2018 (4) TMI 673

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....issued show cause notice demanding service tax on the ground that the contract between the Appellant and the owner of different vessels was meant for transportation of coastal goods. That scrutiny of the agreement i.e 'Time Charter' it emerges that the Appellant is hiring the entire vessel for carriage of their raw material. The vessels were supplied to the Appellant without transferring the right of possession of the vessels and without transfer of effective control. The time charter and bills of hiring attract the issue towards supply of tangible goods under sub clause (zzzj) of clause 106 of Section 65 of the Finance Act, 1994 on such services. That the Hon'ble Mumbai High Court in the case of Indian National Shipowners Association 2009 ....

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....nsferred to the Appellants. The contract of the owners of the vessel with Appellant is for provision of service of transportation of goods by sea using the dedicated vessel and the services of the crew of the owners; the remuneration for transportation is quantified with reference to time over which the service is rendered and the mode quantifying the consideration based on time spent for carriage of goods does not change the true character of the service of transportation. That on direction of department they paid service tax of Rs. 3,30,76,874/- alongwith interest of Rs. 27,32,668/- on 26.11.2010 and informed department on 27.11.2010 under the category of "Transportation of Coastal goods' as defined under Section 65 (105) (zzzzl) of the F....

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....nd the charter hire is a composite payment for the service of transportation of goods. The true commercial nature of contract is to be determined. He also takes us through the elaborate material on the nature of various categories of time charter to show that the control of the vessel remained with the ship owner and they were concerned only with transportation of goods. He submits that the case is not of charter by demise where the ship owner leases the vessel but of time charter where only the ship owner agrees with the charterer to render service by his master and crew to carry the goods put on board. He submits that the services in question are transportation of goods not liable to service tax. He relies upon Circular F. No. 354/53/2008....

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....OL - -01- SC - CX - LB (vi) Dharampal Prem Chand Ltd. 2011 (265) ELT 81 (TRI) (vii) Crompton Greaves Ltd. 2004 (177) ELT 1032 (viii) Touraids (I) Travel Services 2014 (35) ETR 234 (ALL.)   4. We have perused the records and taken into consideration the submission made by both the sides. On perusal of the facts of the case we find that no reason has been given in the impugned order as to how the services are covered under the Category of 'Supply of Tangible Goods for use Service". The adjudicating authority has not spelt clearly as to what agreements of the contract leads to such inference. It is more so in the light of the fact that no evidence are appearing to show the services rendered by foreign vessel as falling under the categ....