Despatch Money Cannot Be Taxed as Port Service Due to Lack of Independent Activity

Rashtriya Ispat Nigam Pvt. Ltd. Vs Commissioner of Central Excise & Service Tax (CESTAT Hyderabad) The appeal concerns whether “despatch money” received by the appellant can be classified as a taxable service under “port service” as defined in the Finance Act, 1994. The adjudicating authority had confirmed a demand of ₹2.58 crore along with an equal penalty on the ground that such despatch money constituted consideration for services rendered to vessel owners. The appellant, a Government of India undertaking engaged in importing raw materials, enters into charter party agreements...