COMMISSIONER OF CENTRAL EXCISE, BHAVNAGAR versus M/S GUJARAT MARITIME BOARD, JAFRABAD

Citation: [2015] 8 S.C.R. 187 · Decided: 22-07-2015 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Dismissed

Judgment (excerpt)

[2015]8S.C.R.187 
COMMISSIONER OF CENTRAL EXCISE, BHAVNAGAR 
A 
v. 
MIS GUJARAT MARITIME BOARD, JAFRABAD 
(Civil Appeal Nos. 3347-3348 of2014) 
JULY22, 2015 
[A. K. SIKRI AND R. F. NARIMAN, JJ.] 
B 
Gujarat Maritime Board Act, 1981- s. 37- Finance 
Act, 1994 - s. 65(82) - Service tax payable on wharfage c 
charges - Agreement between State Maritime Board and 
Company UCL, whereby licence granted to UCL to construct 
and use jetty for landing of goods and raw materials 
manufactured by UCL -Allegation that service tax payable 
on wharfage charges by Maritime Board collected by them D 
from their licensee-UCL under the taxable category of 'port 
services' - Tribunal holding that no service was rendered by 
Maritime Board in relation to any vessel and thus, no amount 
payable as service tax - Interference with - Held: Not called 
for - No service was rendered by Maritime Board to UCL 
E 
under the agreement-Agreement was entered allowing UCL 
to construct a jetty and thereafter, maintain it at its own cost-
Board itself charges or recovers wharfage charges from UCL 
and does not authorize UCL to recover such charges from 
other persons - No service is rendered by a port or by any F 
person authorized by such port and, thus, the first condition 
for levy of service tax is absent-As regards, direct berthing 
facilities provided for captive cargo, lease rent charged for 
use of waterfront also does not include any service in relation G 
to a vessel or go9ds and cannot be described as "port 
service". 
Dismissing the appeals, the Court 
HELD: 1.1 The agreement makes it clear that it is H 
187 
188 
SUPREME COURT REPORTS 
(2015) 8 S.C.R. 
A an agreement entered into u/s. 35 of the Gujarat Maritime 
Board Act allowing the licensee-UCL to construct a jetty 
and thereafter, maintain it at its own cost. It is not the 
Gujarat Maritime Board but the Licensee-UCL who keeps 
the said jetty in such condition that it is capable of 
B enabling vessels to berth alongsid~ itto load and unload 
goods. Thus, no service is rendered by Gujarat Maritime 
Board to UCL under the agreement. The rebate in 
wharfage charges of 80% is a condition imposed 
statutorily under Section 35 of the said Act. It is not 
C correct to say that it is in the nature of lease rent or 
licence fee, inasmuch as a separate licence fee is 
payable under the agreement. [Para 11) [207-B-D] 
D 
Black's Law Dictionary, Seventh Edn - referred to. 
1.2 The submission that all that is necessary is 
that a wharf be provided by the Board, the very provision 
of such wharf would entitle the Board to levy a fee which 
is nothing other than wharfage charges collected under 
E the Schedule of rates, cannot be accepted. Though 
Gujarat Maritime Board is the owner of the jetty under 
the said agreement, yet for providing the service of 
allowing a vessel to berth at the said jetty, it is necessary 
for Gujarat Maritime Board itself to keep the said jetty in 
F good order. Wharfage charges are collectible because 
they are in the nature of fees for services rendered. The 
expenses that are defrayed by the Board for the 
maintenance of the jetty is sought to be collected as 
wharfage charges. This amount would necessarily 
G include all amounts that are spent for keeping the said 
jetty in good condition including dredging so that vessels 
can berth alongside the jetty. It is clear that so far as jetties 
operated by the Board are concerned, the Board itself 
H defrays such expenses. It is only in cases like the instant 
where the jetty is primarily meant for loading and 
COMMNR. OF CENTRAL EXCISE, BHAVNAGAR v. 
189 . 
GUJARAT MARITIME BOARD, JAFRABAD 
unloading goods belonging to a particular private party A 
that repair and maintenance expenses are to be borne 
by the private party and not by the Board. It is in this 
circumstance, there is no service, therefore, rendered 
by Gujarat Maritime Board to UCL. [Para 12] [207-F-G; 
208-C-F] 
B 
1.3 Section 32 sub-se~tions (3) and (4), the Board 
may authorize any person to perform any of the services 
mentioned in sub-section (1) of the said Section which 
includes landing of goods at wharves. It cannot be said C 
that such authority !s given under the self-same 
agreement. The authority given to perform any of the 
services must first and foremost be under terms and 
conditions as may be agreed upon by the Board and 
the private person. Further, under s. 32(4), it is the private D 
person who is then authorized to charge or recover an

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