Indian Kanoon - Search engine for Indian Law

(iii) It was claimed that supervision of and responsibility for operation of cranes was more important as maintenance of cranes was the exclusive responsibility of the assessee. Any negligence by the crew in operating the cranes would have rendered the assessee liable to heavy maintenance expenses as well as heavy penalties in terms of the agreement with JNPT. It was, therefore, not possible for the assessee to leave the operation of the cranes to the operators of JNPT or leave the cranes unmanned.

(iv) Cranes were highly specialized and sophisticated equipment costing over Rs. 125 crores. Therefore highly qualified and trained mechanical engineers were deployed for the operation of the crane to produce desired results.

(v) Agreement with JNPT required the assessee to develop, maintain and operate the cranes. Engagement of JNPT operators as crane drivers did not therefore, dilute the responsibility of the assessee from operating the cranes.

(vi) The assessee was liable to pay workmen compensation for any injury in operating the cranes under the Workmen's Compensation Act. It was submitted that though operators were deputed by JNPT to operate the cranes for which the assessee was paying Rs. 40 lakhs p.a., the assessee was nevertheless involved in the operation and maintenance of container handling equipments.

12. He further submitted that the cranes supplied and installed by the assessee were "infrastructure facility" within the framework of its definition as given in Section 80-1A(12)(ca). According to him, the supply, installation, maintenance, etc. of the cranes by the assessee at the port was integral part of the port facilities without which a port could neither be developed nor maintained nor operated. He stressed that the assessee was involved in the development, maintenance and operation of the port through the cranes supplied, installed and maintained by it round the clock at the port. According to the assessee, the very use of the phrase "infrastructure facility" in Section 80-1A(12) would suggest that any facility, like the supply, erection, installation, maintenance, etc. of the cranes, would answer the description of "infrastructure facility" and thus entitle the assessee to claim the relief under Section 80-1A. The assessee supported its submission by referring to the definition of "port" as given in the Indian Ports Act, 1908 according to which a "port" would include any part of the river or channel in which the said Act was for the time being in force. Section 4 of the said Act was also referred to which provided that Ports Act could be extended to include piers, jetties, landing places, wharves, quays, docks and other works made on behalf of the public for convenience of traffic, for safety of vessels, or for improvement, maintenance or good government of the port. Referring to Chapter V ("Works and services to be provided at ports") of the Major Port Trusts Act, 1963, he submitted that the provisions contained in the said Chapter empowered the Board to provide morrings and cranes, scales and all other necessary means and appliances for loading and unloading vessels. It was also submitted that the term used in Section 80-IA was "infrastructure facility" and not infrastructure and hence the facility of cranes provided by the assessee was in the nature of infrastructure facility. He supported the order of the learned Commissioner (Appeals) in relying upon Circular No. 793, dated 23-6-2000 issued by the Central, Board of Direct Taxes.

19. On a bare reading of both the letters issued by JNPT containing the terms and conditions of the contract, it is clear that both the contracts were awarded by JNPT to the assessee for "supply, installation, testing, commissioning, and maintenance" of a specified number of cranes on lease for a period of 10 years at the Container Terminal of Jawaharlal Nehru Port Trust. There is nothing in the aforesaid letters to indicate that the JNPT ever asked the assessee to develop, maintain and operate the port. The mere supply, installation, testing, commissioning, and maintenance of cranes are one thing and development, maintenance and operation of a port are a quite different thing. Supply, installation, testing, commissioning, and maintenance of cranes by the assessee cannot, in our view, be said to amount to the development, maintenance and operation of the port. Cranes are not ports and ports are not cranes either. At the most, cranes are equipments deployed to facilitate the operations at a port. Learned Commissioner (Appeals) says that equipments supplied by the assessee are parts of the port and hence treats them as a port without realizing that even hands or other limbs in a human body are also parts of human body but such limbs or parts are not human beings by themselves. Parts can never be treated as whole of which they are parts. Parts cannot mean whole. When the legislative emphasis is on the "port", we find it difficult to hold that the cranes deployed by the assessee at the port are a "port" by themselves. Apart from the letters (supra) issued by the JNPT, we further find from the Annual Report of the assessee for 1997 that it is not its business either to develop, maintain and operate the ports. In fact, it is the exclusive and statutory responsibility of the JNPT and of none else to run and manage the port. All the three facets, namely, development, maintenance and operation of the port are well entrenched in the running and management of the port by the JNPT. The assessee is a mere service provider to the JNPT by supplying, installing, testing, commissioning, and maintaining certain cranes at the port. Besides, the terms of the contracts as contained in the aforesaid letters issued' by the JNPT as also the fact, that the contract has been awarded under Option "B" make it further clear that the contracts are for mere "supply, installation, testing, commissioning, and maintenance" of the cranes and not for operating the cranes.