Custom, Excise & Service Tax Tribunal
Timblo Pvt Ltd vs Commissioner Of Customs-Goa on 22 August, 2025
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
WEST ZONAL BENCH
SERVICE TAX APPEAL NO: 86294 OF 2016
[Arising out of Order-in-Original No: GOA-EXCUS-000-COM-08-2015-16 dated
26th February 2016 passed by the Commissioner of Customs, Central Excise &
Service Tax, Goa.]
Timblo Private Ltd
Kadar Manzil, Margao, Goa - 403601 ... Appellant
versus
Commissioner of Service Tax
ICE House, EDC Complex, Patto Plaza, Panaji
Goa - 403001 ...Respondent
APPEARANCE:
Shri Bharat Raichandani and Ms Neha Chakraborty, Advocates for the appellant Shri SBP Sinha, Superintendent (AR) for the respondent CORAM:
HON'BLE MR C J MATHEW, MEMBER (TECHNICAL) HON'BLE MR AJAY SHARMA, MEMBER (JUDICIAL) FINAL ORDER NO: 86302/2025 DATE OF HEARING: 24/02/2025 DATE OF DECISION: 22/08/2025 PER: C J MATHEW M/s Timblo Pvt Ltd, aggrieved by order1 of Commissioner of 1 [order-in-original no. GOA-EXCUS-000-COM-008-2015-16 dated 26th February 2016] ST/86294/2016 2 Customs, Central Excise & Service Tax, Goa confirming tax liability of ₹ 1,25,01,198 under section 73 of Finance Act, 1994, along with interest as applicable under section 75 of Finance Act, 1994, besides imposition of penalty of like amount under section 78 of Finance Act, 1994, is in appeal impugning the proceedings that had been initiated for alleged short-payment of higher magnitude, including ₹ 1,80,57,700 towards rendering of 'port services' that was dropped. The liability saddled on them, comprising ₹ 3,37,100 towards 'technical testing and analysis' service, ₹ 1,20,46,686 towards 'supply of tangible goods service' (vessel) and ₹ 1,17,412 towards the same service in relation to motor launch, MV Shatixa Mini, pertained to April 2010 to September 2012 and had its genesis in EA-2000 audit of the appellant.
2. The chargeability of tax on the first element was founded on remittance of ₹ 32,72,816 towards 'sampling and analysis' in 2011-12 that was held as liable owing to amendment, effected on 1 st April 2011, in rule 3(ii) of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 by deletion of '(zzh)' therein which had the effect of fastening liability to tax on the recipient of service, despite being rendered on 'iron ore' at Xingkiang, Peoples' Republic of China by M/s Italab (Japan) Limited with whom appellant had contracted on 29th October 2011 for ascertainment of moisture content and ferrous content, as deemed provider of service by location ST/86294/2016 3 in India.
3. Learned Counsel for appellant submitted that the finding was erroneous inasmuch as the impugned amendment in Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 was of no consequence to them with the impugned activity conforming to the enumeration in section 65 (105) (zzi) of Finance Act, 1994 as 'technical inspection and certification service' which continued to be required to be performed in India, wholly or partly, for the levy to crystallise. According to Learned Authorized Representative, the activity, as seen from the invoice and the contract, was chargeable in terms of section 65 (105) (zzh) of Finance Act, 1994. He placed reliance on the decision of the Tribunal in EMI Transmission Ltd v. Commissioner of Central Excise, Nashik [2019 (20) GSTL 259 (Tri-Mumbai)].
4. The decision relied upon by Learned Authorized Representative placed emphasis on the consequence of the impugned amendment on the admitted position that the service, on which tax liability had not been discharged, was 'technical testing and analysis service' and liable to be excluded as having been rendered abroad. Here the appellant had, all along, been insisting that the activity was covered by section 65(105)(zzi) of Finance Act, 1994 and the impugned order rested the finding on conformity of the activity with section ST/86294/2016 4 65(105)(zzh) of Finance Act, 1994. The impugned order did subject the activity to scrutiny but the distinguishment between the two has not been adequately appreciated in the impugned order. Furthermore, while section 66 of Finance Act, 1994 on chargeability to tax cannot but be based on section 65(105) of Finance Act, 1994 with recourse to 'deemed provider' is validated only by the contextual placement in the scheme of section 66A of Finance Act, 1994, the impugned order is bereft of such exercise. With the decision in re EMI Transmission Ltd not applicable here and the adjudication being inadequate, there is need for fresh look at the taxability thereof.
5. The bulk of the demand related to 'self-propelled barges', Shatixia-III and Shatixia-IV, hired out by appellant to Viraf M Bharucha, proprietor of M/s Jag Enterprises, and, comparatively, minor portion to consideration from hiring out of MV Shatixia Mini, a motor launch, to M/s Elesbao Pereira & Sons and M/s Bernhard Schulte Shipping (India), that have been held in the impugned order as taxable for providing of 'supply of tangible goods service' during the period in dispute. It is common ground that the latter activity is billed on 'use basis' and the appellant has not canvassed any defence other than to suggest that they had been under the impression that 'transportation of passengers' was not a taxable activity.
6. The terms of hiring, on usage and 'user specific' movement, ST/86294/2016 5 makes it adequately clear that effective control is not transferred insofar as the 'motor launch' is concerned and the transfer thereof for limited purpose and limited time renders the activity to be taxable under section 65(105)(zzzzj) of Finance Act, 1994 as held in the adjudication order. The claim of the appellant is not tenable as they do not interface with the persons carried on board. We have no hesitation in affirmation of demand of ₹ 1,17,412, along with interest thereon, and penalty to that extent.
7. On the consideration received from M/s Jag Enterprises for the barges, that clarity is lacking. The appellant is in the business of handling iron ore and transportation of the product in inland waterways is intrinsic to the enterprise just as barges are. According to Learned Counsel, ships are not among the enumerations in section 65 (105)(zzzzj) of Finance Act, 1994. While barges are 'self-propelling', they are not just ships but are essential equipment for handling of iron ore. The taxable service itself rests on the fringes of an activity that hovers around sale without excluding 'deemed sale' that, constitutionally, is beyond the pale of taxation by the Union and, consequently, is marked by delicate balance found in the expressions deployed. The arguments of the rival sides verge on the extreme with Learned Authorized Representative pressing for taxation of every related consideration except actual sale and Learned Counsel harping on exclusion from the impugned tax by having subjected themselves ST/86294/2016 6 to tax on sale. Taxing jurisdiction is not a buffet offering; the letter of the law must prevail. At the same time, the constitutional restraint on taxing powers of the Union must influence the scope of the impugned taxable service without facilitation of subterfuge in pursuance of tax arbitrage and characteristics of the tax system that may permit refund to escape liability between the two taxes. The facts matter and the intent of the law provides the backdrop for fitment as taxable service.
8. The impugned order has not examined the contractual terms in the context of the decision of the Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd v. Union of India [(2006) 145 STC 91] and, in particular, exclusive use by the transferee and exclusion of access to transferor. The decision of the Tribunal in Express Engineers & Spares Pvt Ltd v. Commissioner of Central GST, Ghaziabad [2022 (64) GSTL 112 (Tri-All)] was not available as guide to evaluate taxability of the activity. Furthermore, the terms of the contract that, while establishing reporting systems, inherently impacts extent of relinquishment of effective control by transferor which is the thin end of the wedge between sale and 'deemed sale' has not been considered in determining taxability. In the absence of informed adjudication, we are unable to adjudge the findings for being legal and proper.
9. In the circumstances, it would be appropriate to set aside the demands of ₹ 3,37,100 towards 'technical testing and analysis' service ST/86294/2016 7 and ₹ 1,20,46,686 towards 'supply of tangible goods service' (vessel) for remanding back to the adjudicating authority for fresh determination while upholding the remaining portion of the order.
10. Appeal is, accordingly, disposed off.
(Order pronounced in the open court on 22/08/2025) (AJAY SHARMA) (C J MATHEW) Member (Judicial) Member (Technical) */as