Custom, Excise & Service Tax Tribunal
Indus Marine Private Ltd vs Commissioner Of Service Tax, Mumbai on 3 March, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. ST/91/08 (Arising out of Order-in-Original No. 24/Commr (AK)/08 dated 19.3.2008 passed by Commissioner of Central Excise (Adjudication), Mumbai) For approval and signature: Honble Mr. P.G. Chacko, Member (Judicial) Honble Mr. Sahab Singh, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Indus Marine Private Ltd Appellant Vs. Commissioner of Service Tax, Mumbai Respondent Appearance: Shri Bharat Raichandani, advocate, for appellant Shri Manish Mohan, SDR, for respondent CORAM: Honble Mr. P.G. Chacko, Member (Judicial) Honble Mr. Sahab Singh, Member (Technical) Date of Hearing: 03.03.2011 Date of Decision: 03.03.2011 ORDER NO Per: P.G. Chacko
This appeal is directed against a demand of service tax amounting to over Rs 2 crores for the period from 16.7.01 to 30.06.02 under the head Port Services and also demand of interest thereon and a penalty of Rs 500/-. After examining the records and hearing both sides, we note that the above demand is on the charges collected by the appellant for activities like chipping, cleaning, painting etc done on marine vessels within port premises during the aforesaid period. The adjudicating authority classified the activities as Port Services under Section 65 (105) (zn) read with Section 65 (67) of the Finance Act, 1994.
2. The learned counsel for the appellant submits that, for the same activities undertaken with effect from 1.7.2003, the appellant is paying service tax under the head Maintenance or Repair Service under Section 65 (105) (zzg) read with Section 65 (64) of the above Act. It is submitted that such payments of service tax are being accepted by the Revenue without any objection. The learned counsel has also placed on record various decisions of the Tribunal, High Courts and the Supreme Court in relation to Port Services. In this connection, particular reference is made to Homa Engineering Works vs Commissioner of Central Excise 2007 (7) STR 546 (T), wherein it was held that the repairing (including chipping, cleaning, painting etc) of marine vessels within port premises would not be covered under Port Services defined under Section 65 (82) of the Finance Act, 1994. The decision was appealed against by the department. Central Excise Appeal No. 67/2009 filed by the department was admitted by the Honble High Court on 16.9.2009 on the following question of law:
Whether in the facts and circumstances of the case and in law the Tribunal is justified in holding that the services of repairing, chipping, cleaning, painting etc. rendered by the Respondent on the vessel at Mazgaon Docks Ltd do not fall within the meaning of Port Services as defined under Section 65 (82) and Section 65 (105) (zn) of the Finance Act, 1994?
3. The learned counsel further submits that the provisions relating to Port Services have been further amended under the Finance Act, 2010 and accordingly, Port Service means any service rendered within a port or other port, in any manner vide Section 65 (82) of the Finance Act, 94 as substituted with effect from 1.7.2010. After the said amendment, the taxable service means any service provided or to be provided to any person, by any other person, in relation to port service in a port, in any manner vide Section 65 (105) (zn) of the Act as substituted with effect from 1.7.2010. By virtue of this amendment, the subject service has come to be recognized as port service with effect from 1.7.2010. Counsel has also argued that, from 1.7.2003 to 306.2010, it was to be reckoned as repair or maintenance service. It is further argued that, for any period prior to 1.7.2003, it was not taxable under any pre-existing entry under Section 65 of the Finance Act, 94. In this connection, the learned counsel has relied on Indian National Shipowners Association vs UOI 2009 (14) STR 289 (Bom) and a few decisions of the Tribunal which followed Honble High Courts view.
4. The learned SDR is of the opinion that the present appeal must wait for the outcome of the Central Excise Appeal No. 67/2009 pending before the Honble High Court, wherein identical question of law has been framed for a decision by the Honble High Court.
5. After considering the submissions, we are of the view that the adjudicating authority, rather than the Tribunal, can afford to wait for the Honble High Courts decision in Homa Engineering Works case (supra) inasmuch as that authority appears to have taken a view against the assessee merely on the strength of a Circular of the Board viz. Circular No. 67/16/2003-ST dated 10.11.2003 without considering the judicial authorities on the point cited by the party. Now that the Honble High Court has framed the relevant issue for a decision in the case of Homa Engineering Works (supra), it will be appropriate for us to remit the case to the learned Commissioner. We, therefore, set aside the impugned order and allow this appeal by way of remand with a request to the learned Commissioner to take appropriate decision on the substantive issue and ancillary issues after the Honble High Court settles the question of law framed by it in Home Engineering Works case. It goes without saying that the assessee should be given a reasonable opportunity of being heard.
(Pronounced in Court) (Sahab Singh) Member (Technical) (P.G. Chacko) Member (Judicial) rk 1 5