TMI Blog2014 (9) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... s also in place outside port. Prima facie the services provided within the port area if covered by the definition of various services would be covered by that service if the same is not covered by the definition of “Port Service/Other Port Service”. Even applicant was paying service tax on certain activities under “Cargo Handling Services” from 16-8-2002 to 30-6-2003. From 1-7-2003, on the same activity, applicant started paying tax under other port service. Applicants have not made out a prima facie case on merits (except in case of transportation from one port to another which forms minor part of the demand) - No financial hardships has been pleaded - stay granted partly. - ST/86857, 86858, 86859, 85933 & 87184/2013-Mum - Stay Order Nos. S/1270-1274/2013-WZB/C-I(CSTB) - Dated:- 4-9-2013 - Shri S.S. Kang, Vice-President and P.K. Jain, Member (T) Shri D.B. Shroff, Sr. Advocate, for the Appellant. Shri P.N. Das, Commissioner (AR), for the Respondent. ORDER In this stay order two Orders-in-Original in respect of the same applicant are being considered together, as the issue involved is common. 2. The first Order-in-Original is dated 29-11-2012 and adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Cargo Handling Service . The applicant started entering into contract with modification. The modification was that the scope of work under the contract was split up into two parts. The first part included onboard stevedoring, unloading of cargo in barges at jetty and loading into trucks for plot storage. The second part was for transportation of cargo from mother vessel to jetty by barges, weighment of cargo, sprinkling of water, if required security arrangement etc., co-ordination with port, customs, etc (and vice versa in case of export cargo). As mentioned earlier, as per the industry practice, the rates used to be a combined rate per unit of MT rates. The applicant splitted up the rates into two parts based as per their estimation and indicated those rates in the contract. The applicant started paying Service Tax for the first activity under the Cargo Handling Service , which implies that for the estimated stevedoring, unloading and loading charges they started paying service tax under the category of Cargo Handling Service . Transportation of goods in the barges from mother vessel to jetty was not included in the said value and was considered as a separate activity othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansportation of petroleum and petroleum products. From 1-9-2009 onwards, the applicants started entering into two separate contracts for the same activity. The first contract covered transportation of goods either from mother vessel to jetty (or vice versa) by barges, or transportation from one minor port to another minor port which may be by another vessel or in some cases by barges. The second contract would be for the stevedoring, unloading and loading charges and other incidental services. The two separate contracts indicated separate rates for the activities covered therein. For the first contract relating to transportation of goods, service tax was paid under the new entry i.e. Transport of coastal goods and Transport of goods through National Waterways and Inland water . For the second contract relating to stevedoring, unloading and loading charges and other incidental services the applicants continued to pay service tax under Other Port Service as was being done earlier. 11. With effect from 1-7-2010 the definition of the port services were changed and scope was enlarged so as to include any activity in the port area. The requirement of services by port or a person au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the departmental officer also. The learned advocate for the applicant also stated that DGCEI has started investigating the case from 2006 onwards. In 2008, audit parties visited and even they suggested that the classification would be port service though the audit officials suggested inclusion of the transportation cost for payment of service tax under the port service. The learned advocate for the applicant says it was a sudden change of mind by the department that a Show Cause Notice was issued in 2008 under Cargo Handling Service even though all along discussion was relating to port service. The learned advocate also argued that transportation of the goods by waterways from one minor port to another minor port cannot be considered as cargo handling service as clarified by the Board in 2002 at the time of introduction of Cargo Handling Service. On enquiry from the Bench, the learned advocate also clarified that out of the demand of roughly ₹ 58 crores, demand of ₹ 27 crores would be within the normal period. 17. The learned A.R., on the other hand, argued vehemently that the scope of service provided by the applicant is to transfer the cargo from the ship to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided on each activity separately. If the argument of the applicant is to be agreed, then there is no reason why separate transportation charges are not being shown when the cargo is moved by dumper/truck in the port area. The learned A.R further argued that the applicant himself has confirmed in writing that he is not authorized by the port to undertake various port activities. In view of this position, the applicant was not authorized person and could not have provided the port services. The learned A.R. also argued that before 2002 scope of the work was unified and after 2011 again scope and of work is unified, rates are unified and now the tax are being paid on the full value. In view of this position, the department has correctly confirmed the demand and penalty. 18. We have considered the rival submissions and given considerable thought over the issue. The main issue to be considered in this case is whether the activity of unloading of goods from ship to finally trucks/rails would be considered as a single service or it can be split into two parts. The first one, cargo handling and the second one transportation of the cargo within the port area. The cargo handling servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the contract, the split up of activity has been admittedly started by the applicant only after the introduction of service tax under the Cargo Handling Service . Even while making the payment part of the payment is made by the customer before arrival of the ship and part when the goods are loaded on the truck/rail and is not linked to completion of one or other activity. In our view, splitting up of the scope of the work into various segments or in more than one contract or making of separate invoices would not make any difference in the nature of service. Thus prima facie we consider that all the activities from stevedoring, unloading on barges, barging, unloading from barges, shifting from jetty to storage place and thereafter loading on truck/railways are integrally connected and are in relation to handling of cargo. 20. We also find that the applicant at times have been transporting the cargo from one port to another minor port, (generally from one minor port to another port and sometime to major port also). Our prima facie view would be that when the goods are being moved from one port to another port, it is transportation of the goods and this transportation is not inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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