TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1273
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.... During the audit of accounts of the Appellant, it was noticed that the Appellant have received Rs 75.58,470/- for the FY 2008-09, Rs 28,13,334/- for the 2009-10 and Rs.10,20,029/-, for the FY 2010-11 (Up to December' 2010), from M/s. Chennai Container Terminal Limited (CCTL), for CFS Handling Charges, on which no Service Tax was paid by them. Consequently, the Show Cause Notice No:627/2011 dated 23/12/2011 came to be issued. 2.3 M/s. CCTL receives the imported cargo at the terminal and moves the same to container freight station at Royapuram Yard. The seal cutting, de-stuffing etc. of the container is done as a job work by the Appellant. They further stated that such activity is falling under Port Services, which is not liable for Service Tax. It was further reported that they had not entered into any written agreement with CCTL and acted only on oral agreement. 3. After due process of Law, the Joint Commissioner of Service Tax (II), Chennai in his Order after allowing cum tax benefit, confirmed the demand of Rs.11,89,425/- under Proviso to Section 73(1) of the Finance Act 1994 along with interest under Section 75 of the Act, imposed penalty of Rs.10,000/under Section 77 of ....
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....vity has been Sub-contracted to the appellant, based on the above clarification, the appellant is of the view that they are not liable to pay any Service Tax. Further, during the relevant period, there are several judgements and circulars to the effect that if the main contractor pays Service Tax, the sub-contractor need not pay. 7.4 The appellant also pleaded that the demand upto September 2010 has been made by invoking the extended period. Considering the facts and circumstances of the case, there is no justification for such invocation and hence the demand upto Sep 2010 is hit by time bar too. 7.5 Finally it is prayed for the impugned order to be set aside and allow the appeal. 8. Per Contra, the Authorized Departmental Representative Mr. N. Satyanarayana defended the Impugned order and the OIO; and prayed for dismissal of the appeal on merits as service activity has been undertaken in CTL, CFS at Royapuram not coming under the port area. 9. We have perused the documents placed on record and we have also considered the judicial precedents relied upon during the course of arguments. Upon hearing both sides, we find that the main issues to be decided are whether: - i) The li....
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.... definition of port service, as it stood upto 30.06.2010, the service provided by the appellant would be more appropriately classifiable as port service only. In as much as the service has been rendered by the appellant within port area, after 01.07.2010 also, the service is more appropriately classifiable under port service only. Further, from 01.04.2011 the appellant has been paying service tax in this regard, under port service only, and the department has not disputed such classification. Further, it has also been made clear that with effect from 01.07.2010 any service provided within the port would be classifiable under port Service only and section 65 A of the Act would not apply in so far as this service is concerned. Reliance in this regard is also placed on the decision of the Larger bench of the Tribunal in the case of Western Agencies Pvt. Ltd. Vs CCE - 2011 (22) STR 305 Tri-LB. In such circumstances, the demand of service tax under cargo handling service, confirmed against the appellant is not at all sustainable in Law. 9.4 Upon weighing the rival submissions for both the sides discussed in Para 9.2 and Para 9.3 Supra, we find that CCT-CFS is a separately demarcated ar....
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.... as customs inspection or onward transportation. This process is a critical step in the logistics chain. What happens during seal cutting and destuffing? Container Placement: The container is securely placed in a designated unloading area. Seal Cutting: The security seal on the container is cut, which allows for the container to be opened. Destuffing/Unstuffing/Stripping: Trained professionals then systematically unfasten and remove the cargo from the container. Cargo Sorting and Preparation: Once unloaded, the freight items are sorted and prepared for their onward journey, which may involve storage, distribution, or loading onto another mode of transport. Why is it important? Logistics Transition: Destuffing marks a crucial transition where cargo moves from containerized transport to another form, such as trucks or other vehicles, for distribution. Customs and Inspection: It is often required for customs inspection or other examinations of the cargo before it can be delivered. Efficiency: Proper destuffing is essential for efficiency and preventing damage to goods during the handling process. Cargo handling services and port handling services are terms that largel....
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....ces cover any service provided in relation to goods or vessels by a port or a person authorized by the port. This includes the cargo handling service provided within the port premises. Therefore to this extent there may be an overlap in cargo handling service and the port service. However since port services covers all the service in relation to goods and vessels and therefore more specific to port, the service provided in a port in relation to handling of goods would be appropriately covered under port service and no separate levy will be attracted under the category of cargo handling agency service. Similar would be the case in respect of service provided for storage of goods in the port premises." 9.7 However we find that the above circular/clarification was withdrawn vide Master Circular clarifying technical issues relating to taxation of services vide Circular No. 96/7/2007-S.T., dated 23-8-2007. Relevant portion of the Circular is reproduced below. "Further we note that the same Circular has clarified that the Services provided by sub-contractors are in the nature of input services. Service tax is, therefore, leviable on any taxable services provided, whether or not the se....
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....e proviso to Section 73 (1) of the Act. As such, the extended period is rightly invokable in this case and hence, the plea of time bar cannot be accepted..............." 9.9.2 We find that the Appellants have also fiercely contested the invocation of the larger period of the limitation against them throughout the proceedings during every stage of litigation i.e., at OIO /OIA and the present Appeal. 9.9.3 We find that time and again, it has been held by various courts including the Supreme Court that invocation of larger period is a draconian provision and has to be invoked with caution. This is a case of classification involving interpretation of Statutes, where one cannot find any suppression/misstatement warranting invocation of larger period. 9.9.4 We find that Revenue has picked up the figures from the balance sheet and profit and loss account maintained by the assessee. The balance sheet and profit and loss account has been held to be public documents by various decisions and it stands concluded that when the income arising from various activities stand reflected in the said public documents, it cannot be said that there was any suppression or misstatement on the part of th....
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.... burden is on Revenue to prove allegation of wilful misstatement. The onus is not on the assessee to prove their bonafides. In the case of CCE v. Chemphar Drugs Liniments [2002-TIOL-266- SC-CX = 1989 (40) E.L.T. 276 (S.C.)], the Supreme Court held that something positive other than mere inaction or failure on the part of the assessee or conscious or deliberate withholding of information when assessee knew otherwise, is required before it is saddled with the liability of the extended period. 9.9.6 The issue involved in this appeal also relates to interpretation of law. The decisions referred to above have clearly held that in such circumstances there can be no suppression of facts with an intent to evade payment of service tax. 9.9.7 We are in complete agreement with the Appellant's contentions that there has neither been any suppression of facts nor any wilful mis-statement warranting invocation of such larger period and that sufficient grounds do not exist in this case to sustain the allegation of wilful misstatement or the suppression of facts, and therefore, the extended period cannot be invoked. The show cause notice in this case was issued on 23.12.2011 and the period of....