TMI Blog2023 (6) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... telecom facilities, pantry and security. None of these services are being provided or to be provided, to KPPL by the Port Department. KPPL has developed the land, built a Port and are offering services to the trading community on the basis of fees fixed by KPPL. This contractual permission by the Port Department to KPPL for setting up and running port facilities cannot be termed as support services of business or commerce, to be taxed at the Port Departments hands. The concession fee paid by KPPL to the Puducherry Port as a percentage of gross revenue generated by the concessionaire each year is also not a payment for any support services of business or commerce given by the Port Department to KPPL. It is basically a payment for the rights to develop / operate / maintain the Port including project facilities - the impugned order has erred in classifying the activity of the BOT contract under sec. 65(105)(zzzq) of the Finance Act, 1994 and that the levy must fail. The Appellant has relied upon the judgment in COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, GOA VERSUS MORMUGAO PORT TRUST AND VICE-VERSA [ 2015 (10) TMI 1736 - CESTAT MUMBAI ]. The facts of the case are that M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Constructions Ltd (MCL). Granting them the rights to develop / operate / maintain the Port including project facilities on a BOT basis. Subsequently, MCL transferred and assigned the project to their wholly owned subsidiary, namely M/s. Karaikal Port Pvt. Ltd. (KPPL) who would be the concessionaire for the Port project. KPPL were given the freedom for the levy, fixing and revising tariffs for various port services on the premises. In consideration for the grant of the said concession , a concession fee was to be paid by KPPL to the Puducherry Port as a percentage of gross revenue generated by the concessionaire each year. The gross revenue included revenue generated by the concessionaire from the operation of the port or any other service in respect of vessels and cargo and all other revenues from the services within the port. The impugned order held that the royalty / concession fee / lease charges received by the Port from KPPL represents the consideration received by the Port Department for providing services relatable to the taxable service defined under sec. 65(105)(zzzq) of the Finance Act, 1994 under the category of Support Services of Business or Commerce . Service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erchandising Company vs CST, New Delhi 2022 (67) G.S.T.L. 129 (S.C). On the aforesaid grounds, the Appellant submits that the demand covered under the extended period of limitation and the entire penalty merits to be set aside. 3.2 Smt. K. Komathi, ADC, learned AR for Revenue submitted that the Government of Puducherry had outsourced the activity, which was to be done by them for which they were receiving a concession fee. The entire activities carried out under the concession agreement are in the nature of composite services, and correspond to the provision of Infrastructural Support Services in relation to business or commerce as defined under section 65(104C) of Finance Act, 1994 and is taxable accordingly. She further stated that the Port Department which is a registered service provider who were following the self-assessment pattern and have supressed the fact of receipt of the above taxable value in their statutory periodical returns and the matter was uncovered only after the department investigated the matter based on intelligence. Hence the extended time has been rightly invoked. She prayed that the appeal be rejected. 4. We have examined the matter. It would be he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which gives the essential character in accordance with Section 65A of Finance Act, 1994. The said activity of the Port Department corresponds to the provision of Infrastructural Support Services in relation to business or commerce as defined under section 65(104C) of Finance Act, 1994 and is taxable accordingly. By the Concession agreement, the Appellant has entrusted upon KPPL the rights to develop / operate / maintain the Port including project facilities on a BOT basis. The expression infrastructural support services given under Section 65(104C), includes providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security. None of these services are being provided or to be provided, to KPPL by the Port Department. KPPL has developed the land, built a Port and are offering services to the trading community on the basis of fees fixed by KPPL. This contractual permission by the Port Department to KPPL for setting up and running port facilities cannot be termed as support services of business or commerce, to be taxed at the Port Departments hands. The concession ..... X X X X Extracts X X X X X X X X Extracts X X X X
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