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2014 (12) TMI 502 - AT - Service TaxClassification of services - cargo handling service for import of goods - transportation by barges from the mother vessel to the jetty onshore - Held that:- when the goods are being transported by the barges from the mother vessel to the jetty onshore, that activity is part of the import transaction of bringing the goods into India from a place outside India. The question of rendering any service in respect of such goods by way of cargo handling or otherwise can take place only after the customs transaction is completed. Therefore, the question of levying to service tax the transportation by barges from the mother vessel to the jetty onshore, would not arise at all since the said activity is part of the import transaction leviable to import duty and we hold accordingly. This is also evident from the fact that section 14 of the Customs Act, 1962 relating to determination of value of import goods for the purposes of levy of customs duty and the Customs Valuation Rules, 2007 (CVR in short) were amended to specifically include barge charges and handling charges in the transaction value of the imported goods vide Finance Act, 2007 to overcome the adverse decision in the case of Ispat Industries (2006 (9) TMI 181 - SUPREME COURT OF INDIA). Section 14 was substituted "to specifically provide that transaction value of imported goods shall include, in addition to the price, any amount paid or payable for costs and services, including commissions, cost of transportation to the place of importation, insurance, unloading and handling charges to the extent and in the manner specified in the rules made in this regard". If the bills raised for the services rendered indicates the amount charged for cargo handling and transportation separately on actual basis, then the tax would be leviable only on the cargo handling charges. The contracts entered into with the customers show separately the charges towards shipping charges of cargo from Mother Vessel to Dharamtar jetty. Therefore, there is no merit in the contention that transportation charges should be included in the value of taxable services in respect of cargo handling service. Transport of coastal goods and goods transported through inland water came under the purview of service tax levy vide Finance Act, 2009, with effect from 06/07/2009. Vide notification No. 30/2009-ST dated 31/08/2009 transport of coastal goods in respect of items specified in the Table annexed thereto were exempt from service tax. The appellant herein undertook coastal transportation of fertilizers, which is one of the items specified in the notification as eligible for exemption. Revenue is seeking to confirm service tax demand under the category of cargo handling service. It is a settled position in law that when a new entry is brought under service tax levy, the same activity cannot be subjected to levy under an existing entry unless the new entry is carved out of the existing entry - Therefore, there cannot be any demand for service tax on coastal transportation of goods prior to July, 2009. Further the goods transported by the appellant is also covered by Notification 30/2009-ST. In this factual and legal scenario, the demand of service tax under the category of cargo handling service has to be set aside especially when the activity is squarely covered under the entry of coastal transportation of goods and we hold accordingly. Department initially sought to recover the tax under the entry for 'Port Services' vide letter dated 22.02.2008 but changed its stance to 'Cargo Handling Service' upon being informed by the Appellant vide letter date 27.02.2008 that it did not possess the requisite port authorisation for the barging to be classified under 'Port Services'. The decision of the apex court in Uniworth Textiles Ltd. vs. CCE, Raipur [2013 (1) TMI 616 - SUPREME COURT], wherein it was held that the extended period of limitation is not invokable for mere non-payment and requires a deliberate default on the part of the assessee, is also applicable. The facts available on record clearly show that the department itself was not clear as to the classification of service rendered by the appellant and has been changing their stand. In such a scenario, the allegation of suppression with an intent to evade service tax cannot be sustained. Thus the appeal succeeds on account of time bar also apart from merits. Impugned orders classifying the services rendered by the appellant under "cargo handling service" and confirming the service tax demands accordingly are clearly unsustainable in law. Accordingly we set aside the same - Decided in favour of assessee.
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