CST vs. Traffic Manager, Mumbai Port Trust (2015) 37 STR 993 (Tri.–Mum.)

The appellant in the present case (Mumbai Port Trust) had permitted ONGC to lay submarine pipelines beneath its land and sea bed within the port limits for enabling ONGC to transport goods (oil) through the pipelines. For this it had charged a compensation which was calculated on the basis of 50% of wharfage. Revenue had sought to demand service tax on these compensation under the category of port service. On appeal, the Tribunal held–

Only the services by a port in relation to vessel/ goods would be liable for service tax under the category of ‘port services’. The assessee had not rendered any service in relation to transportation of goods through pipeline as it did not have any control over the goods nor was it required to maintain, or repair the pipeline. Hence it cannot be said that assessee had rendered port service.

The compensation received by the assessee was for permission to use port area and not for receiving any service. It is in the form of lease rental which is outside the purview of port service.

The term used as ‘wharfage’ is merely to determine the measure of the compensation and not to determine the nature of the service rendered.

[CST vs. Traffic Manager, Mumbai Port Trust (2015) 37 STR 993 (Tri.–Mum.)]