TaxTMI 
TaxTMI 
2007 (5) TMI 52
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Rs. 12.93 crores approximately. They were issued a show cause notice dated 23-1-2004 alleging that the said services undertaken by the appellants are "Port Services" which are liable to Service tax. The appellants took a categorical stand before the lower authorities that the services rendered by them for repairing of the vessels, under a contract with their customers cannot be treated as "Port Services" and hence are not liable to service tax. However, the authorities below by referring to the Board's Circular No. 67/16/2003-ST, dated 10-11-2003 and also by referring to the various provisions of Major Port Trust Act and Finance Act, 1994, held against the appellants and confirmed the demand as also imposed penalty. 3. Shri V. Sridharan, ld. Advocate arguing on behalf of the appellants has submitted that Clause 67 of the Finance Act, 1994 refers to "Port Service" as "any service rendered by a port or any person authorized by such port, in any manner, in relation to a vessel or goods". Port has been defined in Clause 66 as having the meaning assigned to it under Section 2(q) of the Major Port Trust Act, 1963. Thereafter by referring to the definition of "port" as given in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and provide appliances etc. has been detailed. As per sub-section 2(1), the Board has to provide for dry dock to carry out repairs or overhauling of the vessels. As such, submits the Ld. DR that this is a job, which the Board can itself perform, or authorize other person to perform. Since the appellants has been authorized to do so, he steps into the shoes of the Board and as such, the services rendered by him has to be treated as port services rendered by any person authorized by the port and thus liable to service tax. 6. In his rejoinder, Ld. Advocate Shri Sridharan submits that the said section only provides the power of the Board to provide appliances, which include providing of dry docks which y itself for further carrying out the repair activities, which cannot be equated with the activity itself. 7. After considering the submissions by both the sides, we find that the disputed issue revolves around the interpretation of "Port Services" as appearing in Section 65(67) of the Finance Act and the various provisions of The Major Port Trust Act, 1963 (38 of 1963), to which our attention has been drawn to by both the sides. As such, for ready reference, we would like to rep....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng vessels; (d) reclaiming, excavating, enclosing and raising any part of the foreshore of the port or port approaches which may be necessary for the execution of the works authorized by this Act, or otherwise for the purposes of this Act; (e) such breakwaters and other works as may be expedient for the protection of the port; (f) dredgers and other machines for cleaning, deepening and improving any portion of the port or port approaches or of the foreshore of the port or port approaches; (g) lighthouses, lightships, beacons, buoys, pilot boats and other appliances necessary for the safe navigation of the port and of the port approaches; (h) vessels, tags or other boats for use within the limits of the port or beyond those limits, whether in territorial waters or otherwise, for the purpose of towing and rendering assistance to any vessel, whether entering or leaving the port or bound elsewhere, and for the purpose of saving or protecting life or property and for the purpose of landing, shipping or transshipping passengers or goods under Section 42; (i) sinking of tube-wells, and equipment, maintenance and use of boats, barges and other appliances for the purpos....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on of the Central Government, authorize any person to perform any of the services mentioned in sub-section (1) on such terms and conditions as may be agreed upon. (3A) Without prejudice to the provisions of sub-section (3), a Board may, with the previous approval of the Central Government, enter into any agreement or other arrangement, whether by way of partnership, joint venture or in any other manner with, any body corporate or any other person to perform any of the services and functions assigned to the Board under this Act on such terms and conditions as may be agreed upon. (4) No person authorized under sub-section (3) shall charge or re cover for such service any sum in excess of the amount specified by the Authority, by notification in the Official Gazette. (5) Any such person shall, if so required by the owner, perform in respect of goods any of the said services and for that purpose take charge of the goods and give a receipt in such form as the Board may specify. (6) The responsibility of any such person for the loss, destruction or deterioration of goods of which he has taken charge shall, subject to the other provisions of this Act, be that of a bailee under....
X X X X Extracts X X X X
X X X X Extracts X X X X
....her services rendered by port itself or any person authorized by such port. Admittedly, repair of the vessel is not being done by the port. The lower authority has held the appellant to be a person authorized by such port to undertake the activity of repairing of vessel. 9. The appellant is admittedly a partnership firm carrying on a business of all types of marine repairs for which purpose they are given a repair contract involving supply of material, steel removal job, fabrication, refitting, and over hauling of machinery, from the principle contractor like Mazagaon Docks Ltd. etc. For such purposes, they have been given vendor registration. They also receive direct contract of repair from foreign ship owners or through their steamer agent 10. Revenue has placed reliance upon Section 35 of the Major Port Trust Act, 1963, which defines power of the Board to execute the work sub clause (1) to Clause 2 of the said Section stands invoked by Revenue in the impugned order. The said clause is to the effect that the work of the Board will include establishing of dry dock, slipways, boat basins and workshop to carry out repair or over hauling vessels/tugs, boats, machinery or other ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n Admittedly, piloting, hauling, mooring, remooring, hooking, or measuring of vessels are activities which are directly connected with the entry or exit of the vessel from port area. As such, the subsequent expression appearing in the said clause has to be held as covering the services which are in relation to the movement of the vessel and has to be understood and construed by applying the principle of ejusdem g-eneris. We may, at this stage, borrow the observations made by Hon'ble Supreme Court in case of Sidhdheshwari Cotton Mills (P) Ltd. v. U01 reported in 1989 (39) E.L.T. 498 (S.C.) = 1989 2 SCC 458, reproduced hereunder: "12. The expression ejusdem generis - 'of the same kind or nature' - signifies a principle of construction whereby words in a statute which are otherwise wide but are associated in the text with more limited words are, by implication, given a restricted operation and are limited to matters of the same class or genus as preceding them. If a list or string or family of genus- describing terms are followed by wider or residuary or sweeping-up words, then the verbal context and the linguistic implications of the preceding words limit the scope of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent of the vessel. It is nobody's case that repairing of vessel in the dry docks is connected with the movement of vessel. As such, the Revenue's reliance on the above provisions do not advance the case. 14. We also find a force in the appellant's argument that sub-section of Section 42 provides for authorization by the Board for the various services at the rate specified by that port in the Official Gazette. This has reflected upon the fact that various services, which can be authorized by the Board to any other person are routine services for which various rates can be fixed in advance. As far as the repairing of vessel is concerned, the charges would definitely depend upon the extent of work required to be done. We are informed that such consideration depends upon the contract arrived at after much negotiations. This fact leads us to hold that such contract services of repair of vessel cannot be held to be "port services". 15. During the course of arguments, it was also contended by Revenue that the appellant are given a licence and registration to carry out the services, which port is required to do. We have seen the by-laws governing grant of licence to carry....