New Mangalore Port Trust Vs Commissioner of Central Excise and Service Tax (CESTAT Bangalore)
The appeal before the CESTAT arose from an Order-in-Original dated 25.11.2011 passed against New Mangalore Port Trust (NMPT), challenging the levy of service tax on the leasing and licensing of vacant land during the period 01.06.2007 to 31.03.2010. The Revenue had issued three show cause notices alleging that the appellant was liable to pay service tax under the category of “Renting of Immovable Property Service” for leasing vacant land to users for storing goods or constructing structures. The Commissioner held that the exclusion for vacant land applied only to land used for agriculture, aquaculture, farming, forestry, animal husbandry, or mining, and concluded that land situated within the port’s security compound constituted land appurtenant to buildings and was therefore taxable. The Commissioner invoked the extended period of limitation and imposed penalties, observing that the non-payment of tax came to light only after investigation.
The appellant contended that the leased or licensed land consisted of specifically identifiable vacant land and was neither land incidental to a building nor part of common areas or amenities. It submitted that the leases were executed under the provisions of the Tariff Authority for Major Ports (TAMP) and the Major Port Trust Act for storing iron ore, granite blocks, timber and other goods that could not be stored in enclosed buildings. Therefore, there was no suppression of facts.
