International Seaport Dredging Limited Vs Commissioner of GST and Central Excise (CESTAT Chennai)
CESTAT Chennai held that amount received for land reclamation and soil stabilization in the nature of site formation service provided in the course of construction of port is exempt from service tax vide notification 17/2005-ST dated 07.06.2005.
Facts- The appellant, M/s. International Seaport Dredging Private Ltd., are engaged in providing Dredging Service. They are registered with the service tax Commissionerate and subsequently obtained centralized registration on 12.02.2009.
During the course of audit, it was noted by the Department that appellant had not paid Service Tax on Dredging Services provided to Dredging Corporation of India (DCI) for Sethu Samudram Project and Dhamra Port Company Ltd., and also on certain services imported by them.
Show Cause Notices for the different periods were issued to demand Service Tax on amounts received for Soil Stabilisation and Land Reclamation Services as Dredging Services, Charter-hire charges as Dredging Services, Maintenance and Repair Services, Man Power Recruitment and Supply Agency Services and other services. After due process of law, the authorities below confirmed the demand on the above and dropped all other issues. Aggrieved by the confirmation of demand of Service Tax, interest and penalties imposed the appellants are now before the Tribunal.
Conclusion- The notification 17/2005-ST dated 07.06.2005. exempts site formation services (soil stabilisation, land reclamation) provided in the course of construction of road, airports, railways, transport terminals, bridges, tunnels, dams, major and minor ports. After considering the agreement, the original authority in the above extracted order has come to the conclusion that the consideration received for site formation services is exempted under the above Notification and cannot be subject to levy of Service Tax under dredging services. The facts entirely being the same, we are of the view that the demand of Service Tax under the category of dredging services for the amount received by the appellant for soil stabilisation and land reclamation services cannot sustained and requires to be set aside which we hereby do.
Held that the charter/hire of vessel would at the best fall under Supply of Tangible Good Services and not under dredging services. Following the same, we are of the view that the demand of Service Tax on amount received by the appellant upon the charter-hire agreement under the category of dredging services cannot sustain and requires to be set aside which we hereby do.
Held that it is very much clear that the repair services were done outside India. The levy of Service Tax on Maintenance and Repair Services is on the basis of the place of performance and therefore the demand cannot be sustained as the services have been performed outside India and not received in India. For this reason, we hold that the demand under this category cannot sustain and requires to be set aside which we hereby do.
FULL TEXT OF THE CESTAT CHENNAI ORDER
The issue in all these appeals being similar and connected they were heard together and are disposed of by this common order.
2. Brief facts are that the appellant, M/s. International Seaport Dredging Private Ltd., are engaged in providing Dredging Service. They are registered with the service tax Commissionerate and subsequently obtained centralized registration on 12.02.2009. During the course of audit, it was noted by the Department that appellant had not paid Service Tax on Dredging Services provided to Dredging Corporation of India (DCI) for Sethu Samudram Project and Dhamra Port Company Ltd., and also on certain services imported by them. Show Cause Notices for the different periods were issued to demand Service Tax on amounts received for Soil Stabilisation and Land Reclamation Services as Dredging Services, Charter-hire charges as Dredging Services, Maintenance and Repair Services, Man Power Recruitment and Supply Agency Services and other services. After due process of law, the authorities below confirmed the demand on the above and dropped all other issues. Aggrieved by the confirmation of demand of Service Tax, interest and penalties imposed the appellants are now before the Tribunal.
3.1. The Ld. counsel Shri Raghavan Ramabadran appeared and argued for the appellant. The details of the Show Cause Notice period involved and the issues are furnished below:-
