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2013 (1) TMI 241 - AT - Service TaxSupply of bunkers to vessels, transportation and charter hire of assets - Supply of Tangible Goods Service (SOTG) - demand of service tax - Assessee is registered under the category of "Port Services" - Held that:- It is not permissible for anyone to supply water or bunker to vessels and to supply these items the port's authorization is a must. Further, from the sample invoices reproduced in the show-cause notice, it is seen that the invoice mentions "supply of fresh water by barge as per nomination". It has to be noted that in this case, supply of fresh water would include cost of procurement of water, transportation of the same to the vessel and other costs incurred in relation to provision of service in the port. Supply of water and bunker to vessels is part of port services. It has not been explained why the appellant suddenly came to the conclusion that supply of water is not covered by port services on 1/04/2007, except stating that the transaction is a sale and they got legal advice. Details of legal advice and whether legal advice had taken note of Board's Circular is not clear. Thus the fact that the water is supplied by barges to the vessels only by nominated persons by port and invoice is containing the description "supply of water" would, prima-facie go against the appellant. Supply of barges/vessels to the customers without agreement - The invoice raised by the appellant gives description "supply of boats/barges for transportation, port bunkering etc. and the rate shown is a specific amount per month. In the absence of an agreement, the only option available is to arrive at a conclusion based on the invoice. The invoice used the words "supply of boats/barges". Transactions where hiring/leasing were involved attract sales tax or VAT in many States. Further, allowing another person to use the goods without giving legal right or possession and effective control is treated as service. Since no Sales Tax has been paid and no evidence has been shown that the transaction is a transaction of right to use and was liable to sale tax, the natural conclusion would be that the transaction is supply of tangible goods for use without parting with the right of possession and control. In the absence of any agreement, the only document available are invoices and invoices do not support the claim of the appellant. The appellants have not made out a prima-facie case in their favour - since the matter has to be heard in greater detail to understand the nature of transaction at least a portion of the amount demanded as pre-deposit is required appropriate to Rs.3.5 crores within 8 weeks from today and report compliance on 05/02/2013.
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