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2014 (11) TMI 991 - AT - Service TaxPort Services - Respondent and ONGC entered into an agreement to permit ONGC to lay pipelines for carrying oil - In consideration for allowing ONGC to lay submarine pipelines through the Port limits, Mumbai Port Trust was paid compensation by ONGC - Compensation was calculated as 50% of the wharfage charges normally payable for such goods handled by the Port - Held that:- Respondent has no control over the goods passing through the pipelines and the respondents are not required to maintain contact, repair or otherwise service, the actual pipeline which was laid within their limits. It is also clear from the agreement that the respondent did not extend any facility, service or personnel in relation to this pipeline or the goods flowing through these pipelines and the amount paid by ONGC therefore, cannot be considered as being amount paid towards any service rendered by the respondent towards the pipeline or the goods going through the pipeline and the amount paid for providing permission to ONGC to lay their pipelines through the port limits. If such permission would not have been granted, ONGC would have had to pass the pipeline through private land increasing the cost of the land and the pipeline. Therefore, the payments were made for the permissions and not to receive any port service from the respondent. Mere erection of wharfage by itself does not amount rendering a port service and wharf is the structure where the ships dock for loading and unloading of goods. - The term used as ‘wharfage’ is merely to determine the measure of the compensation and not to determine the nature of the service rendered. Laying of pipelines and payments made by ONGC to the respondent for granting permission to laying pipelines does not cover under the category of ‘port service’. In these terms we do not find any infirmity in the impugned order - Demand id also barred y limitation - Decided against Revenue.
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