The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand on waterfront royalty charges by considering it included in the ‘Port Service’.
State Charges Gog Jafrabad Port, the appellant assessee registered with the Service Tax department under the category of port services and has been paying Service Tax regularly under the port service rendered by them to various clients.
The assessee appealed against the order passed by the adjudicating authority for confirming the Service Tax demand of Rs. 1,52,52,812/-, under Section 73 of the Finance Act 1994.
V.H.P Singh, Jigar Shah and Ambar Kumrawat, the counsels for the assessee contended that the Show Cause Notice (SCN) dated 21 October 2011 was issued for the period covering 2006-07 to 2009-10. Thus, the entire SCN was bared by a period of limitation as provided under Section 73 (1) of the Finance Act, 1994.
P K Singh, the counsel for the department contended that the assessee had started payment of Service Tax on the amount of waterfront royalty, considered as “port service” since April 2010, but the assessee had not paid the Service Tax on the taxable amount received by them during the period from 2006-07 to 2009- 10.
The Bench observed that the assessee had regularly been audited by the department and a final audit order report No. 10/ST/2008-09, for covering the audit period October 2005 to March 2008, wherein all the financial records had been there reported by the auditing officers.
Also observed that the element of the suppression of facts or misrepresentation etc., within intent to evade Service Tax, are not present in this case, and as the SCN had been issued on 21 October 2011 much beyond the normal period of demand and therefore the SCN was barred by period of limitation.
The two-member bench comprising Ramesh Nair (Judicial) and C L Mahar (Technical) quashed the service tax demand on the grounds of limitation.
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