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2014 (7) TMI 972 - CESTAT AHMEDABADPort service - wharfage charges - under-valuation - receipt of additional consideration - Non inclusion of amount which was to be granted as rebate to M/s. UCL for discharge of service tax liability and the amount received by them as lease rent for waterfront charges and lee way facility given to M/s. UCL - Invocation of extended period of limitation - Penalty u/s 76, 77 & 78 - Held that:- Neither of the two conditions for being a port service is being fulfilled. Except for the ownership of the waterfront, GMB had no role to play. The entire port with infrastructure was built by M/s. UCL Ltd. and would be owned and operated also by M/s. UCL Ltd. under BOOT scheme. Thus, no service of whatsoever nature has been rendered by GMB, which may fall under the category of port service. No service has been rendered by them in relation to a vessel or goods. Just because ₹ 20 has been charged by GMB from M/s. UCL Ltd. under the head wharfage charges and GMB has paid service tax on the same under the category of port service, it cannot be said that the service rendered, if at all, by GMB was a port service. There is no estoppel against the law - except for the ownership of waterfront, GMB does not own anything. The port and the infrastructure thereon vests in M/s. UCL Ltd. and this is permissible under Indian Law as there can be two owners, one for the waterfront and another for port and infrastructure thereon. The law in India is that land can belong to one and building thereon can be of other person as compared to law in U.K. wherein building vests in the owner of the land - in the absence of any port service having been rendered by GMB, the question of charging differential service tax under the category of port service does not arise at all. The show-cause notice has not invoked any other head for taxing the service, if any. Renting of immovable property - allowing the user of waterfront for construction of port and infrastructural facility - Held that:- it can reasonably be concluded that allowing the user of the water front by M/s. GMB to M/s. UCL Ltd. was allowing the use of immovable property by GMB to M/s. UCL Ltd., and hence, ₹ 20 charged by GMB to M/s. UCL Ltd. at the most was on account of renting of immovable property. Just because the said charge were linked to the number of ships, it will not convert the same into port charges because basis of quantification or measurement is not relevant while deciding on the nature of the charges. Valuation - Held that:- Even if it is assumed that the grant of licence to use waterfront is a port service, appropriate tax on the "gross amount" actually charged by GMB for such service has already been discharged. - Applying the definitions of "gross amount charged" and "money" to the present case, it is evident that the only amount received by GMB is the amount equivalent to 20 per cent. of the usual wharfage charges, as the remainder 80 per cent. was rebate or a discount offered by GMB. - It is not in dispute that the remainder amount which was offered as rebate was not paid back to GMB either as "deduction from account" or "credit note" or "debit note" or by book adjustment. Even if the capital expenditure incurred for development of waterfront is regarded as "construction", the next logical question that will arise is whether the entirety of such construction is liable to be included in the value. - it is the absence of such a machinery provision itself sufficient indication that the Legislature did not intend to tax that transaction. The Revenue's case is even otherwise illogical and absurd as it seeks to assess the services rendered by GMB with reference to the normal wharfage charges which it recovers from users at the full-fledged ports developed and operated by GMB, such as the Kandla Port. This is clearly illogical as in the present case the service rendered by GMB was limited and confined to the grant of licence to use the waterfront for which it charged a limited amount (20 per cent. of the usual wharfage). Considering the limited nature of the service rendered, GMB could only charge a limited consideration. This amount, which happens to be 20 per cent. of the usual wharfage charge, is the amount actually paid and in the absence of any book adjustment or deduction from the account constitutes the "gross amount" actually charged for the service - any amount collected after April 1, 2008 by Gujarat Maritime Board, can be considered as statutory levy only and service tax liability thereon may not arise - impugned order is unsustainable and is liable to be set aside - Decided in favour of assessee.
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