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M/s Essar Logistics Ltd. Versus Commissioner of Central Excise & Service Tax, Rajkot

2016 (2) TMI 222 - CESTAT AHMEDABAD

Cargo Handling Services - handling of export cargo as part of Stevedoring services - transportation of goods through barges (sea) - whether the Appellant is liable to pay the Service Tax on Lighterage & Stevedoring services rendered by them in relation to vessel or goods at the Magdalla/Hazira port under Port Services as defined under Section 65(82) of the Finance Act, 1994.

Held that:- The Appellant contended that the charges were fixed in the contract entered by way of negotiations. .....

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e applicable in the present case, as there was no authorization issued by the GMB to the appellant and the demand of service tax on Stevedoring and Lighterage charges, under port service, on the appellant, prior to 01.7.2010, cannot be sustained.

The question of demand of Service Tax on barge charges and the handling charges connected therewith would not arise at all with effect from 10-10-2007 as they form an integral part of the transaction value for levy of customs duty. Even for t .....

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ed. The demand of tax alongwith interest prior to 01.07.2010 and penalties are set aside. - Decided partly in favor of assessee. - Appeal No.ST/10892/2013-DB; Application No.ST/EXTN/14742/2014 - Order No. A/10080/2016 - Dated:- 4-2-2016 - MR. P.K DAS, MEMBER (JUDICIAL) AND MR. P.M. SALEEM, MEMBER (TECHNICAL) For the Petitioner : Shri V.K. Jain, Shri Vishal Agarwal, Ms.Dimple Gohil Advocates For the Respondent: Dr. J. Nagori, A.R. ORDER PER: P.K. DAS The Appellant filed this appeal against the Or .....

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wn as Stevedoring, Lighterage & Transshipment Agreement with M/s Essar Steel and rendering services for stevedoring and transshipment of finished steel goods. The Central Excise officers of Directorate General of Central Excise Intelligence (DGCEI) conducted search operation on 13.04.2007 at the premises of M/s Essar Steel. They seized various documents of M/s Essar Steel and other documents relating to the Appellant Company. In the follow up action, the Central Excise officers recorded stat .....

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the Appellant in relation to the vessel or goods at the port would be classified as Port service as defined under Section 65(82) of the Finance Act, 1994, as amended and covered as taxable service under Section 65 (105)(zzi) of the said Act, 1994. By the impugned order, the Adjudicating authority confirmed the demand of Service Tax alongwith interest and imposed penalty under the various provisions of Act, 1994. 3. The learned Advocate on behalf of the Appellant submits that the demand of tax .....

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ling Services. The definition of Cargo Handling Services specifically excluded the handling of export cargo and therefore, they were not paying Service Tax on Stevedoring services in respect of loading, unloading and handling of export cargo. 4.1 On the other issue (i.e. Lighterage charges), the transportation of goods through barges (sea), till 31.08.2009, there was no taxable head of services on lighterage charges. It is submitted that the Superintendent of Central Excise, by letter dt.23.09. .....

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in the case of United Shippers Ltd Vs CCE - 2015 (37) STR 1043 (Tri-Mum), upheld by the Hon'ble Supreme Court as reported in 2015-TIOL-173-SC-ST-LB. The Adjudicating authority, relying upon the decision of the Tribunal in the case of Reliance Industries Ltd Vs Commissioner of Customs- 2004 (174) ELT 344 (T), observed that the Lighterage charges would be covered under the head of loading and unloading service and covered under Port service. It is submitted that this view is contrary to the de .....

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tered Accountant of GMB that they have not issued any authorization to the appellant and therefore, the Appellant is not covered within the definition of Port service prior to 01.07.2010. He referred to various decision on this issue before the Bench. He further submits that decision of the Hon'ble Gujarat High Court in the case of Kandla Shipchandlers & Ship Repairers Association Vs UoI 2013 (29) STR 233 (Guj.) is not applicable in the present case, as, in that case, the petitioners w .....

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of Service Tax is also barred by limitation. It is a case of revenue neutrality. If the Service Tax was paid by the Appellant would be available as credit to M/s Essar Steel and therefore, there is no revenue loss. It is submitted that Honble Supreme Court and the Tribunal in various cases, held that in this situation, the demand of Service Tax for the extended period of limitation cannot be sustained. The learned Advocate submitted the written submissions in detail alongwith the compilation of .....

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ant, would clearly show that the Appellant is authorised by the Board for rendering the services. He particularly drew the attention of the Bench that the Appellants raised charges for Stevedoring & Lighterage services to M/s. Essar Steel are in conformity with the schedule of Board. It is submitted that the issue is squarely covered in favour of the Revenue by the decision of Hon'ble Gujarat High Court in the case of Kandla Shipchandlers & Ship Repairers Association Vs UoI - 2013 (2 .....

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elpful to the Appellant. He submits that the Lighterage charges are not cost of transport as held by the Tribunal in the case of Reliance Industries Ltd (supra). The claim of the Appellant is that some of the services of SEZ unit is exempted from Service Tax, cannot be accepted, as there was no exemption notification under the Finance Act, 1994. He relied upon the decision of the Hon'ble Gujarat High Court in the case of Essar Steel Ltd Vs UoI - 2010(249) ELT 3 (Guj.) 7. The learned Authoris .....

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he learned Authorised Representative submitted Written Submissions with compilation of case laws. 8. Heard both the sides and perused the records. 9. The issue involved in this appeal to be decided, is whether the Appellant is liable to pay the Service Tax on Lighterage & Stevedoring services rendered by them in relation to vessel or goods at the Magdalla/Hazira port under Port Services as defined under Section 65(82) of the Finance Act, 1994 as amended and covered as taxable service under .....

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in terms of the concession agreement entered between GMB (licensor) constituted by the Government of Gujarat under GMB Act, 1981 and M/s Essar Steel (licencee). M/s Essar Steel had two manufacturing facilities at Hazira at Domestic Tariff Area (DTA) and others and Special Economic Zone (SEZ). M/s Essar Steels (Hazira) Ltd got approval as SEZ unit vide letter dt.26.10.2006 issued by the Office of Development Commissioner, Kandla Special Economic Zone, Ministry of Commerce & Industry, Gandhidh .....

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ar Steel, Hazira and the mother vessel for both inward and outward cargos at Hazira anchorage. The relevant portion of the said contract is reproduced below:- Stevedoring, Lighterage & Transshipment Contract This contract is being made this 01st day of April, 2006, between Essar Steel Limited, 27 KM, Surat Hazira Road, Hazira, Surat as Manufacturers and Essar Logistics Limited, 27 KM, Surat Hazira Road, Surat as Logistics Operators, for the lighterage and transshipment of Bulk Raw Materials .....

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to carry out the lighterage and transshipment of the above mentioned cargos, on their own or chartered vessels. (2) The Logistics Operators guarantee that sufficient lighterage craft and other equipment will be provided by them, including licencesed Stevedores for carrying out the lighterage/transshipment operations at Hazira. (3) Manufacturers to provide all fuel required for all Operating vessels at Hazira on actual expenses to Operators. In case Manufacturers are unable to provide replenishme .....

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vices rendered to DTA unit of M/s Essar Steel, they were discharging Service Tax under the head of Cargo Handling Service. As the definition of Cargo Handling Service excluded export cargo, they were not liable to pay Service Tax in respect of loading and unloading and handling of export cargo. Lighterage Service is transportation of cargo in Barges from the mother vessel to jetty and vice versa. They are liable to pay Service Tax from 01.09.2009 under the head of Transport of Coastal Goods and .....

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2) of the Act, 1994: Any service rendered by a port or other port or any person authorised by such port or other port in any manner, in relation to a vessel or goods. Taxable service under Section 65(105)(zn) of the Act, 1994 means any service provided or to be provided, to any person, by a port or any person authorised by the port, in relation to port services, in any manner. (B) The Port Service has been amended w.e.f. 01.07.2010 as under:- Port Service means any service rendered within a po .....

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Act, 1994 1. Services provided in an airport or port 1.1 Two services, namely port services and the airport services were introduced in Budgets 2001 and 2004 respectively. The services provided by minor ports covered under other ports became taxable from 2003. The purpose behind creating these services was that since a number of activities are undertaken within the premises of ports and airports, it would be easier to consolidate all such services under one head. 1.2 It was reported that .....

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r a general one. 1.3 Further, both the definitions use the phrase any person authorised by port/airport. In many ports/airports there is no procedure of specifically authorizing a service provider to undertake a particular activity. While there may be restriction on entry into such areas and the authorities often issue entry-passes or identity cards, airport/port authorities seldom issue authority/permission letters to a service provider authorising him to undertake a particular task. Many tax .....

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evy. (D) Cargo Handling Service means loading, unloading, packing or unpacking of cargo and includes (a) cargo handling services provided for freight in special containers or for non-containerized freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport, and cargo handling service incidental to freight and (b) service of packing together with transportation of cargo or goods, with or without one or more of other services like loading, .....

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lause,- (a) coastal goods has the meaning assigned to it in Clause (7) of Section 2 of the Customs Act, 1962 (52 of 1962); (b) national waterway has the meaning assigned to it in Clause (h) of Section 2 of the Inland Waterways Authority of India Act, 1985 (82 of 1985); (c) inland water has the meaning assigned to it in Clause (b) of Section 2 of the Inland Vessels Act, 1917 (1 of 1917) (F) Finance Minister s Speech Budget 2009-2010 on 06.07.2009: 132. In the goods transport sector, Service Tax i .....

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xemptions would be provided. 12. The Adjudicating authority classified the Lighterage and Stevedoring services rendered by the appellant under Port Service for the period 1.10.2005 to 30.09.2010. On plain reading of the definition of Port service prior to the amendment as on 01.07.2010, it is clear that any service rendered by a port or other port, or any person authorised by the said port, in any manner, in relation to vessel and goods, would come within the definition of Port service . The App .....

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ves, piers, quays, or docks belonging to or in the possession of the Board. (b) Receiving, removing, shifting, transporting, storing or delivering goods brought within the Board s premises. (c) Carrying passengers within the limits of the Port or Port approaches, by such means and subject to such restrictions and conditions as the State Government may think fit to impose and (d) Piloting, hauling, mooring, re-mooring, hooking or measuring of vessels or any other service in respect of vessels. (2 .....

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mount leviable according to the scale framed under Section 37, 38 or 40. (5) Any such person shall, if so required by the owner perform in respect of the goods any of the services and for that purpose take charge of the goods and give a receipt in such form as the Board may specify. (6) The responsibility of any such person for the loss, destruction or deterioration of goods of which he has taken charge shall, subject to the other provisions of this Act, be that of the bailee under sections 151, .....

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previous sanction of the Central Government authorise any persons to perform any service in the Port. Section 42 of Major Port Trust Act, 1963 is reproduced below:- Section 42 - Performance of services by Board or other person. (1) A Board shall have power to undertake the following services:- (a) landing, shipping or transhipping passengers and goods between vessels in the port and the wharves, piers, quays or docks belonging to or in the possession of the Board; (b) receiving, removing, shift .....

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he Indian Railways Act, 1890 (9 of 1890); (e) piloting, hauling, mooring, remooring, hooking, or measuring of vessels or any other service in respect of vessels (f) developing and providing, subject to the previous approval of the Central Government, infrastructure facilities for ports.] 4[(f) developing and providing, subject to the previous approval of the Central Government, infrastructure facilities for ports.]" (2) A Board may, if so requested by the owner, take charge of the goods for .....

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enter into any agreement or other arrangement, (whether by way of partnership, joint venture or in any other manner) with, any body corporate or any other person to perform any of the services and functions assigned to the Board under this Act on such terms and conditions as may be agreed upon.] (4) No person authorised under sub-section (3) shall charge or recover for such service any sum in excess of the amount 6[specified by the Authority, by notification in the Official Gazette. (5) Any suc .....

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been taken charge of and a receipt given for them under this section, no liability for any loss or damage which may occur to them shall attach to any person to whom a receipt has been given or to the master or owner of the vessel from which the goods have been landed or transshipped. 14. The main contention of the learned Authorised Representative for the Revenue is that the GMB authorised M/s Essar Steel in terms of Section 32(3) of GMB Act, 1981 for carrying out the Lighterage operation of the .....

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n of port service. It is further contended that there is no need for specific authorisation from GMB. The expression in any manner, in relation to a vessel or goods in the definition of port service enlarged the scope of the definition which includes the sub-contractor, who are providing the specified port service within the port area of Gujarat, are liable to pay Service Tax. 15 We find that this issue has been discussed in various decisions by the Tribunal and the Hon'ble High Court as u .....

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d as such, the services rendered by him has to be treated as port services rendered by any person authorized by the port and thus liable to service tax. The Tribunal held that the power of Board to execute works under Section 35(1) of the Major Port Trust Act are not to the effect as to carry out repairing activity themselves. In fact, under the said Section, the Port is required to provide facilities for repair and not to undertake the repair itself. Ship breaking activity and ship manufacturin .....

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Velji & Sons (Agencies) P. Ltd Vs CCE Bhavnagar-2007 (8) STR 236 (Tri-Ahmd) In that case, the Appellants were engaged in Customs House Agent service, which was within the service net w.e.f. 1997. The Appellant was paying the Service Tax under the category of Customs House Agents services. A Show Cause Notice dt.15.07.2005 was issued, proposing demand of Service Tax for the period July 2003 to January 2005 on the ground that the services provided by the Appellant would come under Port servic .....

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ner - 2007 (7) STR 546 (Tri) observed that the authorisation from the port must in respect of the services, which the port itself is required to provide, and as such, authorisation would make an Assessee to step into the shoes of the Port. There is no authorisation by the port to the Appellant to conduct the services on their behalf. Licences issued by the port authorities cannot be considered as an authorisation. Section 42 of the Major Port Trust Act provides for authorisation by the Board for .....

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Service Tax under the cargo handling service. According to the Revenue, the Appellant correctly paid the Service Tax under the category of port service and rejected the refund claim. The Tribunal allowed the appeal of the Appellant. The Appellants obtained the stevedoring license from the Mangalore Port Trust for carrying out the stevedoring operations. The stevedoring operations actually mean loading and unloading of cargo within the port premises. The Tribunal observed that in terms of Section .....

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o undertake services within the Port premises. This decision of the Tribunal was upheld by Hon'ble Karnataka High Court as reported in 2009 (13) STR 7 (Kar) (Commissioner of Central Excise, Mangalore vs. Konkan Marine Agencies). The Hon'ble High Court, after considering Section 42 of the Major Port Trust Act, 1963 and the definition of Cargo Handling Service, held as under:- 13. Cargo handling service has been defined in Section 65(23) in the Finance Act, 1994. The said definition reads .....

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finition further makes it clear as day that in any case handling of export cargo would not attract service tax at all. After having gone through the aforesaid definition, it leaves no amount of doubt in our mind that such a service tax could not have been levied on the assessee which was handling loading of cargo, meant for export purpose. 15. We may further clarify that the definition of port service as found in Section 65(82) of the Finance Act would not be applicable to the facts of the prese .....

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Counsel for appellant for the simple reason that definition of cargo handling service as reproduced hereinabove and Section 65(23) clearly puts a bar with regard to the imposition of tax meant for export which also includes handling of the export cargo. (d) M/s H.K. Dave Ltd Vs CCE Bhavnagar-2008 (12) STR 561 (Tri-Ahmd) The appellants are having annual licences as steamer/stevedores agent issued by Gujarat Maritime Board. They are authorized to provide services of cargo handling and other servic .....

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isakhapatnam vs. Chowgule Brothers Pvt. Limited - 2010 (18) STR 164 (Tri. -Bang.) In that case the respondents were Custom House Agent (CHA). The adjudicating authority confirmed the demand of service tax for the period 01.07.2003 to 01.09.2006, on the ground that the Respondent was engaged in the Cargo Handling in the port premises and appropriately classifiable under Port Services . The Commissioner (Appeals) set-aside the Adjudication order. The Tribunal rejected the appeal of the Revenue. It .....

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ally Custom House Agent (CHA). They also undertake the loading and unloading of cargo. Stevedoring work inside port undertaken based on licence issued by port. The Tribunal, following the earlier decision in the case of Konkan Marine Agencies (supra) allowed the appeal of the Appellant on merit as well as on limitation. 16. The appellant strongly relied upon the decision of the Tribunal in the case of M/s Shreeji Shipping Vs CCE & ST, Rajkot 2014 (36) STR 569 (Tri-Ahmd). In that case, the ap .....

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e services provided at minor port in Gujarat. The Appellants contended that there was no authorisation by the Port or other ports for rendering services and therefore, it would not come within the definition of port service. The Tribunal observed that Section 32(3) of GMB Act, 1981 provides for an authorisation from the port for performing specified services, thus, the same is to be considered for determining the liability to pay the Service Tax. There being no authorisation in favour of the App .....

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an authorization issued by the GMB vide Notification No. GMB/T/12(25)/37-38/2007-16, dated 8-8-2007 in exercise of powers conferred under Section 32(3) of the GMB Act, 1980, authorizing M/s. Atash Nor Control Ltd. to provide for Vehicle Traffic and Port Management Services in the Gulf of Khambhat and recover fee for the same as has been fixed in Sections 37, 38, 41 and 42 of the GMB Act, 1980. No such authorization under Section 32(3) has been brought on record in respect of the services being r .....

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service rendered within a port or other port, in any manner. The amendments effected from 1-7-2010 are extracted herein below for the ease of reference. 65(82) Port Services means any service rendered within a port or other port, in any manner 65(105) to any person, by any other person, in relation to port services in other port, in any manner; Provided that the provisions of Section 65A shall not apply to any service when the same is rendered wholly within other port; The explanatory memorandu .....

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orized by the port prior to 1-7-2010. .. . . . . . . 20. The ld. Counsel for the Revenue has contended that the decision of the Tribunal in the case of Velji Sons Pvt. Ltd., which was upheld by the Apex Court, cannot be relied upon as even though the service rendered by Velji & Sons were at a Minor Port the judgment had been rendered considering provisions of the Major Port Trusts Act. We have hereinabove reproduced provisions governing Major Ports & Minor Ports and find are pari materia .....

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the demand against them is barred by limitation as the dispute in hand is one of interpretation and high judicial forums have at different time taken a different view. The Apex Court has in the case of Jaiprakash Industries Ltd. v. CCE reported in 2002 (146) E.L.T. 481 held that in such cases where different statutory authorities have taken divergent view extended period cannot be invoked. 17. On perusal of the above decisions, we find that there are two types of the decisions. In the case of H .....

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be taxed under the head of Port Service at the relevant point of time. In the present case, we are not concerned with the decision in the line of Homa Engineering Works (supra). The present case relates to the decision of Shreeji Shipping (supra). The learned Authorised Representative on behalf of the Revenue submits that in view of the decision Kandla Shipchandlers & Ship Repairers Association (supra), there is no need to look into the above decisions of the Tribunal. In the case of Kandla .....

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f Petitioner No.1 Association stated the service provided by the Member of Petitioner No.1 Association amounts to port service as defined in Section 65(105)(zn) of Finance Act, 1994 and they are liable to register themselves under Section 69 of the Act, 1984 and to pay tax accordingly. The Petitioners strongly relied upon the decision of the Tribunal in the case of M/s Homa Engineering Works (supra), which was over-ruled by Hon'ble High Court. The relevant portion in the case of Kandla Shipc .....

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s. In that view of the matter, the question is whether the agencies involved in providing repair service to the vessel would or would not be covered within the meaning of port service. To our mind, the term port service as defined under Section 65(82) is sufficiently wide to include such services. In our opinion, the members of the petitioner-Association who have been authorized by the port authorities to provide such services can be stated to be rendering service in relation to a vessel. The .....

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t authorities are obliged to undertake under the Major Port Trusts Act or such other statute which are delegated to other agency. He would contend that if such service is not exclusively to be undertaken by the port authorities, any permission to carry out such service granted to the members of the petitioner-Association would not be included within the expression authorized by such port as used in Section 65(82) of the Act. We are not inclined to accept such contention. The language used in Sec .....

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C.Ex., Mumbai, 2007 (7) S.T.R. 546 (Tri.-Mumbai) did hold that activity of ship repair at dry docks would not amount to port service. In the said decision, the Tribunal referred to the provisions contained in the Major Port Trusts Act, 1963 and formed an opinion that repair of the vessel not being done by the port, it cannot be stated to have been authorized by the port. It was held as under: 11. As such, we find that the powers of the Board to execute the work and provide compliance in terms o .....

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facility does not mean that it is the duty of the Board to undertake the repairing activity themselves. In fact, under the said section, the port is required to provide facility for repair and not to undertake the repair itself. Ship breaking activities and ship manufacturing activities may also be done in the port area, for which purposes facility may be provided by the port, but that will not make the same as port services . The Tribunal was of the opinion that the term any other services in .....

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r opinion, the term in relation to a vessel must be seen as to expanding the scope of coverage of the port service and cannot be confined to those services which are in relation to movement of vessels so as to exclude from its ambit the work of repair of vessels. . . . . . 13.1 From the above, it can be seen? that under the Major Port Trusts Act, the Board has certain functions and duties to be performed and enjoys certain powers to perform such functions and duties. It is, however, not necess .....

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n may arise. The term authorization would indicate permitting a person or agency to perform certain tasks subject to the prescribed conditions. In absence of such authorization, it may not be open to such person or agency to perform such tasks. However, such authorization need not necessarily be in respect of only those functions which the Board itself was required to perform under the Act. 18. The Hon'ble High Court observed that the authorization of the port has undoubtedly been granted .....

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vessels. In that case, there is no doubt that the petitioners were authorized by the Port to perform the activities in the Port, which were not included the work of repair of vessels. In this context, the Hon'ble High Court observed that the work of repair of vessels would be treated as included in the authorization as per the wide scope of definition of Port service. In the present case, we find that the undisputed fact is the Appellant were not authorized by the Port to perform any activi .....

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t on their own vessels or chartered vessels at Hazira and transshipment between Hazira anchorage and Bhavnagar, Dahej, Pipavav, Mumbai etc. It has been further observed that the Appellant has been authorized by the Port and the services of lighterage and stevedoring would be covered by the Port services. We do not find any evidence on record that Port had issued any authorization to the Appellant to perform any service in the port and such finding of the Adjudicating authority is totally erroneo .....

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are decided in that case. The essence of a decision is to be carved out from the reading of the facts, points for consideration and the decision arrived on. The Hon'ble Supreme Court in the case of Al Noor Tobacco Products India Ltd - 2004 (170) ELT 135 (SC), held that the ratio of a decision can be applied only if the facts are identical. A slight or a material change in the facts could lead to an entirely different conclusion. The Hon'ble Supreme Court in the case of Commissioner of C .....

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bservations from the judgment have to be considered in the light of the questions which were before this Court. [See Mehboob Dewood Shaik v. State of Mahatrashtra, 2004 (2) SCC 362]. In the above perspective, we find that the Hon'ble High Court in the case of Kandla Shipchandlers & Ship Repairers Association (supra) enlarged the scope of the definition of Port Service prior to 01.07.2010 to the extent the authorization need not necessarily be in respect of only those functions which the .....

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ny manner, the service rendered by the Appellant would come under the Port Service. So, the submission of the learned Authorised Representative that the present case is covered by the decision of Kandla Shipchandlers & Ship Repairers Association (supra) is mis-reading of the said case law. In other words, the present case is covered by the earlier decision of the Tribunal in the case of Shreeji Shipping (supra). In that case also, there was no authorization and therefore, the decision of t .....

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be per incuriam. 20. The learned Authorised Representative submitted that after considering the concession agreement between M/s. Essar Steel and GMB and the agreement between the appellant and M/s. Essar Steel, it will be construed that GMB authorised the M/s. Essar Steel, who in turn appointed the appellant as sub-contractor, as delegation of power. We are unable to accept the submissions of the learned Authorised Representative. The legislative words authorised by such port or other port , in .....

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necessary implication. There is a strong presumption against construing a grant of legislative, judicial or disciplinary power as impliedly authorizing sub-delegation; and the same may be said of any power to the exercise of which the designated body should address its won mind It has been held by the Hon'ble Supreme Court in a catena of judgments that when a particular thing is prescribed to be done in a particular manner, it cannot be done in any other manner. The appellant places relianc .....

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er way. (b) Tata Chemicals Limited vs. Commissioner of Customs- 2015 (320) ELT 45 (SC) In law equally the Tribunal ought to have realized that there can be no estoppel against law. If the law requires that something be done in a particular manner, it must be done in that manner, and if not done in that manner has no existence in the eye of law at all. The Customs Authorities are not absolved from following the law depending upon the acts of a particular assessee. Something that is illegal cannot .....

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rt, holds no water. But, on perusal of the agreement, there is no mention that the charges would be as per tariff schedule of the Port. The Appellant contended that the charges were fixed in the contract entered by way of negotiations. It is clear from the contract between the Appellant and M/s Essar Steel that it is an independent contract. In any event, the intimation given by the Appellant to GMB of the contract between them and M/s Essar Steels, cannot be treated as authorization by the port .....

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pellant contended that w.e.f. 01.09.2009, Transportation Of Coastal Goods And Goods Transported Through National Water was introduced in Service Tax net. The lighterage service was not covered under the Service Tax net prior to 01.09.2009 and the demand of Service Tax prior to 01.09.2009 on lighterage service cannot be sustained. This is supported by the Finance Ministers Speech on 06.07.2009 as reproduced at Para 11 of this Order. The Adjudicating authority observed that the lighterage do cove .....

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lude lighterage. The adjudicating authority relied upon the decision of the Tribunal in the case of Reliance Industries Limited (supra). We find that the Hon'ble Supreme Court in the case of Ispat Industries Limited vs. Commissioner of Customs, Mumbai - 2006 (202) ELT 561 (SC), held that the barge charges incurred for moving the goods from mother vessel to the jetty and vice-versa were nothing but cost of transportation. The relevant portion of the said decision is reproduced below :- 22. Le .....

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sel of the Revenue is clearly untenable. Admittedly, all the contracts entered into with the foreign sellers are either CIF contracts or FOB contracts with Bills of Lading nominating Bombay/JNPT/Dharamtar as the ports of discharge. As such the cost of transport has already been included in the price paid to the seller under the CIF contract or an ascertainable freight determined and paid by the buyer from the foreign port to the Indian port. Hence, a further addition to the transport charges und .....

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ler in the CIF or FOB contract. Hence, a further addition to the transport charges in the form of barge charges for the transportation by barges cannot be said to be contemplated by Section 14 of the Act. 60. In the impugned order dated 7-3-2001 the Tribunal has based its decision on its conclusion that the place of import was the Dharamtar Jetty and not the BFL (vide paragraphs 9 to 18 of The Tribunal s order). Without commenting on the correctness or otherwise of this view, we are of the opini .....

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e Dharamtar Jetty have to be added to the valuation. The fact that the mother ship could not come upto the Dharamtar Jetty is an extraordinary situation (due to lack of draft) and hence any extra transportation charge to meet this situation cannot, in our opinion, be added to the value of the goods. 64. For the reasons given above, this appeal is allowed and the impugned order of the Tribunal as well as of the Customs authorities are set aside, and it is held that the charges for transportation .....

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the jetty and vice versa is not liable to tax. It has been observed that the activity of transshipment of import and export cargo from mother vessel to the jetty and vice versa is carried out by the barges (termed as Daughter Vessel) on account of draft not permitted the mother vessel to travel until the jetty at minor port. It is stated that first transportation of cargo from the mother vessel to the jetty is to be treated as continuation of journey of the goods in the import stream into India. .....

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, by and large, results in a condition which must be fulfilled before the goods can be brought inside the customs barriers, i.e. before they form part of the mass of the goods within the country. It would appear to us that the import of the goods into India would commence when the same cross into the territorial waters but continues when the goods become part of the mass of goods within the country; the taxable event being reached at the time when the goods reach the customs barriers and the bil .....

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m 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. 5.3 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 .....

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10(2) of CVR specifically provided for (2) For the purposes of sub-section (1) of Section 14 of the Customs Act, 1962 (52 of 1962) and these rules, the value of the imported goods shall be the value of such goods, for delivery at the time and place of importation and shall include - (a) the cost of transport of the imported goods to the place of importation; (b) loading, unloading and handling charges associated with the delivery of the imported goods at the place of importation; and (c) the cos .....

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ee on board value of the goods; Provided further that in the case of goods imported by air, where the cost referred to in clause (a) is ascertainable, such cost shall not exceed twenty per cent of free on board value of the goods: Provided also that where the free on board value of the goods is not ascertainable, the costs referred to in clause (a) shall be twenty per cent of the free on board value of the goods plus cost of insurance for clause (i) above and the cost referred to in clause (c) s .....

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imported, goods referred to in clause (a) includes the ship demurrage charges on charted vessels, lighterage or barge charges . These amended provisions came into force with effect from 10-10-2007. The C.B.E. & C. has also clarified vide Circular 34/2009, dated 30-11-2009 that the issue of ineligibility of barge charges in the value (of imported goods) will be governed by the provisions of Section 14 of the Customs Act, 1962 read with the Customs Valuation (Determination of Price of Import .....

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and the bill of entry for home consumption is filed. 23. The learned Authorised Representative on behalf of the Revenue submitted that the dismissal of appeal without giving reason by the Hon'ble Supreme Court in the case of United Shippers Ltd, does not amount to precedent. We are afraid to accept the submission of the learned Authorised Representative. The Hon'ble Supreme Court in the case of CCE Thane-II Vs United Shippers Ltd, dismissed the Civil Appeal filed by the Revenue. The ju .....

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perused the material available on record. In our considered opinion, we do not see any good ground to interfere with the judgment and order passed by the Tribunal. Accordingly, the Civil Appeals are dismissed. The submission of the learned Authorised Representative is that the above judgment is without any reason. In the case of Kunhayammed Vs State of Kerala - 2001 (129) ELT 11 (SC), the Hon'ble Supreme Court held that where an appeal or revision is provided against an order passed by a co .....

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missed in the absence of detailed reasons or without reasons when superior Court upholds decision of lower court from which appeal arose. The relevant portion of the decision is reproduced below:- 32. This Court has consistently held that the medical supplies supplied to the Doctors are liable to excise duty. Elaborate consideration may not be forthcoming in these judgments, but, in our view, the issue stands concluded. We say so for the reason that this Court, in catena of cases, has opined tha .....

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d and an appeal provided under Article 133 is dismissed also with the words the appeal is dismissed . In the former case it has been laid by this Court that when a special leave petition is dismissed this Court does not comment on the correctness or otherwise of the order from which leave to appeal is sought. But what the Court means is that it does not consider it to be a fit case for exercise of its jurisdiction under Article 136 of the Constitution. That certainly could not be so when an appe .....

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nder Section 35L of the Central Excise Act, 1944. The Hon'ble Supreme Court affirmed the decision of the Tribunal and the decision of the Tribunal merges in the decision by the Hon'ble Supreme Court which remains operative in the eye of law. So, the submission of the learned Authorised Representative cannot be sustained. 25. The other issue is whether the Stevedoring and Lighterage services at Magdalla Port rendered by the Appellant to unit located in SEZ status (i.e. prior to 20.10.2006 .....

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the Appellant submits that by virtue of Section 26(1)(e) of the SEZ Act read with Rule 31 of the said Rules, there was exemption from levy of Service Tax on the taxable service provided to a developer or a unit to carry on the authorized operation in state. He relied upon the following decisions:- i) Reliance Ports and Terminals Ltd Vs CCE-2013-TIOL-1473-CESTAT-MUM ii) Intas Pharma Ltd Vs CST-2013-TIOL-1091-CESTAT-AHM iii) Tata Consultancy Services Ltd Vs CCE-2012-TIOL-1034-CESTAT-MUM We find th .....

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e extended period of limitation, observed that the Appellants had suppressed the gross amount charged and received from M/s Essar Steels. Even after rendering the stevedoring services (export cargo) and lighterage service (inward as well as outward cargo), they failed to include the stevedoring charges (export cargo) and lighterage charges (both inward and outward cargo) while showing the taxable values in the ST 3 returns under Port services. We find that the Appellant was paying Service Tax on .....

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n as under:- As you are aware that in the last General Budget 2009, Finance Minister has proposed amendment to Section 65 thereby including new services i.e. Service provider in relation to transport of coastal goods and goods through National Waterways and Inland Water being among others new services liable to attract Service Tax. Since you are also engaged in the above category of service, you are liable to pay Service Tax on the gross amount so collected in this regard. It may further be ment .....

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