TaxTMI 
TaxTMI 
2026 (4) TMI 299
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....rvice' of export cargo, 'Commercial and Industrial Construction Service' etc. Departmental audit was conducted on the books of accounts of the appellant in August 2005 and Audit Memos dated 31.08.2005 was issued to the appellant seeking clarification on the nature of service and service taxability on the same. The audit memo was duly replied by the appellant vide letter dated 09.09.2005, explaining the nature of their service. In their reply, the appellant stated that no service tax was payable by them on the Cargo Handling service as the said services meant for export has been specifically exempted. 1.1. A SCN bearing C No. IV(4)68/S.Tax/BI/06/19081A dated 11.10.2006 was issued to the appellant for the period 2001-02 to 2004-05 demandin....
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.... Service". 1.4. Both the SCNs dated 11.10.2006 and 10.10.2011 were taken up together for adjudication and was decided by the Commissioner of Central Excise, Customs & Service Tax, Bhubaneshwar-I vide the impugned Order-in-Original No. COMMR/BI/ST/15-16/2017 dated 30.05.2017. In the said Order, the confirmation of demand was limited to the alleged "Port Service" which has been categorized by the appellant as "Cargo Handling Service". The Ld. adjudicating authority has considered the said service rendered by the appellant as "port service" and denied the exemption claimed by the appellant for export of cargo handling service. In support of his decision, the Ld. adjudicating authority has relied on the Circular No. B.11/1/2002-TRU dated 01.....
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.... such a conclusion, the Department has primarily relied on the definition of "Port Service", Section 42 of the Major Port Trust Act, 1963 and Circular No. B.11/1/2002-TRU dated 01.08.2002. In this regard, the appellant submits that the services rendered by them are not on behalf of the port but for their clients directly. Therefore, it cannot be interpreted that they were rendering the said service on behalf of the port. Accordingly, the appellant submits that the said service was not 'Port Service' rather it was of the nature of "Cargo Handling Services" in relation to export cargo and as such the said service would not come within the ambit of taxation in view of Circular No. B.11/1/2002-TRU dated 01.08.2002. 2.2. In support of their c....
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.... stevedoring service within the port area. They have been duly authorized by the Port authorities. Thus, the said services are appropriately classifiable under the category of 'port service' as clarified by the Board vide Circular No. B.11/1/2002-TRU dated 01.08.2002. Accordingly, he justified the demands confirmed in the impugned order. 4. Heard both sides and perused the appeal documents. 5. We observe that the appellant has been rendering the services relating to movement of export cargo inside and outside Paradeep Port on behalf of different clients like NALCO, Bhubaneswar, during the material period. Incidentally, "Cargo Handling Services" in relation to export cargo was specifically exempted from service tax during the m....
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....e" and not "Port Service" and the same would be exempted from service tax. The relevant portion of the decision of the Hon'ble Tribunal Bangalore is reproduced below for ready reference: 6. We have gone through the records of the case carefully. The point at issue is whether the services rendered by the appellants amount to "Port Services" and whether they are liable to pay Service Tax in terms of the Finance Act, 1994. We find that the appellants obtained the stevedoring license from the Mangalore Port Trust for carrying out the stevedoring operations. The stevedoring operations actually mean loading and unloading of cargo within the port premises. The Commissioner has interpreted that the appellant is carrying out the services wi....
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....tention that services rendered by them would not amount to "Port Services". In other words, it would only be "Cargo Handling Services". But, the appellants would not come within the ambit of taxation, because in respect of "Cargo Handling Services", the cargo in relation to exports are excluded from the purview. Since the appellant is only handling the export cargo, he would not be liable to Service Tax even under the category of "Cargo Handling Services'. 5.3. We find that the decision of the Tribunal Bangalore cited above has been affirmed by the Hon'ble Karnataka High Court. Thus, by relying on the decision cited supra, we set aside the demand of service tax confirmed along with interest and penalty in the impugned order. 5.4. We a....