Judgment:
M.V. Ravindran, J.
1. These two appeals are disposed of by a common order as they raise the same issue and are in respect of the very same assessee.
2. The relevant facts, after filtering out unnecessary details appellant herein registered themselves with the service tax department on 23.01.2003 as a cargo handling agent and discharging the service tax on the value of stevedoring, unloading and loading charges. An investigation was carried out and various statements were recorded and on scrutiny of the documents which were resumed, it was noticed that appellant have not paid service tax on the entire charges collected by them for various several services like lighterage and local transportation within the port and they have not paid service tax on stevedoring, unloading / loading of cargo in relation to export cargo. Coming to such a conclusion, that services of lighterage of cargo from ship to the berth and transportation of goods and in port area as rendered by the appellant are in relation to vessels or goods in the port area; the said services are fully covered under the taxable head port services; holding such a view a show cause notice was issued to the appellant for the payment of differential service tax liability. The said show cause notice also directed the appellant to show cause as to why interest be not demanded on such differential service tax liability and penalties be not imposed on them. Appellants contested the show cause notice on merits as well as on limitation. The adjudicating authority after granting an opportunity of personal hearing to the appellant and after considering the written submissions made by them, he rejected the contentions raised by the appellant and held that the services rendered by the appellant are classifiable under port services and are liable to pay the differential service tax and demanded interest; imposed equivalent penalties under various sections of the Finance Act, 1994.
3. Ld. Counsel appearing on behalf of the appellant after taking us through the Order-in-original, made submissions which are summarized as under:
He would draw our attention to the definition of port services and submit that to fall under the said category, a person has to be authorized by the port in relation to such port services in any manner. It is his submission that the appellants were not authorized by the port for providing such services. It is his submission that the said proposition has been settled by the Tribunal in the case of Velji P. Sons Agencies Pvt. Ltd. Vs. CCE [2007 (8) STR 236 (T.)] as has been affirmed by Apex Court in 2009 (13) STR J31 (SC). It is his submission that such a proposition was also followed by the Tribunal in the case of South India Corporation Agencies Ltd. [2010 (17) STR 170]. He would submit that the same ratio has been followed in the following cases:
1). Chawgule and Brothers Pvt. Ltd. - 2010 (18) STR 164,
2). H.K. Dave Ltd. - 2008 (12) STR 561,
3). S.S. Maritime - 2010 (17) STR 346.
It is his submission that in all the above said decisions, it was the contention of the Revenues Counsel that dismissal of Civil Appeal in case of Velji P. Sons Agencies Pvt. Ltd. did not result in merger of the decision of the Tribunal consequently the issue in dispute is not covered by the judgment of Apex Court. It is his submission that the case in hand, it is the contention of the adjudicating authority as well as Ld. Counsel appearing for the respondent and is clearly contrary to the law laid down by the Apex Court in the case of Kunhaya Muhammed Vs. State of Kerala [2001 (129) ELT 11 (SC)] which says that once an SLP has been converted into a Civil Appeal, any order passed thereafter would be an order of the Court attracting the doctrine of merger and it would apply the case in hand.
It is his submission that revenue has contended that decision in the case of Velji P. Sons Agencies Pvt. Ltd. had been rendered with reference to the provisions of Major Port Trust Act while the services which we are concerned in this case is being rendered in a minor port to which the provisions of Indian Ports Act, 1908 and Gujarat Maritime Board Act, 1981 are applicable is also a distinction which is untenable as grant of authorization by the port could apply in both the Port Trust Acts. It is also his submission that the reliance placed by the lower authorities as well as Ld. Counsel for the Revenue on the judgment of Western Agencies Pvt. Ltd. [2008 (12) STR 739] is also incorrect as Western Agencies decision has not referred to the correct provisions of the Indian Port Trust Act.
It is submitted that the minor ports are concerned and are covered by the State Governments who legislate the law governing and functioning of minor ports and in State of Gujarat, it is governed by Gujarat Maritime Board Act, 1981. It is his submission that the said Gujarat Maritime Board Act provides for authorization to perform services specified in the Gujarat Maritime Board Act on such terms and conditions that may be agreed upon.
It is his submission that in exercise of the provisions of grant of license, Government of Gujarat has framed the Gujarat Ports (licensing of persons engaged in unloading or loading of vessels) Rules, 1969, which provide for restriction on persons to work in the business of loading or unloading of steamers except under and accordance to the terms and conditions of license issued by a licensing officer for such purpose. It is his further submissions that the terms of aforesaid rules licenses have been issued to appellant for undertaking, stevedoring and lighterage services. Hence, the said activities undertaken by the appellant in terms of a license granted to them cannot be considered as an authorization issued to them under Section 32(3) of the Gujarat Maritime Board Act, 1981.
It is his submission that the revenues point that Section 32 of the Gujarat Maritime Board Act, 1981 was basically authorizing port officers is also incorrect as the said Section by any stretch of imagination cannot be construed in a manner being suggested by the revenue in as much as stevedoring is one of the specific services covered under Section 32(1) of the Gujarat Maritime Board Act, 1981. It is his submission that the provisions of Section 42 of the Major Port Trust Act cannot be equated to the provisions of the Section 32 of the Gujarat Maritime Board Act, 1981 to consider it as by way of granting a license is nothing but authorization is incorrect view.
It is his submission that the argument of the revenue that expression authorized has been used to convey meaning of being permitted licensed authorized to act on sign on behalf of the Gujarat Maritime Board is also an incorrect proposition as the Section 18 of the Gujarat Maritime Board Act, 1981 has been deleted from 1996 onwards, and in the case in hand no authorization whatsoever has been issued in favour of the appellant and they have been only licensed to carry out the activity is distinct from being authorized. It is the submission that levy of service tax at the relevant time was confined to services rendered by port or other port or person authorized by port and could not have been extended to any other person. It is his submission that the holistic reading of Chapter 5 of Finance Act, 1994 and the amendments made thereto by including further category of services as taxable services and also reading the various circulars of the CBEC, it would indicate that for levy and collection of service tax, particular services has to be done under the statute and in the case in hand, there was no authorization and hence part of the activities of the appellant cannot be covered under the services port services. He would also rely upon the decisions of the Apex Court in the case Board of Trustees of the Port of Bombay Vs. Sriyanesh Knitters AIR 1999 SC 2947 for the preposition. The Major Port Trust Act is not a complete code in itself which ousts the applicability of other acts and accordingly application of Indian Contract Act was upheld.
It is his further submission that the Chapter 5 of Finance Act, 1994 has incorporated various provisions of other enactments by referential incorporation and with respect to interpreting referential incorporation, it is settled law by the Apex Court that,
œwhen a single section of an act of parliament is introduced into another act, I think it must be read in the sense in which it bore in the original act from which it is taken, and that consequently it is perfectly legitimate to refer to all the rest of the act in order to ascertain what the section meant though other sections are not incorporated in the new act.?
Referred Port Small Corporation Vs. Smith 1985 (10) SC 364 was relied by the Apex Court and quoted in the judgment of Surana Steel Pvt. Ltd. Vs. Dy. Commissioner of IT [1999 (4) SCC 306]. For this preposition, he would also rely upon the judgment of the Apex Court in the case of Afali Pharmaceuticals [1989 (44) ELT 613].
He would submit that w.e.f. 01.07.2010 the definition of port service and the taxable service has been amended by the Finance Act, 2010 to provide that port service would mean any service rendered within a port or other port in any manner. He would also draw our attention to the explanatory memorandum to the Finance Bill, 2010 which explains that the changes were clarified as to that the definition of port service and other port service was being amended to provide that an authorization from the port authority would not be a pre-condition for taxing the said services and further that all services provided entirely within the port would be taxable under the head port services. It is his submission that the said amendment clearly brings out the legislative intent of not taxing services other than those provided by port or a person authorized by the port prior to 01.07.2010.
It is his submission that in so far as lighterage (sea transportation) services and concerned, such services, if provided for carrying coastal goods or in respect of transportation through national waters or inland waters was for the first time brought into tax net w.e.f. 01.09.2009. It is his submission that it is now a settled law as held in the case of Indian National Ship Owners Association 2011 (21) STR (SC) that if new taxable entry is introduced without altering the scope of existing taxable entry it would clearly show that new entry seeks to tax a service which was hitherto not taxable. Hence, prior to 01.09.2009 transportation of goods by sea was not taxable and could not have been taxed under the head of port services. It is his further submission that in the case of lighterage done by the appellant it was towards international sea transportation and even as on today there is no levy of service tax on sea transportation except for the coastal cargo.
It is his further submission that Ld. adjudicating authority has completely ignored the facts that the amounts on which service tax was discharged is again confirmed as a demand and similarly notional income shown in the books of accounts were also considered for the confirmation of the demand without considering the certificate issued by Chartered Accountant.
It is his submission that in any case, extended period of limitation cannot be invoked as the various decisions of the Tribunal were holding field as the non-levy of service tax on the stevedoring activities unless authorized by the port. Accordingly, extended period of limitation cannot be invoked is the submission as there is no suppression of fact willful statement to intent to evade payment of service tax.
It is his submission that in so far as a second appeal is concerned, the demand therein was raised for a period overlapping with that in the first show cause notice and has also invoked extended period of limitation. It is his submission that this action of invoking extended period in the second show cause notice when an identical issue is in dispute by issuance of a show cause notice, extended period cannot be invoked.
It is the submission that the allegation as to appellant had split their contract values and billed separately for stevedoring services, lighterage services and transportation within the port, so as to avoid liability to service tax on the entire consideration, is totally wrong observation in as much as, the appellant has suo moto started discharging service tax under the head of cargo handling services w.e.f. 16.08.2002 while service tax under the head of port services, for other ports, was introduced only w.e.f. 01.07.2003 and hence extended period which has been invoked is incorrect.
4. Ld. Special Counsel for the Revenue would take us through the facts of the case in appeal no.ST/473/2009-DB. After taking us though the findings recorded by the adjudicating authority, he would take us through provisions of Major Ports Trust Act, 1963, Gujarat Maritime Board Act, 1981. He would also take us to the meanings of the word authorized and authority as indicated in Law Lexicon and also through the provisions of Chennai Port Trust Harbour Craft Rules, Licensing of Steve Doors Regulation, 2009 and New Mangalore Port Trust (Authorization of Pilots) Act. After taking us through the above said documents, he would submit as under:
I. On the issue, submissions on facts are as follows:
* As averred by Shri Jitendra Lal, Partner of Shreeji, in his statement dated 14/11/05, they are engaged in stevedoring activities i.e. providing manpower for the ships arrival at port, cargo handling i.e. loading and unloading of cargo into / from ships, unloading / loading cargo from / into ships anchored in the sea with the help of barges and tugs, and transport of such cargo within port premises to plots allotted for storage of goods as also transport outside the port, if requested by their customers.
* In 2002-2003, Shreejis major income was accounted for in their Books of accounts as stevedoring and handling income at Rs.7.46 Crores. In this year, no separate heads of income was created.
* Prior to September 2002, when Cargo handling service was brought within service tax net, Shreeji, was issuing invoices showing a consolidated amount including stevedoring, lighterage, loading / unloading of cargo and internal transportation services rendered within the port area.
* After September 2002, in the invoices raised by Shreeji the consolidated amount was split into charges for stevedoring / unloading / loading and charges for lighterage and local transportation services rendered within the port area.
* In 2003-2004, Shreejis major income was shown under the Head lighterage and shore handling, which stood at Rs.16.93 Crores. In this year, no income was shown under the stevedoring head in the B/Sheet and the same was included in the lighterage and shore handling income.
* Two separate invoices were raised by Shreeji one for stevedoring, unloading and loading services and another for lighterage and local transportation services rendered within the port area.
* In 2004-05, major income was accounted for as lighterage and local transportation income, which stood at Rs.32.15 Crores. Income from stevedoring/unloading/loading activities was shown as Rs.4.25 Crores.
* Two separate invoices were raised by Shreeji one for stevedoring, unloading and loading services and another for lighterage and local transportation services rendered within the port area.
* During the aforesaid years, all these incomes were inclusive of the income generated in handling export cargo.
* During the period from 1/7/2003 to 31/3/2007, which is the period covered in the present Appeals, even though Shreeji was providing a composite service involving complete handling of cargo, including bringing goods from the ships to the wharf and shifting them to the place of storage at the port, they deliberately raised separate invoices in respect of only import cargo handling and paid tax thereon.
* In their case, rendering of services commences from the anchorage point, right upto the designated goods storage place in the port / jetty. While providing lighterage services, Shreeji is unloading the goods from a vessel in a lighter or barge, bringing the same to the wharf / berth of the port and unloading the same in the port area. Thus, collectively, the services rendered by Shreeji i.e. lighterage, transportation within the port area and loading and unloading in the said process are squarely covered under the definition of Port service provided in an other port. [Para 22 of the OIO].
* Under Port service there is no exemption for services rendered in relation to export cargo; hence, entire charges recovered by Shreeji shall be subject to STax.
* In the ST-3 Returns filed by them, for the period from 1/7/2003 to 31/3/2007, Shreeji had failed to declare the Gross amount charged as they declared only a part of the gross amount collected by them. Thus, they deliberately did not declare the correct value of the services rendered by them.
* As a result, the S Tax short paid by them amounted to Rs.11.33 Crores for the aforesaid period.
* Thus, the demand in this case is not in respect of charges recovered for stevedoring services in relation to import cargo but in respect of charges for lighterage and local transportation services rendered within the port area and handling of export cargo within the port.
II. On the legal aspects of the first issue, submissions are as follows:
* In terms of Section 65(82) of FA, 94, Port service means any service rendered by a port or other port or any other person authorized by such port or other port, in any matter, in relation to vessels or goods. [The term port refers to a major port and other port refers to a minor port as understood respectively under the Major Ports Act, 1963 and Indian Ports Act, 1908]. The levy of S Tax on port service became effective from 1/7/2003.
* Essential elements of the aforesaid definition are
(1) the service rendered may be any service;
(2) the service may be rendered by a port or any other person authorized by such port or other port;
(3) the service may be rendered in any manner and
(4) the service rendered shall be in relation to vessels or goods. The definition does nowhere envisage that the services shall be rendered on behalf of the port / other port.
* Expressions any service and in any manner and in relation to appearing in the aforesaid definition are of wide amplitude. They are exhaustive in coverage and would include all services rendered within the port area in so far as they relate to vessels and / or goods.
* As per Section 65 (76) of FA, 1994, other port has the meaning assigned to port in clause (4) of section 3 of the Indian Ports Act, 1908 (15 of 1908), but does not include the port defined in clause (81).
* What is incorporated by reference in the aforesaid Section 65 (76) is only the definition of port in the 1908 Act. No other provisions of the 1908 Act are either borrowed or incorporated in full / part or referred to in the definition.
* Following the ratio of the judgment rendered by the Apex Court in the case of Onkarlal Nandlal vs. State of Rajsathan [1986 AIR 2146], there was no need to refer to any other provision of the 1908 Act once the incorporation of the definition of other port was carried out in the definition of port service in the FA, 1994.
* The observations of the Larger Bench of the Honble Tribunal in Paras 9.2 to 9.16 of their Order in the case of Western Agencies Pvt. Ltd. and others [2011 (220) STR 305 (T-LB)] also support this view.
* Accordingly, there is no need to interpret the expression authorised in terms of any of the provisions of the 1908 Act.
Without prejudice to the above stand, assuming that it is argued that Section 32 of the Gujarat Maritime Board Act, 1981, should be taken aid of to interpret the expression authorised appearing in the definition of port service the following submissions may kindly be given due consideration. In the present case, admittedly, Shreeji possesses licences for providing stevedoring services and for plying barges / lighters within the port limit. Under the authority of these licences they provide the aforesaid services to their customers. It may perhaps be argued that services of stevedoring, lighterage and local transportation being carried out under these licences do not amount to authorization by the other port.
First of all, the ratio of the aforesaid Apex Court judgment in the case of Onkarlal Nandlal vs. State of Rajsathan and that of the LB Order squarely apply to the present case. This would entail interpretation of the expression authorised as per common understanding.
According to the Law Lexicon [Page 627] vide page 26 of these submissions authorised means permitted or directed. As per the Cambridge Advanced Learners dictionary authorization means to give official permission for something to happen or to give some one official permission to do something. Again as per the Law Lexicon [Page 3930] vide page 27 of the present submissions, licence is a power or authority to do some act which, without such authority, could not lawfully be done and [Page 3931 ibid] vide page 28 of submissions, In the popular as also in the legal sense, a licence is a permission to do something which, without the licence would not be allowable. In the secondary sense, it denotes a certificate or document which embodies the permission in question. Thus, common as well judicial understanding points to the fact that being authorized as well as being licenced connote the same thing, namely being granted permission to do an act, which is otherwise not allowed under the law without such permission. The services rendered by Shreeji are under the licences / permissions granted by the GMB and they should be regarded as having been authorised by the other port.
Secondly, a close study of Section 32 of GMB Act and the Notifications issued thereunder would reveal that the authorization referred to therein is essentially with reference to the Port Officers. Besides, they alone are authorized to charge or recover the amount leviable as State charges vide sub-section (4) of Section 32. The rates are ostensibly for services e.g. berthing etc. facilities provided by the Port itself.
Thirdly, sub-section (1) of Section 32 covers specifically, stevedoring services. Such activities can, therefore, be provided by the port or any person authorized by it. For this purpose, a stevedore is given a licence, without which he cannot undertake such services. In the regulations framed by the Central Government (A copy of Regulations issued by the Chennai Port is at pages 29 34) a stevedore is defined as an authorized agent for loading and unloading and stowage of cargo in any form on board the vessels in Ports. Here too, authorization and licensing convey the same meaning. It is pertinent to note here that Section 42 of MPTA, 1963 (relied upon in Veljis case) does not make a specific mention of stevedoring as against the specific provision in Section 32 of GMB Act.
Fourthly, a survey of the GMB Act reveals that the expression authorised has been used therein to convey meanings, such as permitted, licensed, authorized to act or sign on behalf of the GMB. A typical example is that of piloting of vessels at the port. Piloting is one of the services specified in Section 32(1) of the Act. Under Section 18 of the Act, no person shall be appointed as a pilot at any port who is not for the time being authorized by the State Government under the Indian Ports Act, 1908, to pilot vessels at that port. Every port, major as well as minor, or the Maritime Board, has made regulations relating to authorization of pilots through a system of licensing. Under these regulations, every pilot shall hold a licence to perform the duties of a pilot for the concerned port. Similar is the situation relating to stevedoring i.e. unloading from and loading into vessels of cargo and ancillary activities thereof. In the scheme of things envisaged under the 1908 Act, therefore, authorisation and licensing convey the same meaning.
Fifthly, as may be seen from the Para 17 of the OIO, the matter was referred to the Port Officer, Bedi, who clarified, vide his letter dated 28/8/2009, that the meaning of authorization to any person to perform work within the port by GMB in respect of lighterage of vessel and transportation of goods from the vessel anchored at anchorage wharf / jetty / quay / pier and vice versa through a barge is that similar to the authorization issued to the applicants for stevedoring and harbour craft for the tasks enumerated here before.
Thus, activities undertaken by Shreeji right from unloading of cargo from the ship anchored away from the port, loading such cargo on to barges / tugs, transportation such cargo to wharfs / berths using barges / tugs, unloading of cargo from barges / tugs onto the wharfs / berths and subsequent transport of the said cargo to shortage plots within the port area are services rendered within the port answering the description of port service. These services are undertaken in terms of the authorization or permission given under the licences granted to them by GMB. The observations of the Larger Bench of the Honble Tribunal in Paras 11 and 12(c) of their Order in the case of Western Agencies Pvt. Ltd. and others [2011 (220) STR 305 (T-LB)] also support this view.
III. On the case law relied upon by the appellants, the submissions are as follows:
(A) Homa Engineering Works [2007 (7) STR 546 (T)] Activities in question were, repairing, chipping, cleaning and painting of vessels. The Tribunal examined the issue with reference to Sections 35,36,42,48 and 49A of Major Ports Act, 1963 and took the view that
* services which can be taxed under Port Services have to be either services rendered by the port itself or any person authorized by such port;
* admittedly, repair of the vessel is not being done by the port;
* Homa Engineering Works were given vendor registration for executing repair contracts;
* u/s. 35(1), the port is only to provide the facility of dry dock / workshop and it is not the duty of the port to undertake repair work;
* activity of ship repair work is not mentioned in section 42(e);
* no rates could be specified for repair work and such rates can be only with routine services vide section 42(4);
* activity is covered under maintenance / repair services
Hence, it was held that Port Service was not attracted in respect of repair work done by Homa Engineering Works. [Appeal against this order is pending before the Mumbai High Court]
(B) Velji P. and Sons [2007 (7) STR 236 (T)] Assessee herein was already paying STax on CHA services and the activities in question were, arranging for or hiring barges, cranes, fork lifts on behalf of the importer / exporter on reimbursement basis. The Honble Tribunal took the view that,
* Section 35 of MPTA, 63 did not include the activities undertaken by Velji.
* Services provided by Velji were not required to be performed by the port.
* There is no authorization by the port; licences issued cannot be regarded as authorization.
* U/s. 42, authorization should have prior approval of Central Government and under sub-section (4) rates are to be notified in the Gazette.
* Velji was free to charge any rate; hence, licence cannot be treated as authorization.
* Appellants / stevedores were not conferred with functional freedom and hence, the difference between authorization u/s. 42 and a licence given under Regulations under section 123 of MPTA, 1963.
Accordingly, it was held that activities of Velji did not fall under the category of port services. Appeal against this Order was decided against Revenue by the Apex Court as not appeal was filed by Revenue in the SC against the decision of the Tribunal in the case of Homa Engineering Works, while as mentioned earlier, an appeal against the latter Order is pending before the Mumbai High Court as of date. The Tribunal examined the issue w.r.t. MPTA, 1963, while the relevant Act applicable to Pipavav Port was actually Indian Ports Act, 1908 and GMB Act, 1981 further Section 32(1) of the GMB Act specifically covers stevedoring.
AFORESAID DECISIONS ARE DISTINGUISHABLE FROM THE FACTUAL LEGAL ISSUES OF THE PRESENT CASE.
(C).Konkan Marine Agencies [2007 (8) STR 472 (T)] Activities in question were, export of iron ore fines i.e. handling export cargo. Tribunal examined the issue with reference to section 42 of MPTA, 1963 and took the view that,
* Konkan, who had a stevedoring licence performed only the services of handling of export cargo.
* Such services were not on behalf of the port; hence, they were not covered under port services.
* Services rendered by Konkan were Cargo handling services but being only in respect of export cargo, was excluded from the levy of STax.
In appeal, the High Court of Karnataka held as follows:
* Stevedoring licence issued in favour of Konkan as per Rules of NMPT, 1976 issued by the Govt. of India. It satisfied the mandate under Section 42(3) and it constitutes authorization. [Para 7]-* - [* This finding supports the view that licensing of stevedores constitutes authorization under the Port Acts]
* Activities of Konkan were not covered by port service for the simple reason that the definition of Cargo handling service and section 65(23) of FA, 1994 clearly puts a bar w.r.t. imposition of tax on export activities which also includes handling of export cargo.
* Definition of port services would not be applicable to the facts of the case Konkan.
SLP filed against this judgment is pending before the Apex Court since 16/3/2009.
IV. Several decisions followed the line taken in the aforesaid three decisions of the Tribunal and in all those cases, stevedoring and allied / ancillary activities performed in the port area were held as not covered under the category of port services. However, in the case of M/s. Western Agencies Pvt. Ltd. And others [2008 (12) STR 739 (T)], the Chennai Bench of Tribunal took the view that since in Veljis case the activities were undertaken in a minor port, reliance placed on the provisions of MPTA, 1963 was not correct. Further, the dismissal of the appeal against it by the Apex Court being not on merits, the said decision was held to be not a good precedent for the appeals before them. The Bench also noted that for the subsequent period appellants in that case had voluntarily paid STax in respect of operations, such as inter-carting and storage of goods in port area ancillary to stevedoring i.e. loading of cargo into vessels, unloading of cargo from vessels and transshipment of cargo within the port area and hence, the matter stood conceded for the present and future. Besides, the Bench expressed the view that in interpreting the definition of port services there was no need to look at the provisions of either MPTA, 1963 or IPA, 1908. However, since the view taken by them was contrary to the view held by co-ordinate benches, the Chennai Bench directed that the matter be placed before a Larger Bench.
V. The Larger Bench considered the matter at great length and have, in their Order reported at 2011 (220) STR 305 (T-LB), held as follows:
(a). Provisions other than clause (q) of Section (2) of the Major Port Trusts Act, 1963 or any provisions other than clause (4) of Section (3) of the Indian Ports Act, 1908 are not applicable to interpretation of port service defined under Section 65(82) of the Finance Act, 1994 in absence of statutory intention thereof.
(b).Stevedoring in a major or minor port is a port service within the meaning of this expression defined under Section 65(82) of the Finance Act, 1994 following judgment of Honble High Court of Karnataka in Konkan Marine case - 2009 (13) S.T.R. 7 (Kar).
(c).Activities/operations like intercarting (transportation of cargo after its unloading from a vessel, to a place of storage within the port area), storage of cargo in plots allotted by the Port, blending of different grades of coal in the port area and other kinds of cargo handling in the port area (other than export of cargo) can be held to be services ancillary to stevedoring and classifiable as port services under Section 65(82).
The discussion of the issues involved as set out in Paras 9.1 to 9.16 and 10.1 to 10.3 and 11 of the above Order of the LB clearly explain that rationale underlying the view taken as above and the same are relied upon by Revenue in support of its case. It must be added that further hearing in the main appeal of the same appellant has been stayed in the interim by the Madras High Court. It is understood that hearing by the High Court on the issue of interim stay has been concluded and the decision is awaited.
VI. A related argument advanced is that the amendment made by expanding the scope of the definition of Port Service by the Finance Act, 1994, wherein there is no pre-condition of any authorization from the Port authority for taxing the services rendered in the port, makes it clear that prior to 2010, all services provided entirely within the port, whether authorized by the port authority or not, were not covered under Port Service.
VII.In this regard, reference is invited to Ministrys Explanatory note as part of Budgetary changes for 2010-2011, excerpted below;
4.1 Airport Service and Port Service: Airport Service and Port Service cover specified taxable services provided by airport, major port and minor port or persons authorized by such port. For activities like vessel repair or other maintenance work in dry docks, Service tax liability is contested on the ground that such services are not provided under authorization by port. Classification of activities rendered by various service providers inside port area has also been subject to interpretation. To provide clarity on such issues and may be, taking note of judicial decisions, all relevant services are now being amended so as to remove the requirement of authorization by the port concerned to the service provider. Unlike the pre-amended categories where services provided by port are being taxed, post-amendment, all services provided within the port will be taxable and will be classifiable under Port service ousting application of Section 65A of Finance Act, 1994.
It is evident, therefore, that the amendment made in 2010 in the definition of Port Service is essentially to bring about greater clarity in the coverage of services under this category. No adverse inference can be drawn on account of the amendment.
VIII. Revenue would also like to place reliance on the following circulars issued by the Ministry clarifying the levy on Port service:
(i). F.No.B.11/1/2001-TRU dated 8/7/2001 (Annexure VIII);
(ii).F.No.B11/1/2001-TRU dated 1/8/2002 (Annexure II).
IX. As regards applicability of extended period of limitation it must be said that Shreeji cannot plead bonafide belief because they split up their gross income in 2003 itself and did not bring the fact of excluding lighterage and local transportation charges from their income for the purpose of S Tax, to the notice of the Department, though invariably the contract for rendering services to their customers was composite and included stevedoring and the aforesaid elements as well. This was premediated. They suppressed the above facts, thus invoking of extended period of limitation is justified.
Further, by 2003, there was no judicial pronouncement relating to non-taxability of lighterage and local transportation charges under the category of Port service.
X. As regards the liability to interest u/s. 75 of FA, 1994 and the imposition of penalty u/s. 76 ibid, the findings of the respondent in Paras 27 to 34 of the OIO are reiterated.
XI. In view of the above submissions, the Appeal bearing No.ST/473/2009 filed by M/s. Shreeji Shipping may be held to be devoid of any merit.
5. Both sides filed two rejoinders which are considered by us while arriving at a conclusion.
6. We would like to record that there is a point in the submissions made by Revenues Counsel as regards the submission or disposal of appeal no.ST/11274/2013. It is seen from the records that Revenue has not authorized Special Counsel for appearing in this matter hence the prayer of the Ld. Special Counsel for delinking this appeal from the said appeal is accepted and our findings will be limited to the issue involved in appeal no.ST/473/2009-DB only. Registry is directed to delink appeal no.ST/11274/2013 from the current proceedings and list the same for disposal in its due course after issuing proper notice.
7. We have considered the detailed submissions of both sides and have also perused through the written submissions. The dispute in the present case is whether
i). Stevedoring services (loading / unloading of export cargo)
ii). Lighterage services (sea transportation from the location where the mother vessel is anchored till the jetty and vice versa); rendered by the appellant at minor ports in Gujarat could be taxed under Section 65(105)(zzl) as port service, which has been defined in Section 65(82) to mean any services rendered by a port or other port or any person authorized by such port or other port, in any manner, in relation to a vessel or goods.
8. The term Port has been defined under Section 65(81) of the Finance Act, 1944 to have the same meaning as in Section 2(q) of the Major Port Trusts Act, 1963. While the expression other port has been defined in Section 65(76) to mean a Port as defined in Section 3(4) of the Indian Ports Act, 1908.
9. It is the appellants contention that during the material period (prior to 01.07.2010) for being taxed under the head of Port service the service was required to be rendered by the port or by any person authorized by such port or other port. The appellant not being authorized by port or other port for rendering the aforesaid services could not be held liable to discharge service tax under the head of port services. The appellant has contended that at the minor ports in Gujarat only such persons who have been authorized by the port under Section 32(3) of the Gujarat Maritime Board Act, 1980 (GMC for short), to perform services in relation to vessel or goods, who alone can be taxed under the said head. The revenue on the other hand has contended that the meaning of the expression authorized by the port need not be taken from the GMC Act, and has to be understood in its normal sense by applying the dictionary meaning.
10. We have examined the evolution of Chapter V of the Finance Act, 1994, which embodies the law relating to service tax and find substance in the plea urged by the appellant that wherever a service enactment regulating or dealing with the service sought to be taxed, the legislature has linked the scope and ambit of the taxable entry with the cognate legislature governing the rendition of such services. For ease of reference some illustrative services are being extracted herein below:
a. Chapter V of the Finance Act, 1994, initially introduced the levy of service tax on following three services viz. Telegraph Services, General Insurance Services and Stock Broker Services. Each of them was governed or regulated under a specific enactment and the Finance Act, 1944 has also borrowed the counters of the taxing entry with reference to same, as can be seen from the relevant definitions extracted herein below:
Stock Broker Services: Definition
65(13). "stock broker" means a stock-broker who has either made an application for registration or is registered as a stock-broker in accordance with the rules and regulations made under the Securities and Exchange Board of India Act, 1992 (15 of 1992);
Taxable Service 65(16)(a) to an investor, by a stock-broker in connection with the sale or purchase of securities listed on a recognized stock exchange;
Telegraph Services Definition 65(17) "telegraph authority" has the meaning assigned to it in clause (6) of section 3 of the Indian Telegraph Act, 1885 (13 of 1885); and includes a person who has been granted a license under the first proviso to sub-section (1) of section 4 of that Act;
65(16)(b) to a subscriber, by the telegraph authority, in relation to a telephone connection;
General Insurance Services Definition 65(5) "general insurance business" has the meaning assigned to it in clause (g) of section 3 of General Insurance Business (Nationalization) Act, 1972 (57 of 1972); Taxable Service 65(16)(c) to a policy holder, by an insurer carrying on general insurance business, in relation to general insurance business;
b. Chapter V of the Finance Act, 1994, has been amended from time to time to add services such as those relating Rent-a-cab, Architect Services, Custom House Agent Services, Practicing Chartered Accountant, Practicing Cost Accountant, Practicing Company Secretary, Tour Operators, Banking and other Financial Services, Computer Network Services, Cable Operator Services, Goods Transport Operator Services, etc. The scope and ambit of these services has also been circumscribed by the relevant enactment governing the same, as can be seen from the relevant definition in the Finance Act, 1994 which are extracted herein after for ease of reference.
Custom House
Agent Definition
65(13) customs house agent means a person licensed, temporarily or otherwise, under the regulations made under sub-section (2) of section 146 of the Customs Act, 1962 (52 of 1962);
Taxable Service
65(41)(h) any service provided to a client by a CHA in relation to the entry or departure of conveyances or the import or export of goods;
Goods Transport Operator
Definition 65(16). goods carriage has the meaning assigned to it in clause (14) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988);
Taxable Service
65(41)(m) any service provider to a customer by a GTO in relation to carriage of goods by road in a goods carriage;
Tour Operator
Definition
65(44). tour operator means a person who holds a tourist permit granted under the rules made under the Motor Vehicles Act, 1988 (59 of 1988);
Taxable Service
65(41)(q). any service provided to any person, by a tour operator in relation to a tour.
Rent a cab
Definition
65(32). rent-a-cab scheme operator means a person who is the holder of a licence under the Rent-a-cab Scheme, 1989 framed by the Central Government under the Motor Vehicles Act, 1988 (59 of 1988);
Taxable Service
65(41)(r). any service provided to any person, by a rent-a-cab scheme operator in relation to the renting of a cab;
Architect Service
65(5). architect means any person whose name is, for the time being, entered in the register of architects maintained under section 23 of the Architects Act,1972 (20 of 1972) and also includes any commercial concern engaged in any manner, whether directly or indirectly, in rendering services in the field of architecture;
Taxable Service
65(48)(p). to any client, by an architect in his professional capacity in any manner;
Practicing Chartered Accountant Definition
65(31). "practising chartered accountant" means a person who is a member of the Institute of Chartered Accountants of India and is holding a certificate of practice granted under the provisions of the Chartered Accountants Act, 1949 (380 of 1949) and includes any concern engaged in rendering services in the field of Chartered Accountancy;
Taxable Service
65(48)(s). to any client, by a practicing chartered accountant in his professional capacity, in any manner;
Practicing Cost Accountant
Definition
65(32). "practicing cost accountant" means a person who is member of the Institute of Cost and Works Accountants of India and is holding a certificate of practice granted under the provisions of the Cost and Works Accountants Act, 1959 (23 of 1959) and includes any concern engaged in rendering services in the field of cost accountancy;
Taxable Service
65(48)(t). to a client, by a practicing cost accountant in his professional capacity, in any manner;
Practicing Company Secretary Definition
65(33). "practicing company secretary" means a person who is a member of the Institute of Company Secretaries of India and is holding a certificate of practice granted under the provisions of the Company Secretaries Act, 1980 (56 of 1980) and includes any concern engaged in rendering services in the field of company secretaryship;
Taxable Service
65(48)(u) to a client, by a practicing company secretary in his professional capacity, in any manner;
Banking and Other Financial Services Definition 65(9) and 65(10)
(9)."banking" and banking company shall have the meanings assigned to them in clauses (b) of section 5 of the Banking Regulation Act, 1949 (10 of 1949),
(10). banking and other financial services means, the following services provided by a banking company or a financial institution including a non-banking financial company, namely:
(i). financial leasing services including equipment leasing and hire-purchase by a body corporate;
(ii).credit card services;
(iii).merchant banking services;
(iv). securities and foreign exchange (forex) broking;
(v).asset management including portfolio management, all forms of fund management, pension fund management, custodial depository and trust services, but does not include cash management;
(vi). advisory and other auxiliary financial services including investment and portfolio research and advice, advice on mergers and acquisitions and advice on corporate restructuring and strategy; and
(vii). provision and transfer of information and data processing;
Taxable Service
65(72)(zm) to any customer, by a banking company or a financial institution including a non-banking financial company, in relation to banking and other financial services;
Computer Network Services
Definition
65(17) "computer network" has the meaning assigned to it in clause (j) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);
Taxable Service
65(72)(zh)to a customer, by a commercial concern, in relation to on-line information and database access or retrieval or both in electronic form through computer network, in any manner;
Forward Contract
Definition
65(46)(a) forward contract has the meaning assigned to it in clause (c) of section 2 of the Forward Contracts (Regulation) Act,1952 (74 of 1952);
Taxable Service
65(105)(zzy) to any person, by a member of a recognized association or a registered association, in relation to a forward contract;
Cable Services Definition
65(20) cable service shall have the meaning assigned to it in clause (b) of section 2 of the Cable Television Networks (Regulation) Act, 1995 (7 of 1995);
Taxable Service
65(90)(zs)to a customer, by a cable operator in relation to cable services;
11. Even in respect of port services the ambit of the said service in the Finance Act, 1994 has been circumscribed by the provisions governing ports in India. The expression authorized by the port has a specific connotation under the Major Port Trusts Act, 1963 (which governs all Major Ports) as also under GMB Act, 1980, Maharashtra Maritime Board Act, Tamilnadu Maritime Board Act, and other similar Maritime Board Acts issued by various State Governments governing Minor Ports. Section 42(3) of the Major Port Trust Act, 1963 and Section 32(3) of the GMB Act, 1980 provide for an authorization from the Port for performing specified services. The said provisions further provide that the person authorized by the port shall charge or recover for the service rendered by them in accordance with the scale of rates which have been framed. The relevant portion of Section 42 of the Major Port Trust Act, 1963 and Section 32 of the GMB Act, 1980 is reproduced herein below for ease of reference:
Section 42(3) Notwithstanding anything contained in this section, the Board may, with the previous sanction of the Central Government, authorize any person to perform any of the services mentioned in sub-section (1) on such terms and conditions as may be agreed upon.
Section 42(4) No person authorized under sub-section (3) shall charge or recover for such service any sum in excess of the amount specified by the Authority, by notification in the Official Gazette.
Section 32(3) Notwithstanding anything contained in this section, the Board may authorize any person to perform any of the services mentioned in Sub-section (1) on such terms and conditions as may be agreed upon.
Section 32(4) No person authorized under Sub-section (3) shall charge or recover for such service any sum in excess of the amount leviable according to the scale framed under Sections 37, 38 or 40.
The law is laid down by the Apex Court in the case of Aphali Pharmaceuticals vs. State of Maharashtra reported in 1989 (44) ELT 613 that a statute has to be interpreted contextually and that it is unjust to decide or respond as to any particular part of law without examining the whole, to interpret and in such a way as to harmonize laws with laws, is the best mode of interpretation. In our view, the principles laid down by the Honble Apex Court in the case of Aphali Pharmaceuticals apply in all force to the facts of the present case. We find that contextually the expression authorized by the port can have no other meaning other than that what has been given to it under the laws governing ports in India. Such an interpretation is also consistent with the scheme of the Finance Act, which has borrowed the scope and ambit of several services with respect to the cognate legislation which govern such services.
12. The appellant had in the course of personal hearing brought on record an authorization issued by the GMB vide Notification No.GMB/T/12(25)/37-38/2007-16 dated 08.08.2007 in exercise of powers conferred under Section 32(3) of the GMB Act, 1980, authorizing M/s. Atash Nor Control Ltd. to provide for Vehicle Traffic and Port Management Services in the Gulf of Khambhat and recover fee for the same as has been fixed in Section 37, 38, 41 and 42 of the GMB Act, 1980. No such authorization under Section 32(3) has been brought on record in respect of the services being rendered by the appellant. In our view, in the absence of an authorization having been issued in favour of the appellant under Section 32(3) they cannot be said to be rendering any service which has been authorized by the port, which alone have been taxed under the head of port services at the relevant point of time.
13. It is also a settled law laid down by the Apex Court in the case of Surana Steel Pvt. Ltd. Vs. Dy. Commissioner of Income Tax, reported in 1999 (4) SCC 306, that in a case of in case of referential incorporation, as in the case under Chapter V of the Finance Act, 1994, where provisions of different Statutes are incorporated in another Statute, then for ascertaining the scope of the provisions incorporated it is permissible to refer to the present Statute from which the provisions have been incorporated. In coming to this view their Lordships have quoted with approval the view taken by Lord Blackburn in the case of Portsmouth Corp Vs. Smith, 1985 (10) AC 364, which reads as under:
when a single section of an Act of Parliament is introduced into another Act, I think it must be read in the sense in which it bore in the original Act from which it is taken, and that consequently it is perfectly legitimate to refer to all the rest of that Act in order to ascertain what the section meant though other sections are not incorporated in the new act For this reason also we find that there is no infirmity in referring to provisions of the GMB Act while deciphering the meaning of the expression authorized by the port used in the definition of port service under the Finance Act, 1994.
14. The Ld. Counsel appearing for the Revenue has relied upon a three judges bench decision of the Apex Court in the case of Onkarlal Nandlal Vs. State of Rajasthan reported in 1986 AIR 2146 to contend that there was no need to refer to any provision of the Major Port Trust Act or any other Act, for determining the scope of the expression authorized by the Port under the head of Port services. We have perused the said case law and find that in that case Section 4(2) of the CST Act had been borrowed in the Rajasthan Sales Tax Act, 1954. The Revenue therein was contending that while construing whether or not sale has taken place inside a State, the entire Section 4 of the CST Act ought to be applied including the exception therein, in sub-section 4(1). Apex Court held that in construing whether the sale was made within or outside the state, as only Section 4(2) of the CST Act had been borrowed and not the exception contained in Section 4(1), consequently the exception could not be read into the Section which has been borrowed. We are of the view that this judgment does not further the case of the revenue, as the said judgment was rendered in the facts of that case where an exception to the Section which had been incorporated was sought to be read into the Statute, which was negated by the Apex Court. In the case in hand there is no exception to the provisions which have been incorporated, which the appellant wants us to read in the Finance Act and consequently there is no infirmity is drawing meaning of the expression authorized by the port from the legislation governing ports, which have specifically been referred to and incorporated in the Finance Act, 1994. It is settled law laid down by the Apex Court in the case of Alnoori Tobacco Products Ltd. Vs. CCE, 2004 (170) ELT 135 that case laws cannot be applied as Euclids theorems as circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. We also take note that Honble Bombay High Court has in the case of Shamrao Vitthal Co-operative Ltd. Vs. Star Glass Works reported in AIR 2003 Bom 205, dealt with the judgments of the Apex Court in the case of Onkarlal Nandlal Vs. State of Rajasthan, Surana Steels Vs. CIT and the decision of Lord Blackburn in the case of Portsmouth Vs. Smith and held that it is open to the Court to refer to the provisions of the Act from which provision have been incorporated in a subsequent Act, though not specifically incorporated, if such provisions throw light to the meaning of the provision which have been incorporated in the subsequent Act. The relevant observations of the Honble High Court in this regards is extracted herein below for case of reference.
"15. As we read the judgments cited supra, the legal position seems to us is that when the particular provision of the earlier Statute is incorporated in the subsequent Act, such provision so understood in the first Act at the time of incorporation has to be given the same meaning in the subsequent Act. It is always open for the court to refer to relevant provisions of the earlier Act from which the provision has been enacted in the subsequent Act though not specifically incorporated, if such provisions throw light to the meaning of provision which has been incorporated in the subsequent Act. In the classic and celebrated words of Lord Blackburn, it is perfectly legitimate to refer to the rest of the Act from where a single section has been incorporated in order to ascertain what the section meant, though rest of the sections have not been incorporated in the subsequent Act. When a provision is adopted in any later Act, such adoption by incorporation ordinarily and normally takes in all the amendments in the earlier Act till the date of adoption. The exception being the provisions not incorporated which has come in the section incorporated as an exception or proviso."
15. The suggestion of the Counsel for the Revenue that the reasoning laid down by the Larger Bench in the case of the Western Agencies Pvt. Ltd. and Ors. Vs. CCE, reported in 2011 (220) STR 305, ought to be applied is also misplaced as Western Agencies has filed a Writ before the Honble Madras High Court against the said miscellaneous order passed by CESTAT and the Honble High Court has passed the following order staying the proceedings Issue notice to the respondents, returnable in eight weeks. There shall be an order for interim stay on further hearing.
16. We also note that even otherwise the Larger Bench had with reference to the principle of parimateria statute held that provisions of the Ports Act could applied for interpreting the Finance Act, 1994 on the premise that both the Acts were incorporated for different purposes. We find that the Apex Court has in the case of Sir Silk Ltd. Vs. Textile Committee and Ors. reported in AIR 1989 SC 317 held that it is not only in a case where two Statutes have the same purpose that the principle of parimateria statute can be applied but the same also applies if the two statutes being construed relate to
i). the same person of things; or
ii). to the same class or person or things; or
iii). have the same purpose or object.
The Larger Bench had not examined clause (i) and (ii) above before holding that the two statutes were not pari-materia. The Counsel for the appellant has argued that levy of service tax on Port service is with reference to the services rendered by a Major Port or a Minor Port or a person authorized by such Major Port or Minor Port and consequently the levy under the Finance Act, 1994 was clearly relating to the same class of person or things / class of persons or things which the Ports Act was covering and consequently the two statutes were pare-materia. We find that it is an undisputed position that the Ports Act specifically provides for services which a Port would render and also provides for grant of an authorization in favour of a third person for rendering services. It is these services which the Finance Act seeks to tax and therefore the two statutes are with respect to the same person / thing or class of person / things and are thus pari-materia statutes. We find that applying the principle of pari-materia statute also the provisions of the Acts governing ports could be read referred to while interpreting the provisions of the Finance Act with reference to port services.
17. We also find that no cognizance had been taken of the amendment made to the definition of Port service w.e.f. 01.07.2010 to provide that port service would mean any service rendered within a port or other port, in any manner. The amendments effected from 01.07.2010 are extracted herein below for the ease of reference.
65(82). "Port Services" means any service rendered within a port or other port, in any manner
65(105). to any person, by any other person, in relation to port services in other port, in any manner;
Provided that the provisions of Section 65A shall not apply to any service when the same is rendered wholly within other port;
The explanatory memorandum to the Finance Bill, 2010 explaining the said changes has clarified that the definition of port service and other port service was being amended to provide that an authorization from the port authority would not be a pre-condition for taxing the said services and further that all services provided entirely within the port would be taxable under the said head. The said amendment clearly brings out the legislative intent of not taxing services other than those provided by a port or a person authorized by the port prior to 01.07.2010.
18. We also find the Division Bench which referred the matter to the Larger Bench was not apprised of certain vital and relevant facts which lead them to refer the matter to the Larger Bench in the case of Western Agencies. The referral bench was of the belief that insofar as Minor Ports are concerned there was no provisions under the Indian Ports Act for grant of an authorization and that anomalous situation would be created if a view is taken that only service which are authorized by a port can be taxed under the head of the Port services. The relevant observations of the referral bench are extracted herein below for ease of reference.
13. We have not found any corresponding provision in the Indian Ports Act specifying services to be provided by a minor port or a person authorized by such Port. (Section 35 of the Indian Ports Act, which provides for charging of fees by a minor port for pilotage, hauling, mooring, remooring, hooking, measuring and other services rendered to vessels, however, seems to indicate that a minor port can get these operations undertaken by a licensee or authorized person) Would it mean that, in respect of minor ports - our country has as many as 187 minor ports (as per the records of the Ministry of Shipping, Govt. of India) as against only 12 major ports - in this country, no activity/operation (including stevedoring) is liable to be exigible to service tax under the head port services defined under Section 65(82) ibid Certainly, the law of service tax cannot be expected to have envisaged such an anomalous situation. It is a cardinal principle of statutory interpretation that, when the language of a statute is capable of two interpretations, one of which is reasonable and the other unreasonable, the court should hold that the former must prevail.
We find that insofar as Minor Ports are concerned both the Union as well as the State Government have the powers to make laws. Insofar as the State of Gujarat is concerned the Government of Gujarat has enacted the Gujarat Maritime Board Act, 1981. The said Act applies to all the Major Ports in the State of Gujarat to which the provision of the Indian Ports Act, 1908 applies. The said Act provides for establishment of a Board to be named to be called as the Gujarat Maritime Board (GMB for short) for the administration, control and management of the port. It also provides that the administration of the port would be vested in the Board. Section 32 of the said Act is of relevance and empowers the Board to authorize any person to perform the services specified therein on such terms and conditions may be agreed upon. It further provides that the person so authorized, shall not charge or recover for the services in respect of which such person has been authorized to recover any sum in excess of the amount leviable according to the scale framed under Section 37, 38 or 40 of the relevant Act. Similar provisions exist in other States also and the same provide for the port to authorize a third person to render services. Had these facts been brought to the notice of the referral bench, then perhaps the reference itself may not have been required.
19. The reliance placed by the Ld. Counsel for the Revenue on the decision of the Honble Karnataka High Court in the case of Kokan Marine Agencies reported in 2009 (13) STR 7 is completely misplaced as in that case the Honble Court was not dealing with the question as to whether a license granted under the regulations for undertaking stevedoring operations was the same as an authorization under Section 42(3) of the Major Ports Act. In fact the court proceeded on the presumption that the assessee therein had an authorization under Section 42(3). Since the High Court was not concerned with the question as to whether a license issued for stevedoring purpose is the same as an authorization under Section 42(3) the said decision cannot be considered as a precedent on the proposition as has been held by the Apex Court in the case of Mittal Engineering Works Pvt. Ltd. Vs. CCE. Insofar as the appellant is concerned we find that the license issued to the appellant for undertaking stevedoring operations as also lighterage has been issued under Rule 6(1)(kk) of the Indian Ports Act which deals with the power to make regulations for licensing purposes which is distinct from an authorization under Section 32(3).
20. The Ld. Counsel for the revenue has contended that the decision of the Tribunal in the case of Velji Sons Pvt. Ltd., which was upheld by the Apex Court, cannot be relied upon as even though the service rendered by Velji and Sons were at a Minor Port the judgment had been rendered considering provisions of the Major Port Trusts Act. We have hereinabove reproduced provisions governing Major Ports and Minor Ports and find are pari-materia insofar as the requirement for grant of an authorization is concerned and that the mere fact that Velji had referred to the provision of the Major Ports Act, this by itself would not render the said decision inapplicable. Even otherwise the said judgment having been affirmed by the Apex Court by dismissing the Civil Appeal filed by the Revenue, the same is required to be followed as a precedent.
21. We also find considerable force in the submission of the appellant that a substantial portion of the demand against them is barred by limitation as the dispute in hand is one of interpretation and high judicial forums have at different time taken a different view. The Apex Court has in the case of Jaiprakash Industries Ltd. Vs. CCE reported in 2012 (146) ELT 481 held that in such cases where different statutory authorities have taken divergent view extended period cannot be invoked.
22. In view of the foregoing and authoritative judicial pronouncements, we hold that the impugned order is unsustainable. Impugned is set aside and appeal is allowed.