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2019 (3) TMI 820 - AT - Service TaxLiability of service tax - “terminal charges” received from Indian Railways - “demurrages” which they have collected from various clients - “royalty” which they received from terminal operator with whom they entered into a contract on Build-Operate-Transfer basis (BOT). Terminal charges received from Indian Railways - Held that:- The services rendered by the appellant, who are undisputedly a major port, in the port area for Indian Railways and for which they are getting paid is squarely covered by the definition of port services. The exemption available to Sec.99 of the Finance Act, 1994 and the notification 43/2012-ST dated 2-7-2012 are available to the services rendered by the Indian Railways the exemptions cannot be extended to services received by Indian Railways - the appellant is liable to pay the service tax on the terminal charges which they received from the Indian Railways. Demurrages which they have collected from various clients - Held that:- In view of the lack of clarity of the nature of demurrage charges as to whether these are the charges levied by the Indian Railways and only collected by the appellant and transferred to the Railways or only collected by the appellant from the client on their own, it is deemed to be a fit case to be remitted back to the original authority for determining as to who is service provider, what is the nature of service and who is the client paying the service charge. Royalty which they received from terminal operator with whom they entered into a contract on Build-Operate-Transfer basis (BOT) - Held that:- The service tax is proposed to be levied on the amount paid by the container terminal operator to the appellant as a part of the BOT agreement in which the appellant performs some services and the container terminal operator performs some other services. The question is whether such an arrangement would amount to container terminal operator using the franchise of the appellant and consequently, whether the royalty charges being chargeable to service tax under franchise services at the hands of the appellant or otherwise. Time limitation - Held that:- The appellant is an organisation under the Government of India and it is extremely difficult to imagine that they have an intention to evade payment of service tax. It is true that their understanding of the law could be different from that of the department. It is not in dispute that the appellant filed their ST-3 returns and were audited and they had provided whatever information was sought by the department - the extended period of limitation cannot be invoked. Appeal disposed off.
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