HOMA ENGINEERING WORKS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The prayer in the stay petition is to dispense with the condition of pre -deposit of service tax amounting to Rs 68,50,50,147/ - and penalty of Rs 1,37,00,000/ - along with personal penalty of Rs 5,000/ - imposed under section 77 of the Finance Act, 1944 @ Rs 200/ - per day, during which they failed to pay service tax.

(2.) As per facts on record, the appellants are engaged in the business of repairing, chipping, cleaning and painting of the vessels of Coast Guard, Naval Dock and ONGC at Mazagaon Docks Ltd. During the period 16.07.2001 to 30.09.2003, the appellants did such job under contract with their customers for a value of Rs 12.93 crores approximately. They were issued a show cause notice dated 23.01.2004 alleging that the said services undertaken by the appellants are "Port Services" which are liable to service tax. The appellants took a categorical stand before the lower authorities that the services rendered by them for repairing of the vessels, under a contract with their customers cannot be treated as "Port Services" and hence are not liable to service tax. However, the authorities below by referring to the Board's Circular No.67/16/2003 -ST dated 11.10.2003 and also by referring to the various provisions of Major Port Act and Finance Act, 1994, held against the appellants and confirmed the demand as also imposed penalty.

(3.) Shri V Sridharan, Ld. Advocate arguing on behalf of the appellants has submitted that clause 67 of the Finance Act, 1994 refers to "Port Service" as "any service rendered by a port or any person authorised by such port, in any manner, in relation to a vessel or goods". Port has been defined in clause 66 as having the meaning assigned to it under section 2 (q) of the Major Port Trusts Act, 1963. Thereafter referring to the definition of "port" as given in the above section of Major Port Trust Act, he draws our attention to Section 42 detailing there the by Board or other person. He submits that the authorities below have taken note of clause (e) of Section 42, which is to the following effect.