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Gujarat High Court

Seaworld Shipping & Logistics Pvt. Ltd. vs Bahrain Vision (Imo 9468449) on 29 November, 2018

Author: R.M.Chhaya

Bench: R.M.Chhaya

        C/AS/16/2017                                           IA ORDER



           IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

             CIVIL APPLICATION (OJ) NO. 1 of 2017
             IN R/ADMIRALITY SUIT NO. 16 of 2017
==========================================================

SEAWORLD SHIPPING & LOGISTICS PVT. LTD.

Versus BAHRAIN VISION (IMO 9468449) ========================================================== Appearance:

MR MANAV A MEHTA for the PETITIONER(s) No. MR. JAIMIN R DAVE for the PETITIONER(s) No. MR KAMAL TRIVEDI, SR. ADVOCATE with MS PAURAMIB SHETH, ADVOCATE with MR. PRASHANT ASHER,ADVCOATE and MS BULBUL SINGH RAJPURHOIT, ADVOCATE for the RESPONDENT(s) No. ========================================================== CORAM: HONOURABLE MR.JUSTICE R.M.CHHAYA Date : 29/11/2018 IA ORDER
1. This court vide order dated 30thMay 2017, granted arrest of the Defendant Vessel for Plaintiff's a claim in aforesaid suit towards alleged outstanding service tax liability of Rs.3,54,97,061 along with interest amounting to Rs. 3,64,57,713 and legal costs and expenses amounting to Rs. 10,00,000 aggregating to Rs.

3,74,57,713. Pursuant to the said order the Defendant Vessel has been taken under arrest.

2. One S5 Agency World Limited, being an interested party in the Defendant Vessel and in order to mitigate their losses and for release of the Defendant Vessel entered appearance and filed purshish for passing appropriate orders. This court passed order dated on 6th June 2017 as per which S5 Agency World Limited made a cash deposit of Rs. 3,74,57,713 by way of Cheque Page 1 of 10 C/AS/16/2017 IA ORDER bearing No.164409 dated 06.06.2017 drawn of Bank of India, Navrangpura Branch towards suit claim (including claim for vessel Norgas Napa, which was not included in the plaint) inclusive of interest calculated upto 08.06.2017and costs without prejudice to their right and contentions, for securing release of the Defendant Vessel. Further, one Mr. Param Jit Sehdev, authorized signatory and Divisional Business Controller of S5 Agency World Limited filed an undertaking to the Court that S5 Agency World Limited shall deposit interest at the rate of 2% per month on the principal claim of Rs. 3,54,97,061 amount every four months from 06.06.2017. Furthermore, the undertaking indemnified the Plaintiff/Applicant in the event of any misdeclaration made by Norgas Carriers Pvt. Ltd or S5 Agency World Limited in computation of service tax liability provided by them.

3. Further to the said order, the Plaintiff filed aforesaid Civil Application praying the following:

a. Direct the Registry of this Hon'ble Court to pay Rs. 3,74,57,713 along with accrued interest thereon deposited by the Respondent herein and/or its disponent owner and/or her agent to the Applicant with the direction to the Applicant to deposit this amount with the Page 2 of 10 C/AS/16/2017 IA ORDER Service Tax Department of the Government of India, without making any deduction, within two working days of receiving the monies in their account, through the service tax code allotted to the Applicant.
IN THE ALTERNATIVE b. Direct the Registry of this Hon'ble Court to pay Rs. 3,74,57,713 along with accrued interest thereon directly to the Service Tax Department under the service tax code of this Applicant herein with a view to ensuring that no further interest accrues;

4. Mr. Kamal Trivedi, Sr. Counsel appearing with Ms. Paurami Sheth, Ld. Advocate for S5 Agency World Limited states that as per undertaking of Mr. Paramjit Sehdev dated 06.06.2017, a sum of Rs. 1,27,78,942 is required to be deposited, the same being the interest at the rate of 2% per month from 06.06.2017 till 06.12.2018. However, an amount of Rs. 1,34,97,092 deposited towards interest which is calculated from 06.06.2017 to 06.12.2018 vide Pay Order No. 034263 dated 20.11.2018 on 22.11.2018.

5. It is also submitted by the Ld. Counsel for S5 Agency World Limited that on 31st May 2017, one Chemplast Sanmar Limited, who were the cargo receivers of the cargo carried on vessel Norgas Orinda (3 calls) have directly paid an amount of Page 3 of 10 C/AS/16/2017 IA ORDER Rs. 64,22,085 to the service tax authorities and tenders e­receipt for the service tax paid for which S5 Agency World Limited reserves its rights to claim adjustment or refund with the Service Tax Authority as and when required.

6. The Counsel for S5 Agency World Limited further states that they have instructions to consent for limited purpose for deposit a sum of Rs. 3,74,57,713/­ being the security furnished by S5Agency World Limited with this Court for release of the Defendant Vessel and interest accrued thereon together with further amount of Rs. 1,34,97,092/­ deposited on 22.11.2018 without prejudice to their rights and contentions to the Service Tax Authority having jurisdiction over the subject matter. The Counsel for S5 Agency World Limited submits that the consent for release of the payment is subject to the following:

a. S5 Agency World Limited is consenting to make above payment to the Service Tax Authority under protest and S5 Agency World Limited and/or their principals and/or managers and/or owners of the Defendant Vessel reserve their right to challenge such payment by initiating appropriate proceedings, including but not limited to challenging the notifications vide which the Government of India withdrew exemption Page 4 of 10 C/AS/16/2017 IA ORDER on service with respect to services rendered by way of transportation of goods by foreign vessel from a place outside India up to the customs station of clearance in India.
b. S5 Agency World Limited denies that the present claim constitutes a maritime claim. The payment by S5 Agency World Limited to the Service Tax Authority shall not be deemed as waiver of any action or claim which S5 Agency World Limited and/or their principals and/or managers and/or owners of the Defendant Vessel have against the Plaintiff. S5 Agency World Limited and/or their principals and/or managers and/or owners of the Defendant Vessel reserve their right to pursue their claim against the Plaintiff, including but not limited to claim for wrongful arrest, counter claim, loss and damages etc. c. S5 Agency World Limited had provided an undertaking to deposit interest at the rate of 2% per month on the principal claim amount of Rs. 3,54,97,061 at the end of every four months from the date of the release order and accordingly deposited the amount of interest calculated upto 06.12.2018. In view of the entire desposit being made to the Service Tax Authority, S5 Page 5 of 10 C/AS/16/2017 IA ORDER be discharged by this Hon'ble Court from the said undertaking.

d. S5 Agency World Limited reserves its rights to claim adjustment or refund of the amount of Rs. 64,22,085 deposited on 31st May 2017 by one Chemplast Sanmar Limited, who were the cargo receivers of the cargo carried on vessel Norgas Orinda (3 calls) with the Service Tax Authority as and when required.

e. S5 Agency World Limited undertakes to indemnify the Plaintiff in the event any misdeclaration made by Norgas Carriers Pvt. Ltd or S5 Agency Ltd. in computation of service tax liability provided by them. S5 Agency World Limited undertakes to comply with the order dated 06.03.2018, whereby parties were required to give necessary details including documents, invoices, as available with them to the service tax department, for taking forward the process of assessment and complete the same. In the event of the assessed service tax amount and the interest thereon turning out to be more than what has been paid, so far, S5 Agency World Limited would still continue to be fully responsible for discharging such liability, including penalties, if any imposed by the service tax department on the plaintiff/applicant and their sub­ Page 6 of 10 C/AS/16/2017 IA ORDER agent, vis­à­vis the service tax department.

7. Registry is directed to accept an amount of Rs.1,34,97,092/­ which is tendered by the S5 Agency World Ltd., on 22.11.2018 by way of Pay Order No.034263. The Registry is further directed to transfer an amount of Rs.3,74,57,713/­ along with accrued interest and the Registry shall also further transfer an amount of Rs.1,34,97,092/­ deposited today to the Service Tax Authority by issuing cheque in the name of SBI E Tax Account and hand over two cheques to advocate of S5 Agency World Limited which will be deposited using the plaintiffs/applicants service tax registration number AAGCS8214FST003 (Service Tax Amount Rs. 53,75,432/­) and that of their sub­agent at Cuddalore - M/s. A.D. Jeyaveerapandia Nadar & Bros. - service tax number AAFJ3044KSD004 (Service Tax Amount Rs. 3,01,21,629/­) as follows:

A/c Seaworld Shipping & Logistics Pvt. Ltd. Service Tax No. AAGCS8214FST003: Rs.53,75,432 + Rs. 21,50,175 = Rs. 75,25,607 A/c M/s. A.D. Jeyaveerapandia Nadar& Bros. (Sub­ agent) Service Tax No. AAFJ3044KSD004: Rs. 3,01,21,629 + Rs. 1,33,07,569 + Accrued interest on the deposit made lying with the registry.
Page 7 of 10 
           C/AS/16/2017                                               IA ORDER



     The      Service       Tax     Authorities                is    directed           to
accept the said cheques on plaintiffs/applicants account and that of their sub­agent at Cuddalore
- M/s. A. D. Jeyaveerapandia Nadar& Bros. and give necessary effect thereof. It is directed that adjustment of the service tax in the present matter would be only towards liability, if any, in the captioned suit and no other past or future service tax liability of the Applicant/Plaintiff and their sub­agent at Cuddalore ­ M/s. A. D. Jeyaveerapandia Nadar& Bros.

8. The above payment is being made without prejudice to the rights and contentions of the parties and the parties are liberty to take such appropriate steps or initiate proceedings as mentioned in paragraph 6(a) and (b) above. It is further directed that S5 Agency World Limited would be entitled to claim adjustment or refund, as available under law,of the amount of Rs. 64,22,085 deposited on 31st May 2017 by one Chemplast Sanmar Limited, who were the cargo receivers of the cargo carried on vessel Norgas Orinda (3 calls) from the Service Tax Authority.

9. In view of the directions passed for transferring the amount lying with the Registry with interest accrued thereon to the Service Tax Authority, Mumbai and Cuddalore the undertaking dated 06.06.2017 of Mr. Param Jit Sehdev, Page 8 of 10 C/AS/16/2017 IA ORDER authorized signatory and Divisional Business Controller of S5 Agency World Limited to deposit interest at the rate of 2% per month on the principal claim amount every four months, stands discharged.

10. Without Prejudice to the rights and contentions of S5 Agency World Limited, S5 Agency World Limited undertakes to pay to the Service Tax Authorities additional amount of service tax and interest thereon, if any, on the alleged service tax liability being the amount transmitted by the Registry of this Court and received by the Service Tax Department till the date of receipt thereof by the Service Tax Department. Further, without Prejudice to the rights and contentions of S5 Agency World Limited, S5 Agency World Limited undertakes to take care of future liability, including interest, penalties or principal amount of service tax, subject to challenge thedemand/notice/order of the assessment of the Service Tax Authorities.

11. It is stated by the counsel for the Applicant that Assistant Commissioner CGST & Central Excise, Mumbai, Mumbai East Commissionerate, Division VI, Range V is the assessing authority for Service tax present claim.The said Service Tax Authority is expected to assess the liability as early as possible. It is therefore directed that on assessment of the service tax Page 9 of 10 C/AS/16/2017 IA ORDER liability by the Assistant Commissioner CGST & Central Excise, Mumbai, Mumbai East Commissionerate, Division VI, Range V, if the above sum or any part thereof is in excess of such assessed liability, the Service Tax Authorities shall refund the such excess amount to the below mentioned account details of S5 Agency World Limited directly. In any case if the Applicant/Plaintiff and their sub­agent receive any refund towards the subject claim from the Service Tax Authorities, the Plaintiff on behalf of their sub agent undertakes to forthwith deposit the monies so refunded with the Registry of this Court, without any deductions. The Registry shall thereafter remit the monies so received from the Plaintiff and/or their sub­agentto S5 Agency World Limited in the below mentioned account details:

Beneficiary: S5 Agency World Ltd. - NLNG Bank name : Deutsche Bank AG Address : De Entree, 99­197 1101 HE -
                                             Amsterdam (The Netherlands)
       Account No:                        NL22DEUT0319830527
       SWIFT or BIC:                           DEUTNL2N
       IBAN NO             :                      NL22DEUT0319830527
The Application is allowed to aforesaid extent.
(R.M.CHHAYA, J) BIJOY B. PILLAI Page 10 of 10