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2016 (6) TMI 319 - CESTAT MUMBAI

2016 (6) TMI 319 - CESTAT MUMBAI - 2016 (43) S.T.R. 606 (Tri. - Mumbai) - Other port services - Consideration received for exclusive use of jetty and back-up land - Demand of Service tax alongwith interest and imposition of penalty - Section 76, 77 and 78 of the Finance Act, 1994 - Held that:- the respondent has been discharging its tax liability on the consideration for cargo handled. In relation to the fixed charges, the very nature of the charge delinks it as consideration for handling of car .....

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itime Board. Therefore, even if the goods are allowed to be stored after landing, the lease terms does not transform the activity into one of rendering other port services. Therefore, show cause notice do not sustain. - Decided against the revenue - Appeal No. ST/256/2010 - Order No. A/86879/16/STB - Dated:- 1-10-2015 - Shri M V Ravindran, Member (Judicial) And Shri C J Mathew, Member (Technical) For the Appellant : Shri D. Nagvenkar, Addl. Commissioner (AR) For the Respondent : None ORDER Per C .....

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nance Act, 1994. 2. The respondent is registered as provider of other port services and had contracted with the Maharashtra Maritime Board for improvement, operation and maintenance of the jetty and its backup area at Dharamtar for a 30-year period. This jetty was to be used for loading and unloading of import and export cargo. An agreement was entered into by the respondent with M/s United Shippers Ltd on 25th March 2003 for landing of import cargo by the latter for which respondent was to be r .....

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ration as per section 67 of Finance Act, 1994. 3. According to the show cause notice, these fixed payments were for the exclusive use of the jetty and back-up land by M/s United Shippers Ltd for docking barges carrying bulk cargo from mother vessel to shore and storing of landed cargo till removal; as this was in relation to unloading of bulk cargo and its storage, it was liable to be included in the gross amount charged and received as consideration for rendering of taxable services. The notice .....

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t the fixed amount was the recompense for allowing M/s United Shippers Ltd exclusive use of jetty and back-up area, the original authority found that this amount was in the nature of rental for the sub-lease. Holding that port service and other port services are restricted to services in relation to vessels or cargo in a port, the impugned order has, by distinguishing rental of immoveable property service as a fresh taxable service that came into effect from 1st July 2007, held it as not covered .....

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and warehousing service either. 5. It is the contention of Revenue that the respondent leased out the jetty to M/s United Shippers Ltd for the express purpose of unloading of cargo and that the back-up land had been leased out for storage and handling of such cargo which brought it within the meaning of having rendered other port services. Relying on the decision of the Tribunal in Gujarat Chem Port Terminal Co Ltd v Commissioner of Central Excise & Customs [2008 (9) STR 386 (Tri)], Revenue .....

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nd hence the fixed charges could not be acknowledged as consideration for rendering of renting of immoveable property service. Revenue contends that the adjudicating Commissioner had erroneously decided on classification when the dispute was restricted to inclusion of the fixed receipts in the value of taxable service. 6. Though none appeared for the respondent, we find that the material on record suffices for us to render a decision in the dispute. The primary contention of Revenue is that the .....

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by the major ports were made taxable in 2001 under section 65(zn) of Finance Act, 1994. All other ports are minor ports and are under the control of state governments. Most of the maritime states administer the ports through the respective Port Department but some have taken recourse to Maritime Boards for operating these ports with greater flexibility than is afforded to a departmental undertaking. 8. Section 65(76) of Finance Act, 1994 defines other port as has the meaning assigned to port in .....

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of consideration from a single entity i.e. M/s United Shippers Ltd and, that too, in relation to the activities undertaken at Dharamtar. The sole issue for consideration is whether the entire consideration received should be taxed or not. There can be no doubt that section 67 requires the gross amount to be taxed but such gross amount should be relatable to taxable service. From the above definitions, it cannot be construed that section 65 (105)(zzl) confers unfettered authority to collect tax .....

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would appear from the definition of other port supra that such authorization would be related to such services as are statutorily provided. 10. We also take note of the amendments in the levy of tax on port service and other port service in 2010. With those amendments, the focus of taxable service shifted from the provider to the location at which service was provided. The definition of port and other port in relation to taxable services made geographically-oriented than provider-oriented. This .....

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