Order date – 29 August 2022

Facts – 

• The Respondent, Essar Bulk Terminal Limited (EBTL), is engaged in providing various taxable services under Section 69 of the finance Act 1994.
• During the course of Audit it was noticed that Respondent was also charging facility charges @0.18 USD on the basis of Gross Registered Tonnage of vessel per day at the birth in respect of other cargo. However, such “facility charges” @0.18 USD was not charged by Respondent in respect of vessels carrying the captive cargo of M/s Essar Steel (India) Ltd.(ESTIL), which according to department respondent has not included in the value of “facility charges” in the related taxable service charges, resulting in short payment of Service tax on such charges.
• Show Cause Notice dated 22.09.2015 was issued demanding Service tax along with interest and penalty. Further, a periodical show cause notice dated 17.03.2016 was also issued which were dropped.
• Aggrieved, Revenue filed the appeal.

Issue – 

• Whether “facility charges” are charged by the respondent from other customers but not from M/s ESTIL, is to be included in the gross value of service provided by them to M/s ESTIL?

Order – 

• The Tribunal observed that on the plain reading of Section 67 of the Finance Act, 1994, it is clear that only the actual consideration for the services provided by the service provider to the service recipient shall alone be chargeable to service tax unless there is any extra consideration flowing from service recipient to the service provider.
• In the present case, neither it is a case of extra consideration flowing from the service recipient to the service provider nor there is any proof of such extra consideration, therefore the gross amount charged by respondent to M/s ESTIL being sole consideration will alone be liable to Service tax and no any other notional amount will be added on assumption and presumption basis.
• Also after analyzing explanation to clause 2 of Rule 5 of Service tax (Determination of Value) Rules, 2006 which clarifies that the value of taxable services is the total amount of consideration consisting of all components of the taxable service and it is immaterial that the details of individual components of the total consideration is indicated separately in the invoice. Therefore, the Tribunal did not found any force on the contention of the department that respondent has not included the value of “facility charges” in the related taxable service charges.
• Therefore, the order was upheld and the appeal was dismissed.