Service Tax – Cestat Ahmedabad: Any amount provided by Gujarat Maritime Board, the appellant herein, is a State levy and a statutory levy and proceeds of such levy are credited to the Consolidated Treasury Fund of State of Gujarat - No Service tax liability on statutory levy – Appeal allowed [Order attached]
Order Date – 22 September 2023
Parties: Gujarat Maritime Board vs. C.C.E. & S.T.-BHAVNAGAR
- The Appellant, Gujarat Maritime Board, are part of Government of Gujarat. During the period 2007-08, 2008-09 and 2009-10 the appellants recovered certain amounts from the various ship breakers to whom they had allotted plots at Alang for the purpose of ship breaking.
- Demands were raised against them to recover service tax on all this charges however, the demand was confirmed only in respect of recoveries made against plot development charges.
- Whether the appellant is liable to pay service tax on recoveries made against plot development charges?
- The Tribunal observed that from the letter dated 29.12.2009 of appellant, it is apparent that the appellant had a view that the collection made under the head of “user development fee” is not in respect of any service and the said amount collected by them is not liable to payment of service tax. Their views were clearly communicated to the office of DGCEI and no show cause notice under the said head was issued by the office of DGCEI to the appellant.
- In this background, issuance of show cause notice on 10.04.2013 demanding service tax on this very amount of “user development fee” is clearly barred by limitation. There was no suppression or intention to evade payment of duty as the appellant had clearly disclosed the fact regarding collection of said user development fee as well as their views about non-taxability of the same to the department way back in 29.12.2009.
- Appellant have clearly stated that no services is provided by them to the allotees for plots to ship breaking and therefore, the amount collected by them cannot be called “port service‟.
- Hence the appeal is allowed.