Arkay Logistics Ltd Vs C.C.E. & S.T (CESTAT Ahmedabad)
CESTAT Ahmedabad held that during the charter period of vessels the right of possession of vessels and effective control have been transferred to service recipient, therefore the service does not fall under the “Supply of Tangible Goods Service”.
Facts- The appellant is engaged in the providing cargo handling services, port handling services, business auxiliary services etc.
During the course of audit, it was noticed that the appellant has shown in the balance sheet chartered hiring income where no service tax has been paid. Auditors observed that appellant was engaged in providing services in category Supply of Tangible Goods Services. The Finance Act, 2008 has introduced a new taxable service Supply of Tangible Goods service for levy of service tax w.e.f. 16.05.2008 vide Notification No. 18/2008-ST dated 10.05.2008. The gross amount charged or total consideration received for supply of tangible goods by the service provider shall be chargeable to service tax. Accordingly, show cause notices were issued to the appellant demanding Service Tax on hire income. The Commissioner confirmed Service Tax demands along with interest thereon and also imposed penalties under the Finance Act, 1994. Aggrieved of the same the appellant is before us.
Conclusion- Held that during the charter period of vessels the right of possession of vessels and effective control have been transferred to service recipient, therefore the service does not fall under the “Supply of Tangible Goods Service”. Further, in the present case since the appellant have admittedly paid the VAT to the state VAT department, the transaction is not liable to service tax under the category of “Supply of tangible goods for use” service.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
These appeals are filed by the Appellant against the respective following orders. The details of the appeals are as follows:
