D.N. Panda, Judicial Member - Questions Referred : While examining the scope and levy of service tax on "Port service" under the taxing provisions of Finance Act, 1994 (hereinafter referred to as "the 1994 Act") in the aforesaid batch of cases, the Division Bench of Tribunal in Chennai came to a conclusion contrary to the decisions made in Homa Engineering Works v. CCE [2007] 9 STT 294 (Mum. - CESTAT), Velji P. Sons (Agencies) (P.) Ltd. v. CCE [2008] 12 STT 148 (Ahd. - CESTAT) for which following questions as appearing in Para 15 of the referral order -Western Agencies (P.) Ltd. v. CST [Misc. Order No. 365/2008, dated 26-8-2008] arose for answering by the Larger Bench :

"15. We realize that we have taken a view contrary to the one taken by co-ordinate Benches in Homa Engineering, Velji, and Other cases. Judicial discipline requires that the issue be considered and settled by a Larger Bench. Accordingly, we direct the Registry to place the records before the Hon’ble President to constitute a Larger Bench to consider and decide upon the following issues :-

(a)Whether any provisions other than clause (q) of section 2 of the Major Port Trusts Act, 1963 or any provisions other than clause (4) of section 3 of the Indian Ports Act, 1908 are applicable to interpretation of "port service" defined under section 65(82) of the Finance Act, 1994;

(b)Whether stevedoring in a major or minor port is a "port service" within the meaning of this expression defined under section 65(82) of the Finance Act, 1994;

(c)(If the answer to (b) is in the affirmative) Whether activities/operations like intercarting (transportation of cargo after its unloading from a vessel, to a place of storage within the port area), storage of cargo in plots allotted by the Port, blending of different grades of coal in the port area and other kinds of cargo handling in the port area can be held to be services ancillary to stevedoring and whether, ipso facto, these, services can be classified as "port services" under section 65(82) ibid." [Emphasis supplied]

Background of reference

1.1 In the case of Homa Engineering Works (supra), related to the dispute whether repairing, chipping, cleaning and painting of the vessels of the Coast Guard, Naval Dock and ONGC at Mazagon Docks Ltd. during the period 16-7-2001 to 30-9-2003 were ‘port service’. The Tribunal in paras 10 and 11 of the order found and held that the work required to be executed by the Board of the Port Trust under section 35 of the Major Port Trusts Act, 1963 (hereinafter referred to as ‘the 1963 Act’) is to provide the facility like dry dock, etc., to carry out the repairs or overhauling of vessels, etc., and not the repair job itself. It was also held that ship breaking activities and ship manufacturing activities may also be done in port area, for which purposes facility may be provided by the port, but that will not make the same as "port service". Revenue has carried the matter to Hon’ble High Court of Bombay being aggrieved by the order of Tribunal. Hon’ble High Court has admitted appeal of Revenue on 16-9-2009 registered as Appeal case No. 67/2009 framing following question of law for answering as in 2010 (17) STR J57 (Bom.):

"Whether in the facts and circumstances of the case and in law Tribunal is justified in holding that the services of repairing, chipping, cleaning, painting etc., rendered by the respondent on the vessel at Mazagon Docks Ltd., do not fall within meaning of port services as defined under section 65(84) and section 65(105)(zn) of the Finance Act, 1994." [Emphasis supplied]

1.2 The decision made in Homa Engineering as above was followed in Velji P. Sons (Agencies) (P.) Ltd.’s case (supra). In Velji’s case the services rendered by that assessee CHA as recorded in the impugned order before Tribunal were hiring of the barges, cranes, forklifts and the assessee contended that the service provided by them was Customs House Agent service and was licensed by Gujarat Pipava Port Ltd. [Ref : para-