TMI Blog2022 (3) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... lease agreement is for use of Port Land for stacking and import /export of Iron Ore / Manganese Ore and other Bulk Cargoes at Belekeri Port. In the present matter, it is also noted that other than the barging charges, Appellant also collected charges from Customers for handling of the cargo and loading and unloading of cargo etc. and Appellant had paid the Service tax on the amount charged towards cargo handling activity. The Appellant have not paid the service tax on barging activity during the period November 2006 to May 2009. They also not charged any service tax to customers on receipts related to barging service. The new entry viz Transport of Coastal Goods and Goods Transport through National Water ways and Inland Water Ways was introduced from Finance Act 2009. Time limitation - Penalty - HELD THAT:- In the facts of the present that firstly the issue involved is of pure interpretation of legal provisions therefore, it cannot be said that the Appellant had any mala fide intentions and have suppressed any fact with intention to evade payment of service tax. It is also on record that the Appellant have represented the matter before Audit team and also before departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1994. They have been paying service tax on such lighterage charges by classifying the service as Transport of Goods by Waterways Service , whereas during the period from April 2008 to Sept. 2009 they were declaring the same as exempted income collected while rendering Port Services. After the detail investigation a show cause notice was issued to the appellant for recovery of Service tax and was alleged that the barging activities namely transportation of the exported cargo from shore to point of anchorage through barges undertaken by the appellant at the Belikeri port, were in the nature of the Port Services and not covered under the category of Transportation of Coastal goods and Goods Transported through National Waterways and Inland water service . On adjudication, demand of service tax was confirmed under the category of Port Service. Hence Appellant filed the present appeal before this Tribunal. 2. Shri. V.S. Nankani, Sr. Advocate Shri. Hardik Modh, Learned Counsel appearing on behalf of the appellant submits that the new entry viz. Transport of Coastal Goods transported through National Water Ways and Inland Water Ways was introduced from Finance Act 2009, w.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TAT d. CST Vs. Nova Enterprises 2015(38)STR1012 (Tri. Ahmd) e. Velji P. And Sons (Agencies) Pvt. Ltd. and ors. Vs CCE 2007(8)STR 236 f. HML Agencies (p) Ltd Vs CCE 2018(12)GSTL 46 g. H.K. Dave Ltd Vs CCE 2008 (12)STR561 (Tri.-Ahmd.) h. Shreej Shipping Vs. CST 2014(36)STR 569 (Tri. Ahmd) i. South India Corporation (Agencies) Ltd. Vs CCE 2010 (17)STR 170 (Tri. Bang) XXXXXXXXX 4. He also submits that appellant was not authorized to provide Port Service . They had entered into agreement with government of Karnataka represented by Director of port and Inland Water Transport in Karnataka for a lease to use the port land for stocking Iron Ore/ manganese ore and other bulk cargoes at belekeri port for export of the goods for which the government accorded necessary sanction. In terms of the schedule, permission was restricted to area mentioned in the schedule appended to the agreement and activity of stevedore. The meaning of the expression authorization of port appearing in the definition under Section 65(82) of the Act is one who has been authorized to operate / handle the port, operation in terms of the Major Port Trusts Act or the Indian Ports Act. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 696 (Tri. Ahmd) (iv) UOI Vs Mahindra Mahindra Ltd., 1995 (76)ELT 481(S.C.) 7. He also submits that extended period of limitation is not invocable in the present facts as the Show Cause Notice was issued on 05.01.2011 for the disputed period from November 2006 to May 2009. The Audit team of Service tax department audited the books of accounts maintained by the Appellant and raised the objection regarding applicability of Service tax on barging activity. The Appellant vide letter dtd. 14.12.2009 and 21.01.2010 clarified to the department that service in question was not liable to be taxed under the category of Port Service . The Audit party accepted the clarification and did not raise any objection. All the relevant facts related to the present case were in knowledge of the revenue at the time when the audit was initiated since 21.07.2009 by Service tax department. The Final Audit report was kept in abeyance by the Service tax Department when investigation was initiated by DGCEI on 21.10.2010. The said facts clearly reveals that the revenue was well aware of the activities being undertaken by the Appellant from 21.07.2009 and therefore, larger period of limitation ought no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. He also placed reliance on the following decisions:- (i) 2019 (27) GSTL 363 (Tri. -Hyd) Cairn Energy India Pvt. Ltd. Vs CCE, Visakhapatnam -II (ii) 2020 (32) GSTL J 40 (SC) Carin Energy India Pvt. Ltd. Vs Commissioner (iii) 2011 (22) STR 305 (Tri. LB) Western Agencies Pvt. Ltd. Vs CCE Chennai (iv) 2015 (38) STRJ 123 (Mad) Chidambaram Shipcare Pvt. Ltd. Vs CESTAT (v) 2004 (174) ELT 344 (Tri. -Mum) Reliance Industries Ltd. Vs CC (Prev) Ahmedabad 10. We have carefully gone through the facts on records as well as the submission of the Appellant and the Revenue in details alongwith the case law cited. The issue to be decided in the present appeal is whether the barge activity carried out by the Appellant for transportation of goods from port to Mother Vessel through barges and barging/ lighterage charges recovered from customers is taxable under port services or otherwise i.e service of water transportation The period of dispute is from November 2006 to May 2009. 11. The appellant has been providing Cargo Handling Service, transportation of goods by Water, clearing and forwarding, etc., in the port area. Belkari Port does not have sufficient draft for b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011 (21) S.T.R. 257 (supra). CESTAT, Bangalore also quoted the decision of Velji P. Sons (Agencies) P. Ltd. (supra). The relevant Paras from the said decision are reproduced below: 16.1 In the case of Velji P. Sons, the facts were: the assessee therein was rendering the services of hiring of the barges, cranes, forklifts and they were licenced by Gujarat Pipavav Port Limited to carry out such activities. Revenue was of the view that the services rendered by the appellant would relate to goods hiring vessel and hence would fall under the category of port services as defined under Section 65(42) of the Finance Act, 1994. While allowing the appeal filed by the assessee against an order holding that the services rendered by the assessee would fall under Port services , the Tribunal held as under :- 6. After carefully considering the submissions made by both the sides, we find that the issue as to what service would get covered by the port services, scope of the port service was examined at length by the Tribunal in the case of Homa Engineering Works : 2006 (1) S.T.R. 19 (Tribunal) (citation supplied) referred supra. In para 8 of the said judgment, it has been observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... free to charge any amount from its customers for the services being provided by it and such collections are not regulated by the Port. In this view of the matter, the licence given to the appellant cannot be held to an authorization (emphasis supplied). 8. Licence means a permission given for specific purpose; the licence holder cannot be interpreted as having the powers or authority of the person issuing the licence, unless the licence specifically mentions about it. To take a simple analogy the person issued with driving licence, under no stretch of imagination, can be said to be functioning as Road Transport Authority. Authorization may be issued by way of licence, but not all licences are authorizations. Hence, the licences issued by Ports to various agencies (under Sec. 123 of MPTA) should not be confused with the authorization (may be by way of licence) issued under Section 42 of MPTA . The difference between authorization under Section 42 of MPTA and a licence issued under Sec. 123 is clearly understood if the functioning of private container terminals (e.g. P O) terminal in Navaseva in Mumbai, Visakha Container Terminal at Visakhapatnam etc.) operating in various m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Velji P. Sons is squarely applicable in this case, the judgment had also having been upheld by the Hon ble Apex Court, the ratio is binding on us. It is also to be noted that the judgment of the Hon ble Supreme Court in the case of Velji P. Sons seems to have been accepted by the Government of India, which can be ascertained from the fact that the Government of India in Finance Act, 2010 expanded the scope of many existing services and one of them being Port services . The expansion of definition of Port services , which has been brought into play by the Finance Act, 2010, would seek to include all services provided entirely within airport/port premises would fall under these services i.e. Port services and there is no pre-condition of any authorisation from the port authority for taxing the services. It is also seen from the Circulars issued by the Government of India, more specifically, Circular dated 26th February, 2010, the scope of modifications or expansion of definition of Port services would come into effect from notified date i.e. after the enactment of the Finance Bill, 2010. The said Finance Bill was passed by the Parliament and the President gave assent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rector of Port Inland Water Transport, Government of Karnataka and observed that the said lease agreement is for use of Port Land for stacking and import /export of Iron Ore / Manganese Ore and other Bulk Cargoes at Belekeri Port. Further, permissions issued by the Port authorities to the appellant cannot be considered as authorization inasmuch as the said permission issued is basically to enter into the Port area. The appellant has merely arranged the facility on behalf of the importer or exporter on reimbursable basis and not on behalf of the Port. Therefore, in the present matter conclusion of Ld. Commissioner that Appellant have been authorised by the port Authorities for carrying lighterage of the cargo from the quay to the mother vessel by using barges and collect charges from customers, the said activity falls within the ambit of Port Service is legally not correct and not sustainable. 17. W also find that the issue as to what service would get covered by the port services, scope of the port service was examined at length by the Tribunal in the case of Homa Engineering Works referred 2007 (7) S.T.R. 546 (Tri. - Mumbai) , supra. The extract of said judgment is as bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the employees of the Board as the Board may consider necessary; (b) buses, railways, locomotives, rolling stock, sheds, hotels, warehouses and other accommodation for passengers air goods and other appliances for carrying passengers and for conveying, receiving and storing goods landed, or to be shipped or otherwise; (c) moorings and cranes, scales and all other necessary means and appliances for loading and unloading vessels; (d) reclaiming, excavating, enclosing and raising any part of the foreshore of the port or port approaches which may be necessary for the execution of the works authorized by this Act, or otherwise for the purposes of this Act; (e) such breakwaters and other works as may be expedient for the protection of the port; (f) dredgers and other machines for cleaning, deepening and improving any portion of the port or port approaches or of the foreshore of the port or port approaches; (g) lighthouses, lightships, beacons, buoys, pilot boats and other appliances necessary for the safe navigation of the port and of the port approaches; (h) vessels, tags or other boats for use within the limits of the port or beyond those limits, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service in respect of vessels; and. (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 the purpose of performing the service or services and shall give a receipt in such form as the Board may specify. (3) Notwithstanding anything contained in this Section, the Board may, with the previous sanction of the Central Government, authorize any person to perform any of the services mentioned in sub-section (1) on such terms and conditions as may be agreed upon. (3A) Without prejudice to the provisions of sub-section (3), a Board may, with the previous approval of the Central Government, 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 authorized under sub-section (3) shall charge or recover for such service any sum in excess of the amount specified by the Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay, in special cases, remit the whole or any portion of the fees chargeable under sub-section (1) or sub-section (2) . 8. After carefully going through the submissions made by both the sides and after going through the relevant provisions of law, as extracted above, we find that taxable services under the net of Port Service means any service rendered by a port or any person authorized by such port. As such, the services which can be taxed under the said category have to be either services rendered by port itself or any person authorized by such port. Admittedly, repair of the vessel is not being done by the port. The lower authority has held the appellant to be a person authorized by such port to undertake the activity of repairing of vessel 20. We find that the decision cited by the revenue in the matter of Cairn Energy India Pvt. Ltd. supra is not applicable in the present matter. In the said case the assessee rendered pilotage service in a minor port based on the authorization granted by the Port Authority. Here Appellant was not authorized by the port for rendering the barging activity. In the present matter the case of Shreeji Shipping supra relied upon by Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of Appellant fell within the ambit of the aforesaid taxing entry w.e.f. 01.09.2009 only. The Appellant also paying service tax on their disputed activity w.e.f. 01.09.2009. Undisputedly, prior to 1-9-2009 transportation of goods by water way was not taxable and could not have been taxed under the head of port services. We agree with the argument of Ld. Counsel of Appellant that when a new entry is brought under the Service tax levy, the same activity cannot be subjected to levy under an existing entry unless the new entry is carved out the existing entry as held by the Hon ble Bombay High Court in the case of Indian National Shipowner s Association Vs UOI -2009(14)STR 289 (Bom). In the case of Jet Airways India Ltd. Vs CCE 2008(11) STR 645(T) the Tribunal by relying the decision of Board of Control for Cricket In India Vs Comm. Of Service tax Mumbai 2007 (7) S.T.R. 384 (Tri. - Mumbai) it was held that once the new entry is introduced with effect from the date without disturbing the earlier entry, it has to be interpreted that new entry is not covered by the previous entry. In view of legal position, the activity of Appellant not liable to Service tax under Port Service . The a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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