Karnataka High Court
The Commissioner Of Central Excise vs M/S Konkan Marine Agencies on 13 March, 2008
Bench: Deepak Verma, Anand Byrareddy
in mm man coum or KARNATAKA AT nmaapom
DATED mm mm 13" pm or WW-'-ff%'te K
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THE I-lON'BLE MR. Jua,*ri"c:E« pmmrgji
AND.
.E..: HQH'.i3.!:..: MR; e. ;I__;.!Q 1'5 BEVRARE 'I!
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The Commissioner of Central Extcfise-,=._V0V"
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" 0 ~rrh:'s*c:;E.A. filed under Section 35-0(2) of the Central Excise
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Order No-§E8.4/2007, praying to decide the substantial question of
law s!,}atcd.--~" therein, set aside the final order No.884/2007 dated
06.08.2007 passed by the CESTAT, South Zonal Bench,
AA Mangalbm, vide Almexure-"E", restore the order-in-revision
NQ05! 2006 CE dated ._'28.0?l2006 pegged by the Commisgioner of
"central Excise, Mangalone, vidc Annexune --- 'D', in the interest of
'. I I I
:j'%iS'n.'.1C€ and €i'1'u':1t_'y'.
"i"i:u's coming on for Admission this day. Beepai
Velma. J. , delivered the following: _1
"VD
JJLD_Q_lLE_fll'
Heard Sri.C.Shashikant11a, learned counse1._epiiesi1jingV.ior the
appellant, on admission. Records %
'2. This appeal has been 3 under:
Section 35-G(£2) of the Cent:s11.._]i)xcise _ Act, 1?Jfi4:A: shall
be referred to in short as tiieD"Act")i--' the order dated
06.08.2007 passed "~E»xci.se Service 'Tax
Appellate Tiibunal, ..'tCES']'A'i') in assessee's
Appeal
3. _Asses'see tip15ee--.1.ageinst the ontler in revision dated
20.12.2005 .15sss:::<f1s._b'ys,:_'tne 'Commissioner of Central Excise,
Mangaloie, "
V' _ ;}?ac'tszwhich'i;ie in narrow compass. are as under:-
V "For the period commencing from
j_ M9 In
java v .n.
2004 to September 2004, esse see
had paid service tax and interest amounting
to Rs.4,79,397/- under different challans
under the category of "port service". The
assessee had filed a refund claim for refund
of service tax and interest paid for the
,.--.L
'L'?
aforesaid period and for the aforesaid
amount. The reasons for assessee's V,
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on
of export cargo has "bee.n-. '_ excn1;oted._ I'
payment of service the 17-:
"cargo handling ' setvice"-,_andV asst' 'theymhadvi
erroneously paid 'Vsefvice ta5t~.onesi1c]"3: export
cargo i1andied_«"'Dy 'T'i1e"~ itssistant
€lo'm....m*ssiooer,, L visit': order dated
o4.o3.2oo5n ,nejected claim on the
gxonnjci that assesseehas been rendering
the it-V.se_V:'vices__ 'exc-lnsivewly within the port
____ H service rendered by the
'A ' ''as_sessiee classifiable under the
.._...+.=....... ..
pexscgufj *o_f'f'I-'{:'t Se:-"cc" and tiaere i" no
oayment of service tax 1.1.- der
. A' _
it tbexsaid category in respect of export cargo.
Against the said order, assessee
'Q I n
: fvpg 1'. ft 11-.
Fiiy-Iezzud an appeal befo... the uG:"P.u.n1SS1Gi'iCI'
ffipneals). The Commissioner (Appeals) after
4' hearing both sides, remanded the matter to
the adjudicating authority for determining
the nature of service tendered by the
assessee as to whether it is a "port service" or
ytI1ej'v--.s'i1o-imoto -revision a_g,,m._t t._c
I:;:,D_f adj-udieating authority and
_ieSued__"'wynotice.__. to the assessee.
the records of service rendered and 'ohflle
raised, etc., and applying the princi§Sie's:"oj'of 2.
nateart-' j"sti"-e, adjudicating A ~
P . .
decid_d -_.. m..a--..r in fuvom ofraaaeeeee
and classified it as
and further holding that itiwgmangtbe
for payment of' service Vonf:
However, the refund was -not _di1ectet:'i§ to be
"e :rffio1nniiss'ioirer exercised the power
erred on underfieee ion 84 of th" " *-
The
-- = "of Central Excise. Mangalore,
whne eecidiingii the revision noted that as per
t11;e~.._gi.-mviione of stat: te, service shtuiu be
provided by port or a pera_n a1.1t11--Lz.,d by
not by a port on an authorized agent
-.oV1A"o:=1ii\ort rendering service on behalf of the port
' -V as contended by the assessee. Accordingly
the order of the adjudicatjng authority was
accordingly the refund of the assessee of the
sum of Rs.4,'79,39'7/- stood rejected.
"M
Assessee feeling aggrieved by thessid
order passed by the Commissioner": A'
__e CE- V
The CESTAT after hear-*:g E16 1:;-.I.E"T'1"S,
rendered by thesssessee woiild»v.Vno:td'an1cunt
to "port service". .other words;'s.ccoj1di11g to
the CESTA? it Wo11_lde---only'-be "cargoihandling
service". In 'any .j'cgise,--" icsssessee would not
co-fe -- .f"'fhit; ofisxaiion as
-esI;Lct ..'f cs-,rg.. 1'-..,__11r..;."ngVw"se11.rice, especially
meant for export is
-------- ihepurview. Thus the order of
__ the rcomsniissioner was set aside with
-- consef1uentis1«.refie£ Now this appeal by the
2 , A 'Revenue, the said order under Section
35.352} of t1:-..e Act.
' accordingly heard the learned counsel for the
'apiJe]1snt;'Pemsed the records.
A 6. H vfiiection 42 of the Major Port Trust Act, 1963, which is
V. to be discussed, is reproduced hereunder:
"(1) A Board shall have power to
undertake the following services):-
'76'
- ..;'. ...-- .'."Lj.:';._1.."
"'v.l;ii;l.3' Le')
raiiways, or vice vcrsa,
(a) landing. shipping or
passengers and goods between vessels"
port and the Whaxves, piers, qua}-not-.c1ceka. 1 V'
belonging to or _in 1:_11e»_posse§sion':.ci'~ 111:
Board;
(b) mceavnzg. 'feniotringgj
transporting, or goods
brought wiflzgm the"Boé3fd';-3 .pmmises;
V (c) by rail or by
911331;":-me£L11sVVliniits of the port or
...$:rJ4'rt3Qj:£_a':;1:.r_'r_)rcJ':z.atcul'1::§s, subjected' such 1\estrict1'ons
V a1*1ci;»'Q:Vconditicns,_ fish tiie VCen1::ra1 Government
"£-
' «V 9 --- and delivering,
.. tra 1] "end booking and despatchjng
: ;._1_ __ _ ___4
gob-:i5__01i;ginating in the mssel'
...I
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nded. for c9.rn2-.ge by 1 2-; new
A Ve£dn1m' istration under the Indian RaJ1w' ays
Act, 1890 (9 of 1390);
{E3 pfl--ti.I1.g;
'I
hauling,
nemooring, hooking, or measuring of vessels
_1_nooring,.
or any other service in respect of vessels, and
'76
it herriter into any
sub-ieection (3), a Board may,
(1) developing and providing. suhject
to the previous approval of the -«A4
f'.'.rnurA:~r| nmanf in I~(:u:rI-~rvn-Inf-|11~4a
V-J\IVIu'l .1111-[loll-I»,
ports.
(:2) A Board may, 1:53Véi'ii*t1.afi=:'..;
owner, take charge oi'._the gooda _:the
purpose of performing the origaertvices
.......1 ...1.....11 ..:.... .. _..§,.,.;;;...{4".,:..
eruu aueu.r-- Vt: uptu.-*.oc pl. ;_
.....,'."|'..-.4'........'.' .... 41....
:9 uu. 212-:.,u.1 era urc
Board may ' V '4
(Sf V_ contain' ed in
Section,_ the may, with the
vine' ' $!':t\'I';':I'.! . .3-5' I-'nu-|I*|~ra' ritsirni-nrn
" -. _ "authorise'--any person" to perform any of the
.eersiices,,n1entioned in sub-section (1) on such
' _ "conditions as may be agreed upon.
'13
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III .
1'1
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3
previous approval of the Central Government,
agreement or other
arrangement, whether by way of partnership,
joint venture or in any other manner? with,
any hwy corporate or any other person to
perform any of the services and functions
assigned to the Board under this Act on such
terms and conditions as may be agreed upon.
_p._._
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~F'¢m-vi'1a'+i'&~u.\ ' ~-.. fr.»
lEI\-'£1-I cap -..ewa___ _
V 1 ii'l.u"' '1 DD 1 "L A
(4) No person authorised under sub:
section (3) shaii charge or recover for
service an'; s'........"" in excess of t.'.=.:.=:§W.r'=-.'r.'-'»;i..-i*';"-.',=.«:1.'1"ti.~
specified by the Authority, by noptificationi"_in'
the Oflicial Gazette. *
0
tar
as .
3:,'
3
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ID
-rs
take
charge of 'thej«goods agivieva receipt in such
form as the BoaV1di'vniay speci_£y."
(Ca) if!"-'."l:ne of such person
I '3V'..1os's,j;;riestiiiction or deterioration of
''''gooci':+;;:_of '' taken charge shall,
_ .A 1s'nbjectA_other provisions of this Act, he
i « fl1atvo'f_ija_Baiiee:'under Sections 151, 152 and
Q'-
b.(7) A any goods have been taken charge
*.._of and a receipt given for them under this
aeefflon. no iiabiiity for any ioss or damage,
'I " 'I'f|lT|I'l' .nrv111rI 1-n 1'1-uarn n'|-H311 nfianh in (51111
IA} Inlnl-'J 31-'Tull ntml' U'-J 5'-IJJ
I'V.l..I..l\dluI- I-|:l.CI.y \l\d\--'I-ll I-I-I,
person to whom a receipt has been gven or
to the master or owner of the vessel from
which the goods have been landed or
transshipped."
7. Bare perusal of the aforesaid Section makes ithiexystal clear
that some of the services mentioned in the ijnay not be
exhaustive are to be performed by the port but-in pan is
desirous of rendering any of the sei*vice'--«mentioned ' the
s-_Li_n -1" any cth-r se-.1_.e i__ a_.n.d.it1.-n t- . sn = rr-rt ca
authcr"'e to -"ve it to any oth**3: 1;-'sr"*n, ""t..'1_t.'i'e 'pr'v'ous San'-'"on
of the Central Govemment. inandate under sub-section
(3) of Section 42 of power, Port has issued
a Stevedoring Licence 1t:siiondent - assessee. The
Stevedoiing' themassessee by New Mangalore
Port Mangaloxe Port Rules, 1976
read iwith " Department of Surface 'I'ransport_.
Inistrv""o_1.f "T_1a1*;spcrt, ~.Ciov-m.m.ent of Indi..'s 1\!-ma..ion dated.
_.........'----J
land
A :1 ti arms: V"
fil .I. :'uL)u
' a. tjecoxded a finding that the service which was being
rendered' the assessee cannot be said to be service on behalf of
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the port. In other wows, 1t held that the asessee renuem...
.s*i'~ii"es dii'ee"'37 to customers for the purpose of ioading of
Viexporl: cargo and not on behalf of the port, but on its own behalf.
_,._--'
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9. Learned counsel for the appellant also placed reliance on the
Circular issued by the Central Government to
contend that such a service rendered by the
service tax. To put the point :scro'se
se_ .i_e, For ready re£ere__ce _ __ __
AI'. I-11:1: 4-gr-aqua: 1-:1-an 1'£?l'l!4'|'.P"I1.Vl"5QA1 1-Inc-ug-a 'i-._'l.-'syn.
Ll U13 Jul LIL I.-I-lclfi Va. 5 all; lC1J.l-LI\.3_I.I.Lr"5LI. '_ . u
"5. provided
the port service will be
covered offport services or
_ context it may
1 ;e;.;e1t+ao:;e;:t1;a: services cover any
""" H '._"i'*'VVrela'tion to goods or
' V 4. _ h h r a person eJ.rt11.ort.'2ed by
rrhe"'pg"1r; to resist includes the cargo handling
it.' service provided within the port premises.
Therefore' to this extent there may be an
'ficverlap in cargo handling service and the port
service. "owever since port services covers
L' the service in relation m 15%.': and vesss-'==
and therefore more specific to port, the
service provided in a port in relation to
handling of goods would be appropriately
covered under port service and no separate
levy wiii be attracted under the category of
<--.-4
W)
the
cargo handling agency service. Similar would
be the case in respect of service p1'ovided:"Ljfor~v.4
storage of goods in the port prcmiseéa. ff
6. All goods meanvt-for-expcéi'r'sre'c.exciuded
from the scope of t11is'».1ev3{." .. so' A V V' dd
10. However, after going Pains hand» 6, W
find firt
Para 6 clearly shows that allifioovds inegant ior"ex1jon are excluded
from the scope of levy
1.... 2 .....m
11. it uni nu; V-
engaged 'the-'_ .o"f"cargo' handiing and especiaiiy for loading of ca1d1IgoAV for _ If that be so, even this Circular does not helpthe manner whatsoever.
___ 1. _. .._ Cargo hécndling so vice 11 :1: been defined in Section 65$-.'3) in » iiflie Financeact, 1994. The said definition reads as under:
"Cargo I-!s=md11'fi loading, unloading, packing or unpacking of cargo and includes cargo handling services provided for freight in special containers or for non-containerised freight, services provided by a container frcighi: terminal or I31) any other freight terminal, for all movclesjof transport and cargo " A incidental to freight, but does riot 1 "
handling of export cargo 'cor' " ltiasisenger 'oagg' ge or rnere tnansporfffion' T'f"'A("Jti?I_('.'1"S..."~._L
14. ban: reading of flieii-.aii:xesaid c1_efinition:._:fu:'th"er makes it attr-art sefirce tax 't all. after h'vi'r" ..g***e thr"'"'h th" '""or"s'"'d definition, it leaves noiiami ti-nut Aof._dot3ht' our mm' d that such a service tax.-«eonlflnotvhave __beei1 [ievieclflon the assessee which was export purpose.
15. We that the definition of "port service" as fountl in S'ectionVtV35(t3_2)'oi' the Finance Act would not be applicable facts oiiithe----present case. The definition of "port service"
i tends' as ixnclerz "Port Service" means any service mndered by a port or other port or any person authorised by such port or other port, in any manner, in relation to a vessel or goods." *-Eb
16. According to the learned counsel for the appellsint since the assessee is a licence holder, therefore he Wou_1d_'4"" person authorized within the definition of "port ser£ri::c:e"jV'sz~:1s"ii1<v:'xIitioI:1ed hem-inabove.
17. We do not agree to fltevaaforcsatidi coni'enticnsHVadvenoe¢1 by the learned counsel for appel1zint.VVfor" thed simvfiale mason that definition of "cargo se2t1}ic.e-'Isiah reproduced hereinabove and Section 65(2_3) clea:ty:i'putsV._Va to the imposition F F In in t{".or'}j-;-x1go.'; wlhiéh ..;1-.._.."i;.;c--..1€.1es h.=.=.n..li..g of t...e expo"
18. {In viewof~ there is no scope for interference in the 'order of Appeal being devoid of merits ayyqlbw substance, dismissed in and the order passed by A i:3.F3S:T£i'P.stands"confiImed.
Sdf--__ Judge