CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST ZONAL BENCH : AHMEDABAD
REGIONAL BENCH – COURT NO. 3
SERVICE TAX Appeal No. 10541 of 2013-DB
[Arising out of Order-in-Original/Appeal No 09-VDR-II-DHIL-PORT-D-BRH-ADJ-COMMR- 2012-13 dated 14.12.2012 passed by Commissioner of Central Excise-VADODARA-II]
Dahej Harbour And Infrastructure Limited
VERSUS
Commissioner of Central Excise & ST, Vadodara-ii
WITH
SERVICE TAX Appeal No. 10128 of 2014-DB
[Arising out of Order-in-Original/Appeal No VAD-EXCUS-002-COM-08-13-14 dated 15.10.2013 passed by Commissioner of Central Excise, Customs and Service Tax- VADODARA-II]
Dahej Harbour And Infrastructure Limited
VERSUS
Commissioner of Central Excise & ST, Vadodara-ii
AND
SERVICE TAX Appeal No. 10540 of 2016-DB
[Arising out of Order-in-Original/Appeal No BHR-EXCUS-000-COM-016-15-16 dated 31.12.2015 passed by Commissioner of Central Excise, Customs and Service Tax-Bharuch]
Dahej Harbour And Infrastructure Limited
VERSUS
Commissioner of Central Excise & ST, Vadodara-ii
APPEARANCE :
Shri Jigar Shah & Shri Ambrish Pandey, Advocates for the Appellant Shri Tara Prakash, Deputy Commissioner (AR) for the Respondent
CORAM: HON’BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) HON’BLE MR. RAJU, MEMBER (TECHNICAL)
DATE OF HEARING : 12.12.2022 DATE OF DECISION: 10.04.2023
FINAL ORDER NO. A/10841-10843 / 2023 RAMESH NAIR :
All the appeals are taken up together for disposal, as the issues involved in these appeals are common in nature.
- The brief facts of the case are that the appellant-M/s Dahej Harbour and Infrastructure Ltd. (M/s DHIL) are engaged in providing “Port Services” at captive jetty, Dahej, Dist. Bharuch, Gujarat. Whereas, on the basis of information to the effect that Appellant was not paying Service tax properly, an inquiry was initiated. During the investigation it was noticed that Appellant had been granted a license by the Gujarat Maritime Board (GMB) toadminister, develop, maintain and to operate the captive jetty for purpose of handling, storage and transportation of cargos. The said captive jetty was constructed by M/s Hindalco Industries (Unit : Birla Copper), Dahej (M/s HILBC) after the approval from the GMB and later handed over to DHIL for its handling and maintenance. A Licence agreement was made between the GMB and DHIL on 11th August 1999 wherein GMB, DHIL & HILBC are referred to as „Board‟, „Licensee‟ and „Company‟ respectively. GMB had agreed to give concession to the extent of 80% on the actual landing and shipping fees (known as Wharfage Charges) specified in the schedule of port charges, in form of Jetty rebate on captive cargo (i.e. cargo owned by HILBC) in lieu of cost of construction of jetty by M/s HILBC. GMB has charged the Wharfage Charges @20% of the notified Wharfage charges specified in the schedule of port charges on captive cargo as per Licence agreement. The GMB had raised invoices to DHIL and paid Service tax on such Wharfage Charges under “Port Services”. DHIL, in turn, raised the invoice to M/s HILBC and collected & paid service tax only on 20% of such
notified Wharfage charges. Investigations were carried out by the department and the statements of employee of the Appellant were recorded. On the basis of the investigation, show cause notices were issued for the period 2006-07 to January 2013 alleging that taxable value has not been worked out properly as the amount of rebate has not been included in the taxable value as per Section 67 of the Finance Act, 1994 read with Rule 3
(a) of Service tax (Determination of Value) Rules, 2006. The show cause notices also alleged suppression, willful misstatement on the part of the Appellant with an intent to evade service tax, and extended period of limitation was invoked. The SCNs proposed to demand Service tax along with interest and penalty. In adjudication, Ld. Adjudicating authority confirmed the demand of service tax as proposed in the SCNs along with interest and penalties. Details of the Order-In-Original passed against the respective SCNs are as under: –
| S.
No. |
Show Cause Notice | Order-In-Original
No. |
Period | Demand of
Service tax |
| 1. | V/S.Tax/OA/DHIL- Port/Adj/Commr-15/2011-12 dated 14.10.2011 | 09/VDR-II/DHIL-
Port/D- BRH/ADJ/COMMR/2 012-13 dated 14.12.2012 |
2006-07
to 2010- 2011 |
5,17,53,96
2/- |
| 2. | V/S.Tax/DHIL- Port/Adj/Commr/45/12-13 dated 27.09.2012 | VAD-EXCUS-002- COM-008-13-14
dated 15.10.2013 |
2011-
2012 |
92,57,824/
– |
| 3. | V/S.Tax/DHIL/D.BRH/Adj/ Commr/62/14-15 dated 08.10.2014 | BHR-EXCUS-000- COM-016-15-16
dated 31.12.2015 |
July 2012 to
January 2013 |
63,54,118/
– |
- Beingaggrieved by the above impugned orders appellant preferred appeals before this Tribunal.
- Shri Jigar Shah and Shri Ambrish Pandey Learned Counsels appeared on behalf of the appellants.Shri Jigar Shah submits that in the present case, the impugned orders had confirmed the liability of Service tax on the rebate/concession granted by the Appellant to M/s HILBC in wharfage charges, which was as notified by the GMB. The issue involved is squarely covered in favor of the appellant by a Judgment in the case of CCE Essar Bulk Terminal Limited – 2022 (1) TMI 317-CESTAT –Ahmedabad.
- He also submits that Appellant have discharged their Service tax liability correctly on the amount collected by them. Appellant have collected wharfage charges as per the rates notified by GMB and they could not have collected any amount in excess of notified by the Board. In terms of License Agreement with the Board the Appellant was directed to collect 20% of the amount.GMB raised the invoice on the appellant charging service tax on the value as may be notified by them. The Appellant were bound to raise the invoice on M/s HILBC on the same value as the Appellants were only a Licensee and cannot charge more than the notified rate. The Appellant have actually charged and collected 20% of the notified rate of GMB and have also paid Service tax on the same. No service tax can be demanded on the 80% of the portion which the Appellant had never charged or collected.
- He further submits that as per the provisions of Section 67 of the Finance Act, 1994, the Service tax is to be on “Gross Amount Charged”, the appellant have correctly discharged their service tax liability. If something is not charged by the service provider, it should not form part of value of taxable Rule 3(a) of Service tax (Determination of Value) Rules,
2006 is applicable when the value of service is not ascertainable in terms of Section 67 of Finance Act, 1994. In terms of Section 67, the gross amount charged by the appellant is the sole consideration for the services and therefore rule 3 cannot be applicable.
- ShriTara Prakash, learned Deputy Commissioner (AR) appearing on behalf of the revenue reiterates the finding of the impugned orders.
- We have heard both the sides and perused the records. The Appellant has mainly relied upon the judgment of this tribunal passed in the matter of M/s Essar Bulk Terminal Limited (supra)wherein the issue to be decided before the tribunal is that when GMB charged wharfage charges at the rate of 20% of the notified rate to M/s Essar Bulk Terminal Limited (M/s EBTL) and the same was charged on actual by M/s EBTL to M/s ESTL, the EBTL on the transaction between EBTL and ESTL required to charge the service taxon 100% of the notified rate including 80% rebate given by GMB to EBTL or on the 20% of the notified rate on which the service tax was discharged is correct or otherwise. However the said matter was decided by the tribunal on 06.01.2022 whereas impugned orders were passed on 14.12.2012, 15.10.2012 and 31.12.2015. Since the issue involved is mixed question of fact and law and in the change circumstances of the law on the issue in hand, we are of the opinion that the matter needs reconsideration by the Learned Commissioner to decide the matter after considering the judgment of M/s Essar Bulk Terminal Ltd. (supra) and corresponding facts of the case.
- In view of the above, we remand the matter to the Adjudicating authorityfor fresh consideration after granting reasonable opportunity of
hearing to both sides and after taking into account the decision of the tribunal in the case M/s Essar Bulk Terminal Ltd. cited supra. All the issues are kept open.
- Appealsare allowed by way of remand to the adjudicating
(Pronounced in the open court on 10.04.2023)
(Ramesh Nair) Member (Judicial)
(Raju) Member (Technical)
KL
Leave a Reply