Vessel Chartering Dispute: Pre-Delivery Fuel and Water Charges Excluded from Service Tax Calculation Under Rule

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....CESTAT adjudicated a service tax dispute involving vessel chartering services. The tribunal determined that fuel, bunker, and water charges incurred prior to vessel delivery cannot be included in the taxable service value. The appellants' reimbursement for these pre-delivery goods, which were subject to VAT, were deemed separate from the core charter service. The tribunal distinguished between goods supply and service provision, specifically noting that the fuel and water supplied during vessel delivery preparation do not constitute part of the taxable service contract. Consequently, these charges cannot be incorporated into the assessable value for service tax calculation. The appeal was allowed, excluding these preliminary supply costs from tax computation.....