under the category of "Other Port Service". However, as earlier, the estimated value for the second part of the work i.e. transportation of goods in barges from mother vessel to the jetty (and vice versa in case of export cargo) was not included for payment of service tax under the category of "Other Port Service". There is no dispute that in majority of the cases, the cargo was moved w....
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...." after availing exemption for pet coke under Notification No. 30/2009-ST. 14. From 2011-12 onwards, in respect of cargo within the port, a single contract was made and Service Tax was paid under "Port service" on the combined value which included all activities from unloading of the goods from the mother vessel to final loading of goods in the trucks or railways for transportation of goods to the customer's place. These include stevedoring, unloading of cargo from the mother vessel into barges, transportation by barges, unloading at the jetty, transportation to storage areas within the port, loading the cargo into trucks in the port 15. The main dispute in the present case is relating to the inclusion of the estimated cost of transportation of goods by barges from mother vessel to jetty or . vice versa in the value of services rendered. Further, according to Revenue the applicants are providing "Cargo Handling Service" and transportation by barges is an integral part of that service only, and therefore the value of transportation has to be included. Revenue has also claimed that even when cargo moves from mother vessel to other port, it is "Cargo Handling Service". 16....
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.... rail/trucks are available, cargo is required to be again loaded on rail/trucks so that the goods can be taken to their final destination viz. customer's place. All the activities in the port area are relating to the handling of the cargo and therefore these services have to be considered as "Cargo Handling Service" alone. The learned A.R. further argued that if the ship is in a position to come alongside the jetty, there is no requirement of moving the cargo on barges, and even as per applicant's argument, remaining service would be called as "Cargo Handling Service". The location of the mother ship depends upon the size of the ship, in many cases ships may be within half a nautical mile away and sometime it may be few nautical miles but the fact remains such ships are in the port area and this fact has also been confirmed by the learned advocate for the applicants. The learned A.R. also argued that within the port area, when the cargo is unloaded on the jetty and the cargo is transported on dumper/truck to some storage place within the port, this activity is also considered as part of "Cargo Handling activity" and even the applicant is not disputing that and was paying service ta....
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....cargo." 19. From the definition given above, it is clear that loading, unloading, handling of cargo for all modes of transport and any other service incidental to freight would be covered by the definition of "cargo handling". The definition also very clearly specifies that mere transportation of goods will not be considered as cargo handling service. The word "mere" is very important. The definition itself clarifies that if the activity is only of transportation, then the said activity cannot be called as cargo handling service. However, if transportation is an integral part of loading, unloading and handling of freight then it would be "Cargo Handling Service". As pointed by the learned A.R. when the cargo is unloaded on the jetty on most of the occasions cargo is required to be shifted on dumper/trucks to a nearby storage place within the port area, this activity also is a transportation activity but this activity is not mere transportation but transportation is incidental to freight. Similar is the situation in the case when the cargo is unloaded from ship to barges and thereafter barges moved to the jetty. To our mind, there is no distinction between movement of cargo on....
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....vice is not similar to other services like Telecommunication Service, Architect Service, Erection & Commissioning Services etc. Most of the services are based upon the nature of activity alone, which is not the use for Port Service. Port is geographical area. Other services are not based upon a geographical area. There was no stipulation in law that in port area any service shall be called as port service. The definition of the port service before 1-7-2010 itself stipulated few parameters to define Port Service. The first stipulation is that the services are in relation to goods or vessel. The other condition to be called as port service is that the services are rendered by the port or a person authorized by the port. Further, port itself is defined in terms of geographical area. Admittedly applicants are handling goods within port but as admitted by them, applicants are not authorized by the port, nor they are port themselves. Therefore, our prima facie view is that the services provided by them cannot be considered as a port service atleast before the definition was amended w.e.f. 1-7-2010. Nature of services is relating to handling of goods and can be provided in port area as al....