TaxTMI 
TaxTMI 
2019 (3) TMI 820
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....act on Build-Operate-Transfer basis (BOT). Terminal Charges: 2. It is the case of the revenue that the appellant is liable to pay service tax on the terminal charges which they received from Indian Railways in terms of an agreement between them and the Indian Railways under port service. Sec. 65(82) defines 'Port Service' as 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. With effect from 01.07.2010 the words 'in relation to a vessel or goods' was omitted. The terminal charges were received by the appellant from Indian Railways for the services which they rendered to the Indian Railways in transporting goods within the port area and for providing facilities such as track and engine. Therefore according to the Revenue, the services were covered by the definition of port services having been rendered within the port area by the port in relation to goods. It is the case of the appellant that these services are excluded by virtue of Sec.99 of Finance Act, 1994 read with notification 43/2012-ST dated 027.07.2012 which reads as follows: Notification No.43/2012-ST dated 2-7-2012 In exerci....
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....pellant exceeded the wagon hire charges, they paid the differential/ excess amount to the Indian Railways and as such wagon hire charges are getting adjusted in the demurrage charges which they collected from the trade. It is the case of the appellant that demurrage charges are collected by them from the trade on behalf of the Indian Railways and entire amount is remitted back to the Railways and it is not their income at all. The revenue disputes this factual position. Learned adjudicating authority in the impugned orders held that the trade is not at all concerned with the amount which is paid to the Indian Railways which is a separate level of transaction and the appellant collects demurrage charges from the trade which is a separate level of transaction. The demurrage charges collected by the appellant from trade do not form expenditure within the meaning of Rule 5(1) of Service Tax Valuation Rules and therefore should form part of the taxable value. Royalty charges: 5. The appellant licensed M/s Visakha Container Terminal Pvt Ltd to construct a wharf and install equipment on the existing wharf to provide port services to end customers and the appellant was maintaining all n....
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....tion cannot be invoked in their case. He relied on the judgment of Supreme Court in the case of CCE, Bangalore v Pragathi Agro Products Pvt Ltd [2015 (322) ELT 819 (SC)] and Uniworth Textiles Ltd [2013 (288) ELT 161 (SC)]. He also prayed that the penalties under Sec.73, 76 & 78 may be set aside as they had no intention to evade payment of service tax. 6. Learned departmental representative asserted that the demands are sustainable on merits as well as on limitation and penalties are correctly invoked. Therefore, the appeals may be rejected. 7. We have considered the arguments on both sides and perused the records and proceed to decide the issues involved on merits first. Terminal Charges: 8. It is not in dispute that the terminal charges are the amounts received by the appellant from the Indian Railways for the services provided to the latter. We, therefore, find no force in the argument of the appellant that their service should be considered as service provided by the Indian Railways and hence should be treated as exempted under Sec.99 of the Finance Act and under Notification 43/2012-ST dated 2-7-12 both of which clearly excludes services provided by the Indian Railways. Th....
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...., to a place of storage within the port area), storage of cargo in plots allotted by the Port, blending of different grades of coal in the port area and other kinds of cargo handling in the port area (other than export of cargo) can be held to be services ancillary to stevedoring and classifiable as "port services" under Section 65(82). 13. All the questions referred in the Referral Order are thus answered as above. 14. Registry is required to place the respective cases before appropriate Bench to decide the Appeals." 9. The appeal against this order of the Larger Bench has been admitted by the Hon'ble High Court of Madras but no stay has been granted. However, in the case of Chidambaram Ship Care Pvt Ltd (CESTAT-2015 (38) STR J123 (Mad), the Hon'ble High Court of Madras upheld the above judgment of the Larger Bench. We also find that the Hon'ble Apex Court in the case of Dilip Kumar & Co. and others (Civil Appeal No.3327/2007) held that "one has to look merely at the words clearly stated and that there is no room for any intendment nor presumption as to tax. It is only the letter of the law and not the spirit of the law to guide the interpreter to decide the liability to tax....
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....ing charges as recorded by the adjudicating authority in Para 21 of Order-in-Original No.5/2008-09 dated 22.07.2008. She further observes "demurrages are being treated on a different footing and no service tax is paid. In case of iron ore wagons, only wagon hire charges and not demurrages are paid by the assessee to the Railways. In case of other wagons, hire of wagon charges payable by the assessee or demurrage charges collected from trade is payable to the Railways. In the process, the wagon hire charges payable by the appellant is also covered up when demurrage charges are collected from trade. It is also observed that demurrage is nothing but penal hire charges for wagons to discourage detention and encourage quick turnaround of wagons. As such a sum is also liable to service tax on par with service tax on wagon hire and haulage charges already being discharged by the notice." In view of the lack of clarity of the nature of demurrage charges as to whether these are the charges levied by the Indian Railways and only collected by the appellant and transferred to the Railways or only collected by the appellant from the client on their own, we find it is a fit case to be remitted b....