By TIOL News Service

AHMEDABAD, MAY 09, 2014: THE issue involved in the appeal is whether the stevedoring services (loading / unloading of export cargo) and lighterage services (sea transportation from the location where the mother vessel is anchored till the jetty and vice versa) rendered by the appellant at minor ports in Gujarat could be taxed under Section 65(105)(zzl) as port service, which has been defined in Section 65(82) to mean any services rendered by a port or other port or any person authorized by such port or other port, in any manner, in relation to a vessel or goods

It is the appellants contention that during the material period (prior to 01.07.2010) for being taxed under the head of Port service the service was required to be rendered by the port or by any person authorized by such port or other port.

The revenue on the other hand has contended that the meaning of the expression authorized by the port need not be taken from the Gujarat Maritime Board Act, 1980 and has to be understood in its normal sense by applying the dictionary meaning.

After hearing both sides at length, the Tribunal held:

Wherever a service enactment regulating or dealing with the service sought to be taxed, the legislature has linked the scope and ambit of the taxable entry with the cognate legislature governing the rendition of such services.

The law is laid down by the Apex Court in the case of Aphali Pharmaceuticals vs. State of Maharashtra 2002-TIOL-397-SC-MISC that a statute has to be interpreted contextually and that it is unjust to decide or respond as to any particular part of law without examining the whole, to interpret and in such a way as to harmonize laws with laws, is the best mode of interpretation. Contextually the expression authorized by the port can have no other meaning other than that what has been given to it under the laws governing ports in India. Such an interpretation is also consistent with the scheme of the Finance Act, which has borrowed the scope and ambit of several services with respect to the cognate legislation which govern such services.

The appellant had in the course of personal hearing brought on record an authorization issued by the GMB vide Notification No.GMB/T/12(25)/37-38/2007-16 dated 08.08.2007 in exercise of powers conferred under Section 32(3) of the GMB Act, 1980, authorizing M/s. Atash Nor Control Ltd. to provide for Vehicle Traffic and Port Management Services in the Gulf of Khambhat and recover fee for the same as has been fixed in Section 37, 38, 41 and 42 of the GMB Act, 1980. No such authorization under Section 32(3) has been brought on record in respect of the services being rendered by the appellant. In the absence of an authorization having been issued in favour of the appellant under Section 32(3) they cannot be said to be rendering any service which has been authorized by the port, which alone have been taxed under the head of port services at the relevant point of time.

Also, a substantial portion of the demand against them is barred by limitation as the dispute in hand is one of interpretation and high judicial forums have at different time taken a different view. The Apex Court has in the case of Jaiprakash Industries Ltd. Vs. CCE 2002-TIOL-633-SC-CX-LB held that in such cases where different statutory authorities have taken divergent view extended period cannot be invoked.

Accordingly, the Tribunal allowed the appeal of the assessee.

(See 2014-TIOL-741-CESTAT-AHM)