Customs, Excise and Gold Tribunal - Mumbai
Gujarat Chemical Port Terminal Co. Ltd. vs Commissioner Of Customs And Central ... on 31 December, 2004
Equivalent citations: 2005(99)ECC672, 2005(180)ELT454(TRI-MUMBAI), 2006[3]S.T.R.555, (2008)13VST192(CESTAT-MUM)
ORDER Moheb Ali M., Member (T)
1. The applicants M/s. GCPTCL set up a port and a terminal to cany on the business of storage of chemicals, resins raw or semi-finished or finished bulk liquid, organic and inorganic chemicals and gaseous substances in addition to other services. M/s. GCPTCL is a minor port at Dahej set up under BOOT Policy of Government of Gujarat and renders on shore and offshore Port facilities.
2. The applicants do not deny that they provided storage services at the material time. Their contention is that such service was rendered as a part of services provided by a Minor Port. The services rendered by a Minor Port were not brought into the Service Tax net till 1.7.2003 and therefore they are not required to pay service tax on the service provided by them. The period of dispute is 16/8/2002 to 30/6/2003. The applicants also rely on Ministry of Finance letter 3.10.2001 which clarified that services in relation to storage and loading/unloading of cargo arc appropriately covered in the category of Port services (f. No. 341/42/2001-TRU dt.310.2001).
3. The exact nature of services provided by the applicant can be summarized as follows: (a) Providing infrastructure for berthing ocean going tankers including bringing such vessels into the harbour (b) Providing facilities to discharge the liquid/gaseous cargo and (c) Storage of such cargo in the tank farms till they are delivered to the importer. For each of the above services the applicant charges the user separately. It is the Department's contention that the applicant has provided storage services during the material time and therefore is liable to pay service tax on such a service. The applicant on the other hand holds that the service of storage of imported cargo is a part of Port Service; that port services rendered by minor ports was not taxable during the relevant period; that the Department is wrong in breaking the total service provided by them as a minor port into various components; and that service tax is not payable by them as storage charges are collected by them as a matter of convenience and not because they are engaged in storage and warehousing.
2. Heard both sides.
3. As per Clause 87 of Finance Act 2002 storage and warehousing includes storage and warehousing services for goods including liquid and gases. The applicants provide storage facilities till the importers clear the liquid/gases from their storage tank farm. The tank farm itself is connected by pipelines through which the cargo is discharged from the tankers. The applicants themselves charge for the service of storage separately as could be seen from the invoices raised by them. The plea that a total service provided by them can not be vivisected into various components is belied as the applicants themselves vivisect the service into various components. The test to be applied is whether the storage service provider also provides security of goods, stacking loading/unloading of goods in the storage area. The applicants pass this test. They are not merely renting storage area in the present case. The next issue is whether the service provided by the applicants is a part of port service in which case they come under providers of port service, The plea is that since the applicants are operators of a Minor Port, their services have not been brought under service tax net till 1.7.2003. We are unable to see much strength in this plea. The tank farm constructed by the applicants is not inside the port premises though closely located to the port facilities. Only those activities which take place inside the port premises are covered under port services and not those which are under taken outside. The applicants plea that what they provide is port services and since they are operators of a minor port they are not required to pay service tax for storage facility created by them is highly debatable. The applicants have not claimed financial hardship though they claimed that it would create undue financial hardship if they are directed to pre-deposit the tax and penalty demanded/ imposed by the department. We have taken into consideration the plea of limitation raised by the applicants prima facie we do not see much forcer in it.
4. The various agreements entered into by the applicants with their users, the legal niceties of the demand will have to be gone into later. The applicants have not made out a strong prima facie case in their favour for total waiver of pre-deposit Under Section 35F of the Act. Having regard to all the points urged by both sides we direct the applicants to deposit Rs. 1.75 crores towards service tax within 12 weeks from the date of this order. Upon such deposit further deposit of service tax along with the penalty imposed by the Commissioner is waived. Failure to deposit the amount directed may result in the dismissal of appeal itself without further notice.
5. Compliance on 2.4.2005.