Port
service
CESTAT,
BANGALORE BENCH
New
Mangalore Port Trust
v.
Commissioner
of Service Tax
Dr.
S. L. Peeran, Judicial Member
And
T. K. Jayaraman, Technical Member
Final
Order No. 1020/2007
In
Appeal No. ST/120/2006
September
3, 2007
Section 65 of the Finance Act, 1994 - Port service - Period July 2001 to March 2004 - Assessee had its port railway yard - Railway siding charges were received from the railways by assessee towards utilization of port railway yard on which railway sidings had been constructed - Railways collected these charges on behalf of assessee and remitted some to assessee - Service tax was demanded from assessee on said charges received by it under category of port service - Whether in view of facts and circumstances of case, it was clear that these charges did not represent money received by assessee for any service rendered by it - Held, yes - Whether since railway siding charges collected for use of infrastructure put up by assessee was not in relation to vessels or goods and assessee also did not collect these charges from users in these circumstances, demand of service tax in respect of railway siding charges was not in accordance with law - Held, yes [Para 4.2]
The assessee had its port railways yard. The railway collected railway siding charges from the users and remitted the same to the assessee. The revenue proceeded against the assessee on the ground it did not discharge the service tax liability on the railway siding charges received by it for the period from July, 2001 to March, 2004 and the adjudicating authority confirmed the demand at service tax, under category of port service. The Commissioner (Appeals) also upheld the order of the adjudicating authority
On appeal:
The railway siding charges were received from the railways by the assessee towards utilization of the port railway yard on which railway sidings had been construction. The railways collected these charges on behalf of the assessee and paid it to them. Therefore, it was very clear that these charges did not represent the money received by the assessee for any services rendered by it. Alternatively, it could not be held that the railway siding charges have been received for port services rendered by the assessees. The agreement related to the collection of railway siding charges by railways. Moreover, the Commissioner himself had stated that these charges were different from railway haulage charges, which are included in the charges relating to port services. Further no strong reasons were found for invocation of longer period and there was no proof for suppression information by the assessee. The railway siding charges collected for use of the infrastructure put up by the assessee was not in relation to vessels or goods. The assessees also did not collect these charges from the users. In these circumstances, demand of service tax in respect of the railway siding charges was not in accordance with law. The impugned order had no merits. Hence, the appeal was to be allowed. [Para 4.2]