Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | C.A. No.-017405 – 2017 |
| Diary Number | 29624/2017 |
| Judge Name | HON’BLE MR. JUSTICE PANKAJ MITHAL |
| Bench |
HON’BLE MR. JUSTICE PANKAJ MITHAL; HON’BLE MR. JUSTICE PRASANNA B. VARALE |
| Precedent Value | Binding authority |
| Overrules / Affirms | Affirms |
| Type of Law | Indirect Taxation / Service Tax |
| Questions of Law | Whether exclusion of export cargo handling from the definition of “cargo handling service” (Section 65(23)) exempts it from the levy of service tax under sub-clause (zzm) of Section 65(105) read with Section 66. |
| Ratio Decidendi |
|
| Logic / Jurisprudence / Authorities Relied Upon |
|
| Facts as Summarised by the Court | The Airports Authority of India, registered under the Service Tax Department, handles export cargo activities (unloading, carting, X‐ray, packing). The Commissioner adjudicated service tax liability from 01.10.2003 to 31.03.2007 under “Storage and Warehousing Service” up to 09.09.2004 and under “Airport Services” thereafter. On appeal, CESTAT confirmed taxability of export cargo handling under “Airport Services” from 10.09.2004. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All courts of India |
What’s New / What Lawyers Should Note
- Sub-clause (zzm) of Section 65(105) (w.e.f. 10.09.2004) captures all services by airport authorities, including export cargo handling, irrespective of exclusion from “cargo handling service”.
- Charging Section 66 applies a 12% levy on “taxable services” defined under sub-clause (zzm).
- Circulars cannot override or narrow statutory charging provisions.
- Confirms that export‐cargo exclusions in a definitional provision do not confer an exemption when a broader taxable category applies.
Summary of Legal Reasoning
- Definition versus Charge: Section 65(23) excludes export cargo from “cargo handling service” (a definitional section), but Section 65(105)(zzm) defines “taxable services” to include any service by an Airport Authority at an airport.
- Charging Provision: Section 66 levies service tax at 12% on “taxable services” specified in Section 65(105), including sub-clause (zzm).
- Statutory Primacy: The express terms of Sections 65 and 66 govern levy; exclusion in one definition cannot override the charging language of Section 66.
- Temporal Scope: Sub-clause (zzm) was inserted effective 10.09.2004; all airport services rendered thereafter, including export cargo handling, are taxable.
- Rejection of Circulars: Administrative circulars cannot override clear statutory mandates on chargeability.
Arguments by the Parties
Petitioner (Airports Authority of India)
- Handling of export cargo is specifically excluded from “cargo handling service” under Section 65(23).
- Therefore, export cargo activities should not attract service tax under “cargo handling service”.
Respondent (Commissioner of Service Tax)
- Section 65(105)(zzm) covers any service by an Airport Authority at an airport, including export cargo handling.
- Section 66 charges service tax at 12% on such “taxable services”.
Factual Background
The Airports Authority of India, a Government of India entity under the Ministry of Civil Aviation, is registered for service tax and provides export cargo handling services (unloading, carting, X-ray, packing) from acceptance of cargo to loading onto aircraft. The Commissioner confirmed tax liability from 01.10.2003 to 31.03.2007—storage and warehousing services up to 09.09.2004, and airport services thereafter. CESTAT upheld the levy under “Airport Services” w.e.f. 10.09.2004, prompting the appeal to the Supreme Court.
Statutory Analysis
- Section 65(23): Defines “cargo handling service” (loading, unloading, packing) but expressly excludes handling of export cargo.
- Section 65(105)(zzm): Defines “taxable services” to include any service provided by an Airport Authority, or any person, in any airport or civil enclave.
- Section 66: Imposes service tax at 12% on the value of taxable services, including those in sub-clause (zzm).
Alert Indicators
- ✔ Precedent Followed