C.C.E. & S.T. Rajkot Vs Shivam Marine Services (CESTAT Ahmedabad)
Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench, has dismissed an appeal filed by the Commissioner of Central Excise & Service Tax (C.C.E. & S.T.), Rajkot, affirming that “weighment activity” carried out by Shivam Marine Services within the Navlakhi Port is not liable for service tax. The Tribunal concluded that the activity does not fall under the taxable category of “Business Support Service” and, furthermore, constitutes a discharge of a statutory obligation.
The Revenue had sought to levy service tax on Shivam Marine Services for their weighment operations, classifying them under Section 65(104c) read with Section 65(105)(zzzg) of the Finance Act, 1994, which defines “Business Support Service.” The Commissioner (Appeals) had previously dropped the demand, a decision now upheld by the CESTAT.
Revenue’s Stance: Private Business, Not Statutory Function
The Revenue’s representative argued that the Commissioner (Appeals) erroneously dropped the demand by considering the assessee’s activity as a statutory obligation. According to the Revenue, the weighment service provided by Shivam Marine Services was not a statutory function but rather a private business activity, and therefore, subject to service tax. The core contention was that only services provided by a government body itself might be exempt, not those performed by an independent entity, even if related to a port’s functions.
