1. We have heard both sides on the application for waiver of pre-deposit of Service tax of Rs. 1,80,23,306/- together with penalty of equal amount under Section 78 and penalty of Rs. 1000/- under Section 77 of the Finance Act. 1994. The demand has been confirmed on the ground that the applicants herein are rendering Port Services which have been defined as "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". The applicants are held to be "other port" and the services rendered by them are hiring barges, tugs, floating cranes etc. for which they receive hiring income on which service tax has been confirmed.
2. Submissions are raised before us on the aspect of limitation - the period of demand ranged from 1.7.2003 to 31.3.2006 while the show cause notice has been issued on 8.6.2006. The demand, according to the applicants, is partly barred by limitation and only part of the demand falls within the normal period of limitation which would be to the tune of Rs. 71 lakhs. Further arguments are also advanced to the effect that the applicants are not 'other port' as held by the Commissioner, for the reason that the applicants fall under the Revdanda Port which is a port under the Rajpuri Group of Ports, which has been notified as "other port" occurring in 'The Indian Ports Act, 1908 by the Maharashtra Maritime Board. Lastly, the applicants submit that even if it is held that they are 'other port' within the meaning of Indian Port Act 1908, they are not rendered any services in relation to any vessel or goods and it is for this reason they seek waiver of pre-deposit of both service tax and penalties.
3. The ld. SDR draws our attention to the finding of the Commissioner on limitation viz that the applicants only submitted trial balance regularly to the department without disclosing that the income has been received on account of hiring charges or chartering charges of barges, tugs etc. and therefore there has been suppression on the part of the applicants; and that the applicants are rightly held to be "other port" and further that the hiring of tugs and barges fall within the scope of other port services in relation to vessels and goods and therefore the demand is required to be upheld and the applicants are required to deposit the entire amount of service tax together with penalties.
4. No prima facie case for total waiver has been made out by the applicants on merits of that matter viz. as to whether they are to be held as other port or not and prima facie if they are held to be other port, the services rendered by them in so far as hiring of tugs and barges for which hiring income is received would be covered under the definition of port services as their services prima facie relate to goods and vessels. However, on the plea of limitation we find substance for the reason that from December, 2004 onwards, CERA audit objection was raised to the effect that the services rendered by them fall under the scope of port services and income received by hiring of tugs and barges is liable to service tax and hence prima facie the applicants cannot be held to be guilty of suppression so as to invoke the extended period of limitation after 2004. The amount of service tax prior to December 2004 is to be about Rs. 71 lakhs and taking all other aspects into consideration, we direct the applicants to deposit a sum of Rs. 30 lakhs (Rupees Thirty lakhs only) towards service tax within a period of eight weeks from today and on such deposit, the requirement of pre-deposit of the balance amount of service tax and penalties shall stand waived and recovery thereof stayed pending the appeal. Failure to comply with this direction shall result in vacation of stay and dismissal of appeal without prior notice.