Port services - services like sampling and analysis, cargo handling and storage, terminal handling, issue of bill of lading etc. - whether can be classified as port service?

PJ/Case Laws/2012-13/1029

Case:ARIHANT TYRES & MARBLES PVT. LTD. V/S COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II

Citation:2012 (25) S.T.R. 235 (Tri-Del.)

Issue:- Port services - services like sampling and analysis, cargo handling and storage, terminal handling, issue of bill of lading etc. - whether can be classified as port service?

Brief Facts:- Appellants manufacture excisable goods and export them. They availed credit on service tax paid in input services used in such manufacturing processes and claimed refund of accumulated cenvat credit as provided in Notification No. 41/07-ST. The appellants made a refund claim relating to service tax paid on “port services” and “other port services” charged to service tax under section 65(105)(zn) and 65(105)(zzl) and transportation of goods by road from factory to ICD and transportation of goods by rail from ICD to port of export.

Revenue was of the view that credit in respect of transportation of goods could not be correlated to exported goods because the description and marks of the goods as per the transport documents and as per the shipping bills were not matching. Revenue’s case is that no document or declaration as specified condition at Sl. No. 11 of the schedule to the notification no. 4/2007 has been submitted by the exporter along with claim. Further it was noticed that they claimed refund of service tax paid on Terminal handling charges, documentation charges, bill of lading charges, stuffing charges, etc. by classifying it under head ‘port charges’ which services cannot be so classified. Therefore, a show cause notice was issued to the appellants proposing to deny the said refund claim.

The Adjudicating Authority relied on the decision in the case of M/S. EPLP PII decided by the Commissioner, Kanpur that bill of lading charges and terminal handling charges would fall under port services and accordingly sanctioned a refund for the same. He denied refund in respect of GTA services.

Aggrieved by the above, Revenue filed appeal with the Commissioner. The ground of the appeal was that service like sampling and Analysis, cargo handling and storage, terminal handling, issue of bill of lading etc. cannot be classified under port service and therefore, the claim cannot be granted unconditionally. The Commissioner agreed with the contention of Revenue, ordered recovery of amount of the claim earlier accepted.

Aggrieved by the above order, the appellants filed this appeal

Appellant’s Contention:- The appellants are relying on the decision of the Larger Bench of the Tribunal in the case of WESTERN AGENCY V. C.C.E., 2011(22) S.T.R. 305 holding that all the services provided within the port area in relation to vessels and goods will be classifiable as “port services” and , therefore, the order of the Commissioner is not sustainable

Reasoning of Judgment:- The Tribunal held that the ratio of the decision basically is that for a service to be port service, the service provider need not be acting as an agent of the port. The emphasis is that the service should be provided within port area and that service should have been in relation to goods or vessels. Impugned order set aside.

Decision:- Appeal allowed.

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PJ/Case Laws/2012-13/1029

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