DCIT (TDS) 1(1), MUMBAI V. CMA CGM GLOBAL INDIA P.LTD, MUMBAI

ITA 2361/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1460 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 20-12-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 24-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K PODAR
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN , JUDICIAL MEMBER ITA NO. 2361/MUM/2015 (ASSESSMENT YEAR: 2005-06) DCIT (TDS) - 1(1) VS. M/S. CMA CGM GLOBAL INDIA ROOM NO. 802, K.G. MITTAL AYURVEDIC HOSPITAL BLDG. CHARNI ROAD, MUMBAI-0002 PRIVATE LIMITED INDIA BULLS FINANCE CENTER TOWER-3, 8 TH FLOOR, SENAPATI BAPAT MARG, ELPHINSTONE RD (W) MUMBAI 400013 PAN AACCC2219E APPELLANT RESPONDENT APPELLANT BY: SHRI S.K. PODAR RESPONDENT BY: SHRI NIKHIL TIWARI DATE OF HEARING: 20.12.2016 DATE OF PRONOUNCEMENT: 23.12.2016 O R D E R PER JASON P. BOAZ, A.M. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDE R OF THE CIT(A)-59, MUMBAI DATED 25.02.2014 FOR A.Y. 2005-06. 2. THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER: - 2.1 THE ASSESSEE-COMPANY IS A CARGO SHIPPING COMMIS SION AGENT. IN RESPECT OF PAYMENTS MADE TO NHAVA SHEVA INTERNATION AL CONTAINER TERMINAL LTD. (NSICT) FOR AVAILING OF COMPOSITE SET OF SERVICES SUCH AS STEVEDORING, LOADING AND UNLOADING, ETC. THE ASSESS EE HAD DEDUCTED TAX AT SOURCE THEREON @2.05% UNDER SECTION 194C OF THE INC OME TAX ACT, 1961 (IN SHORT 'THE ACT'). THE ASSESSING OFFICER (AO) WA S OF THE VIEW THAT NSICT IS PROVIDING MANAGERIAL SERVICES TO THE ASSESSEE AND T HEREFORE THE ASSESSEE OUGHT TO HAVE DEDUCTED TAX AT SOURCE UNDER SECTION 194J OF THE ACT @5.125% ON SUCH PAYMENTS. IN THAT VIEW OF THE MATTE R, THE AO TREATED THE ASSESSEE AS AN ASSESSEE IN DEFAULT AND ACCORDINGLY RAISED DEMAND UNDER SECTION 201(1) OF THE ACT FOR SHORT DEDUCTION OF TA X AT SOURCE AND FURTHER ITA NO. 2361/MUM/2015 M/S. CMA CGM GLOBAL INDIA PVT. LTD 2 CHARGED INTEREST UNDER SECTION 201(1A) OF THE ACT F OR THE YEAR UNDER CONSIDERATION VIDE ORDER DATED 22.03.2011 2.2 ON APPEAL BY THE ASSESSEE, THE LEARNED CIT(A)-5 9, MUMBAI VIDE IMPUGNED ORDER DATED 25.02.2015, FOLLOWING THE DECI SION OF THE COORDINATE BENCH OF THE TRIBUNAL, MUMBAI IN THE CASE OF ACIT V S. MERCHANT SHIPPING SERVICES PVT. LTD. (2011) (8 ITR 1) (MUMBAI ITAT), ALLOWED THE ASSESSEES APPEAL ON THIS ISSUE HOLDING THAT THE ASSESSEE IS L IABLE TO DEDUCT TAX UNDER SECTION 194C OF THE ACT AND NOT UNDER SECTION 194J OF THE ACT AS HELD BY THE AO AND DELETED THE DEMAND RAISED UNDER SECTION 201(1) OF THE ACT AND INTEREST CHARGED UNDER SECTION 201(1A) OF THE ACT. 3.1 AGGRIEVED BY THE ORDER OF THE CIT(A)-59, MUMBAI DATED 25.02.2015 FOR A.Y. 2005-06, REVENUE HAS PREFERRED THIS APPEAL RAI SING THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE WA S UNDER NO LIABILITY TO DEDUCT TAX U/S.194J OF THE L.T.ACT, 19 61 AND DELETING THE ADDITION MADE U/S.201(1)/201(1A) OF THE L.T.ACT , 1961 ON ACCOUNT OF SHORT DEDUCTION OF TAX ON THE PAYMENTS M ADE TO NHAVA SHEVA INTERNATIONAL CONTAINER TERMINAL PRIVATE LIMI TED DETERMINED BY THE AO WITHOUT APPRECIATING THE FACT THAT THE AO WAS RIGHT IN HOLDING THE ASSESSEE AS ASSESSEE IN DE FAULT WITHIN THE PROVISIONS OF SECTION 194J IN HIS ORDER U/S.201 (1)/ 201(1A) OF THE I.T.ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE PAYMENTS MADE TO NHAVA SHEVA INTERNATIONAL CONTAINER TERMINAL PVT. LTD. AR E NOT IN THE NATURE OF 'FEES FOR TECHNICAL AND MANAGERIAL SERVIC ES' BUT THE PAYMENTS ARE FOR CARRIAGE OF GOODS AND THUS DEFINED AS 'WORK' IN EXPLANATION (IV) TO SECTION 194C OF THE ACT, AND HE NCE THE SAME ARE NOT COVERED UNDER THE PROVISIONS OF SECTION 194 J OF THE I.T.ACT, 1961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT T HE CONTAINER HANDLING SERVICES ARE TECHNICAL SERVICES RENDERED B Y NHAVA SHEVA INTERNATIONAL CONTAINER TERMINAL PVT. LTD. AND FALL WITHIN THE AMBIT OF SECTION 194J OF THE L.T.ACT, 1961. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE INTEREST U/S.201(1A ) OF THE I.T.ACT, 1961 ON THE SHORT DEDUCTION OF TAX DETERMINED BY TH E AID AS THE TAX DETERMINED HAS ALREADY BEEN DELETED BY HIM AND INTEREST DELETION IS CONSEQUENTIAL TO THE QUANTUM DELETION F OR WHICH FURTHER ITA NO. 2361/MUM/2015 M/S. CMA CGM GLOBAL INDIA PVT. LTD 3 APPEAL HAS BEEN RECOMMENDED VIDE GROUND NOS. (I) TO (III). 5. THE APPELLANT PRAYS THAT FOR THIS AND OTHER REAS ONS IT IS SUBMITTED THAT THE ORDER OF THE CIT(A) ON THE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 6. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 3.2.1 AT THE OUTSET OF THE HEARING, BOTH PARTIES SU BMITTED THAT THE ISSUE RAISED BY REVENUE IN THIS APPEAL (SUPRA) IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NO. 2360/MUM/2015 AND CO NO. 106/MUM/2016 DATED 02.08.2016 FOR A.Y. 2004-05; A C OPY OF WHICH WAS PLACED BEFORE THE BENCH. WE FIND THAT THE COORDINAT E BENCH HAS ALLOWED THE ASSESSEES APPEAL, FOLLOWED THE DECISION OF ANO THER COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. MERCHANT SHIPP ING SERVICE P. LTD. (2011) 8 ITR 1 (MUMBAI ITAT) WHEREIN ON SIMILAR FAC TS IT WAS HELD AS UNDER: - 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD IN THE LIGHT OF PRECEDENTS CITED BEFORE US. IT IS NOTED THAT THE ASSESSEE-COMPANY IS A SHIPPING AGENT HANDL ING VESSELS FOR IMPORT AND EXPORT AT VARIOUS INDIAN PORTS ON BEHALF OF ITS CUSTOMERS. BEFORE WE PROCEED FURTHER, IT IS SINE QUA NON TO ZE RO IN ON THE EXACT NATURE OF SERVICES FOR WHICH THE ASSESSEE MADE THE PAYMENTS IN QUESTION. ORDINARILY SHIPPING AGENT IS A PERSON WHO SE BUSINESS IS TO PREPARE SHIPPING DOCUMENTS, ARRANGE SHIPPING SPACE AND INSURANCE AND FURTHER DEAL WITH THE CUSTOMS REQUIREMENTS. IT IS APPARENT FROM THE ASSESSMENT ORDER THAT DURING THE COURSE OF ITS BUSI NESS AS SHIPPING AGENT, THE ASSESSEE AVAILED THE SERVICES PROVIDED B Y NSICT FOR THE MOVEMENT OF ITS CARGO IN RESPECT OF IMPORT AND EXPO RT DONE BY ITS CUSTOMERS. THE MOVEMENT OF CARGO ON PORT, IN CASE O F EXPORT, INVOLVES DIFFERENT STAGES VIZ., LIFTING OF CONTAINERS FROM C USTOMERS TRAILER/RAIL WAGONS BY THE OPERATION OF RUBBER TYRE GANTRY CRANE S; MOVEMENT OF THE CONTAINERS FROM YARD TO THE VESSEL SIDE; AND MOVING THE CONTAINERS FROM TRAILERS AT THE QUAY SIDE ON TO THE VESSEL WIT H THE OPERATION OF QUAY CRANES. SIMILARLY THE MOVEMENT OF CARGO ON POR T, IN CASE OF IMPORT, INVOLVES DIFFERENT STAGES VIZ., MOVING THE CONTAINERS FROM VESSEL ON TO THE TRAILERS AT THE QUAY SIDE WITH THE OPERAT ION OF QUAY CRANE; MOVEMENT OF THE CONTAINERS FROM YARD TO VESSEL SIDE ; AND OPERATION OF RUBBER TYRE GANTRY CRANES/RAIL MOUNTED GANTRY CRANE S FOR LIFTING THE CONTAINERS OFF FROM TRAILERS TO CUSTOMERS TRAILERS /RAIL WAGONS. THE ABOVE DESCRIPTION OF THE WORK DONE BY NSICT FOR THE ASSESSEE WAS BROUGHT TO THE NOTICE OF AUTHORITIES BELOW AND THE AO HAS RECORDED THE SAME IN PARA 10 OF THE ASSESSMENT ORDER. THE VERACI TY OF ABOVE NATURE OF SERVICES, AS STATED BY THE ASSESSEE TO HAVE BEEN PROVIDED BY NSICT, ITA NO. 2361/MUM/2015 M/S. CMA CGM GLOBAL INDIA PVT. LTD 4 STOOD ESTABLISHED WHEN DURING THE COURSE OF SURVEY PROCEEDINGS IT WAS NOTED THAT NSICT OPERATED ITS TERMINAL WITH 8 QUAY CRANES, 29 RUBBER TYRED GANTRY CRANES, 3 RAIL MOUNTED GANTRY CRANES A ND MORE THAN 600 EMPLOYEES. 7. THE REFERENCE MADE BY THE AO IN PARA 5 OF THE AS SESSMENT ORDER THAT NSICT ENTERED INTO TECHNICAL SERVICES AGREEMEN T WITH P&O AUSTRALIA UNDER WHICH P&O AUSTRALIA WAS TO PROVIDE TECHNICAL KNOW- HOW TO THE ASSESSEE-COMPANY, IS NOT CORRECT. THE AS SESSEE STATED BEFORE THE LEARNED CIT(A) THAT P&O AUSTRALIA ENTERE D INTO TECHNICAL AGREEMENT WITH NSICT FOR PROVIDING TECHNICAL KNOW-H OW TO THEM AND NOT TO THE ASSESSEE-COMPANY. THIS FACT HAS NOT BEEN CONTROVERTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE WITH ANY MA TERIAL OR EVIDENCE. FROM THE ABOVE DISCUSSION IT IS MANIFEST THAT THE ASSESSEE MADE THE PAYMENTS FOR MOVEMENT OF CARGO OF ITS CUST OMERS, WHICH, IN TURN, WAS FACILITATED BY NSICT WITH THE USE OF THEI R EQUIPMENTS IN THE SHAPE OF CRANES AND MANPOWER. 8. NOW THE MOOT QUESTION ISWHETHER THE PAYMENT MAD E TO NSICT FOR THE MOVEMENT OF CONTAINERS CAN BE COVERED UNDER S.1 94J ? THE ASSESSEE DEDUCTED TAX AT SOURCE UNDER S. 194C ON TH E PAYMENTS MADE TO NSICT @ 2.05 PER CENT. AS AGAINST THAT THE AO HA S HELD THAT SUCH PAYMENTS ARE COVERED UNDER S. 194J, ON WHICH TAX WA S DEDUCTIBLE @ 5.05 PER CENT. IN ORDER TO APPRECIATE THE ENTIRE CO NTROVERSY IN RIGHT PERSPECTIVE IT WOULD BE APT TO CONSIDER THE PROVISI ONS OF S. 194J VIS-A- VIS S. 194C. 9. SEC. 194J REQUIRES DEDUCTION OF TAX AT SOURCE BY THE PAYER, INTER ALIA, ON THE PAYMENT OR THE CREDIT OF AMOUNT TO A R ESIDENT BY WAY OF FEES FOR TECHNICAL SERVICES AT THE SPECIFIED RATE, SUBJECT TO THE FULFILLMENT OF THE STIPULATED CONDITIONS. THE CASE OF THE AO IS THAT THE ASSESSEE AVAILED TECHNICAL SERVICES FROM NSICT AND HENCE TAX WAS DEDUCTIBLE AT SOURCE UNDER THIS SECTION. EXPLANATION (B) TO S. 194J DEFINES 'FEES FOR TECHNI CAL SERVICES' AS UNDER: 'FEES FOR TECHNICAL SERVICES SHALL HAVE THE SAME MEANING AS IN EXPLN. (2) TO CL. (VII) OF SUB-S. (1) OF S. 9.' 10. WHEN WE TURN TO EXPLN. 2 TO S. 9(1)(VII), IT IS FOUND THAT FEES FOR TECHNICAL SERVICES HAS BEEN DEFINED AS UNDER : 'EXPLANATION 2 : FOR THE PURPOSES OF THIS CLAUSE, FEES FOR TECHNICAL SERVICES MEANS ANY CONSIDERATION (INCLUDING ANY LU MP SUM CONSIDERATION) FOR THE RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THE PROVISION OF SE RVICES OF TECHNICAL OR OTHER PERSONNEL) BUT DOES NOT INCLUDE CONSIDERATION FOR ANY CONSTRUCTION, ASSEMBLY, MINING OR LIKE PROJECT UNDE RTAKEN BY THE RECIPIENT OR CONSIDERATION WHICH WOULD BE INCOME OF THE RECIPIENT CHARGEABLE UNDER THE HEAD SALARIES.' 11. ON CIRCUMSPECTION OF EXPLN. 2 TO S. 9(1)(VII) I N JUXTAPOSITION TO S. 194J, IT BECOMES APPARENT THAT THE FEES FOR TECHNIC AL SERVICES IS CONSIDERATION FOR THE RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES INCLUDING THE PROVISION OF SER VICES FOR TECHNICAL OR ITA NO. 2361/MUM/2015 M/S. CMA CGM GLOBAL INDIA PVT. LTD 5 OTHER PERSONNEL. THUS THE FOREMOST CRITERIA FOR BRI NGING ANY PAYMENT UNDER THE PURVIEW OF EXPLN. 2 TO S. 9(1)(VII) IS TH AT THE PAYMENT MUST HAVE BEEN MADE FOR RENDERING OF ANY MANAGERIAL, TEC HNICAL OR CONSULTANCY SERVICES AND ALSO INCLUDING THE PROVISI ON OF SERVICES FOR TECHNICAL OR OTHER PERSONNEL. 12. THE AO, IN THE INSTANT CASE, HAS RESTRICTED HIM SELF ONLY TO THE TECHNICAL SERVICES AND IT IS NOBODYS CASE THAT THE ASSESSEE MADE ANY PAYMENT FOR MANAGERIAL OR CONSULTANCY SERVICES. IN THE LIKE MANNER THE AO HAS NOT PRESSED INTO SERVICE THE LATER PART OF T HE EXPLN. 2, WHICH DEALS WITH PROVISION OF SERVICES OF TECHNICAL OR OT HER PERSONNEL. IT IS RIGHTLY SO BECAUSE OF THE FACT THAT NSICT RAISED IN VOICES IN RESPECT OF MOVEMENT OF CARGO AND THERE IS NO REFERENCE TO ANY SPECIFIC PROVISION OF SERVICES BY TECHNICAL OR OTHER PERSONNEL. RULE OF E JUSDEM GENERIS HELPS IN ASCERTAINING THE MEANING OF GENERAL WORDS IN THE COMPANY OF SPECIFIC WORDS. AS PER THIS RULE, THE GENERAL WORD DRAW THEIR COLOUR AND MEANING FROM THE COMPANY THEY KEEP. THE APPLICATION OF THIS RULE HAS BEEN APPROVED IN THE CONTEXT OF THE IT ACT BY SEVER AL COURTS INCLUDING THE HONBLE SUMMIT COURT IN A RECENT JUDGMENT RENDE RED IN CIT VS. MCDOWELL & CO. LTD. (2009) 224 CTR (SC) 16 : (2009) 23 DTR (SC) 122 : (2009) 314 ITR 167 (SC). BY APPLYING THIS RULE, THE EXPRESSION OTHER PERSONNEL IN THIS PROVISION MUST FALL WITHIN THE G ENUS OF SERVICES OF TECHNICAL PERSONNEL. IT CANNOT BE CONSIDERED AS AN Y PERSONNEL UNRELATED TO THE MANAGERIAL, TECHNICAL OR CONSULTAN CY SERVICES. EVEN THOUGH NSICT HAD THE SERVICES OF SEVERAL PERSONNEL IN THE PROCESS OF MOVEMENT OF CARGO, THOSE PERSONNEL, IN THE ABSENCE OF ANY FINDING BY THE AO THAT THEY POSSESSED SOME TECHNICAL EXPERTISE , CANNOT BE CONSIDERED WITHIN THE AMBIT OF THIS PROVISION AS FA LLING UNDER OTHER PERSONNEL. 13. FURTHER NARROWING THE SCOPE OF CONTROVERSY TO T HE PAYMENTS MADE BY THE ASSESSEE FOR AVAILING TECHNICAL SERVICES, AS HAS BEEN HELD BY THE AO, WE NEED TO CONCENTRATE ON THE MEANING OF TECHN ICAL SERVICES. IN OTHER WORDS, THE TECHNICAL SERVICES SHOULD BE PROVI DED BY THE RECIPIENT OF THE AMOUNT SO AS TO BRING THE PAYMENT WITHIN THE SCOPE OF S. 194J. THE WORDS TECHNICAL SERVICES HAVE NOT BEEN DEFINE D IN THE ACT. BUT WHEN WE VIEW EXPLANATION TO S. 9(1)(VII), WHICH DEF INES FEES FOR TECHNICAL SERVICES AS CONSIDERATION FOR RENDERING OF ANY 'MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES', IT BECOMES APPA RENT THAT THE WORD 'TECHNICAL' IS PRECEDED BY THE WORD 'MANAGERIAL' AN D SUCCEEDED BY THE WORD 'CONSULTANCY'. AS BOTH THE MANAGERIAL AND C ONSULTANCY SERVICES ARE POSSIBLE WITH HUMAN ENDEAVOUR, THE WOR D TECHNICAL SHOULD ALSO BE SEEN IN THE SAME LIGHT. TO BE MORE P RECISE, ANY PAYMENT FOR TECHNICAL SERVICES, IN ORDER TO BE COVERED UNDE R S. 194J, SHOULD BE A CONSIDERATION FOR ACQUIRING OR USING TECHNICAL KNOW -HOW SIMPLICITER PROVIDED OR MADE AVAILABLE BY HUMAN ELEMENT. THERE SHOULD BE DIRECT AND LIVE LINK BETWEEN PAYMENT AND RECEIPT/USE OF TE CHNICAL SERVICES/INFORMATION. 14. WHERE NO TECHNICAL SERVICES ARE PROVIDED AS SUC H, BUT THE PAYMENT IS MADE FOR THE USE OF SOME MACHINERY OR EQUIPMENT OR STANDARD FACILITY WHICH MAY HAVE BEEN CREATED OR BROUGHT INT O EXISTENCE WITH THE ITA NO. 2361/MUM/2015 M/S. CMA CGM GLOBAL INDIA PVT. LTD 6 INPUT OF TECHNICAL SERVICES ALONG WITH MAN, MACHINE AND MATERIAL, SUCH PAYMENT WOULD NOT PARTAKE OF THE CHARACTER OF FEES FOR TECHNICAL SERVICES. TAKE FOR EXAMPLE A PERSON GOING TO A CINE MA AND PURCHASING TICKET FOR WATCHING A MOVIE. WHEN HE PURCHASES A TI CKET, HE PAYS FOR WATCHING THE MOVIE AND NOT FOR AVAILING ANY TECHNIC AL SERVICE. IT IS A DIFFERENT MATTER THAT THE MOVIE IS EXHIBITED ON SCR EEN BY WAY OF SOME TECHNICAL INPUT. TAKE ANOTHER EXAMPLE OF A PERSON B OARDING A BUS OR TRAIN BY PURCHASING THE REQUISITE TICKET. IT CANNOT BE SAID THAT THE PERSON IS MAKING PAYMENT FOR TECHNICAL SERVICES. NO DOUBT BUS OR TRAIN IS MADE BY SUFFICIENT TECHNICAL INPUT BUT THE USER OF THE SAME ON A NON- CUSTOMIZED BASIS CANNOT BE SAID TO BE MAKING PAYMEN T FOR ANY TECHNICAL SERVICES. IT IS THE BUS MANUFACTURER WHO AVAILS TECHNICAL SERVICES IN MAKING THE BUS. ONCE THE BUS IS MADE AN D BROUGHT ON ROAD FOR USE BY ANYONE, BOARDING ON IT IN LIEU OF TICKET , IS A PAYMENT FOR USE OF BUS AS A FACILITY AND NOT FOR TECHNICAL SERVICES WHICH WAS OBTAINED BY THE BUS MANUFACTURER AT THE TIME OF MAKING BUS. IN THE PRESENT AGE OF TECHNOLOGY MOST OF THE SERVICES AVAILED BY US AR E RESULT OF SOME TECHNICAL INPUT. THE USAGE OF SUCH FACILITY ON PAYM ENT BASIS CANNOT BE DESCRIBED AS FEES FOR TECHNICAL SERVICES. 15. COMING BACK TO THE FACTS OF THE INSTANT CASE IT IS NOTICED THAT THE ASSESSEE MADE PAYMENT TO NSICT FOR THE MOVEMENT OF THE CONTAINERS FROM OR UPTO THE VESSEL. IN ORDER TO FACILITATE THE MOVEMENT OF CONTAINERS, NSICT PROVIDED THE SERVICES OF DIFFEREN T TYPES OF CRANES SUCH AS QUAY CRANES, RUBBER TYRE GANTRY CRANES AND RAIL MOUNTED GANTRY CRANES. THESE CRANES ARE USED FOR SPECIFIC P URPOSES ONLY. RUBBER TYRE GANTRY CRANES AND RAIL MOUNTED GANTRY C RANES ARE USED FOR LIFTING THE CONTAINERS FROM CUSTOMERS TRAILER/RAIL WAGONS AND QUAY CRANES ARE USED FOR MOVING CONTAINERS FROM TRAILERS AT THE QUAY SIDE ON TO THE VESSEL. WHEN THE ASSESSEE MADE PAYMENT TO NS ICT IT WAS MEANT FOR USING THE FACILITY OF CRANES PROVIDED BY THEM FOR THE MOVEMENT OF CONTAINERS AND NOT FOR AVAILING ANY TEC HNICAL SERVICES WHICH MAY HAVE GONE INTO THE MAKING OF CRANES. NSIC T OPENED ITS DOORS OF SERVICE TO ONE AND ALL. ANYBODY INTERESTED IN MOVEMENT OF CONTAINERS COULD AVAIL THE FACILITY. THE ASSESSEE H AS ALSO MADE PAYMENT ON BILL TO BILL BASIS. IN OTHER WORDS, PAYM ENT WAS MADE FOR USER OF A STANDARD FACILITY PROVIDED BY NSICT, SPEC IFICALLY FOR THE MOVEMENT OF CONTAINERS FROM OR TO THE VESSEL. 16. THE AO HAS HEAVILY RELIED ON THE FACT THAT NSIC T WAS REGISTERED FOR THE PURPOSE OF PAYMENT OF SERVICE-TAX. IT WAS CLARI FIED BY NSICT TO THE LEARNED CIT(A), VIDE THEIR LETTER DT. 2ND JAN., 200 9, THAT THEY WERE REGISTERED UNDER THE CATEGORY OF 'PS AND MC'. 'PS' STANDS FOR PORT SERVICES. THEY ADMITTED THAT ALL THE SERVICES RENDE RED BY THEM WERE COVERED UNDER PORT SERVICES. THEY ALSO ADMITTED THA T THEY HAD NOT RENDERED ANY MC (MANAGEMENT CONSULTANCY) SERVICES. THE LEARNED AUTHORISED REPRESENTATIVE HAS PLACED ON RECORD A TE XT OF S. 65(82) OF THE FINANCE ACT, 1994 DEFINING 'PORT SERVICES' AS U NDER : 'PORT SERVICES MEAN SERVICES RENDERED BY A PORT OR ANY PERSON AUTHORIZED BY THE PORT IN ANY MANNER IN RELATION TO THE VESSEL OR GOODS. SUCH SERVICES INCLUDE MOVEMENT OF SHIPS AND VESSELS , MOVEMENT OF ITA NO. 2361/MUM/2015 M/S. CMA CGM GLOBAL INDIA PVT. LTD 7 CARGO AND GOODS INTO AND OUT OF THE PORT ETC. SERVI CES PROVIDED AT PORTS ARE CONTAINED IN CHAPTER V ON WORKS AND SERVICES TO BE PROVIDED AT PORTS OF THE MAJOR PORT TRUST ACT, 1963.' 17. FROM THE MANDATE OF S. 65(82) OF FINANCE ACT, 1 994 IT IS VIVID THAT PORT SERVICES CONSIST OF CARGO HANDLING, DOCK SERVI CES AND CONTAINER HANDLING SERVICES. WHEN WE VIEW THE REGISTRATION OF NSICT AS THE ONE UNDER THE CATEGORY OF `PS AND MC ALONG WITH THE FA CT THAT THE ASSESSEE PAID FOR THE MOVEMENT OF CONTAINERS OF ITS CUSTOMERS, THERE REMAINS NO DOUBT THAT NSICT, IN FACT, MAINTAINED DI FFERENT TYPES OF CRANES FOR THE PURPOSE OF PROVIDING CARGO HANDLING SERVICES. THE REGISTRATION OF ANY PERSON FOR THE PURPOSE OF SERVI CE-TAX, NO DOUBT PRESUMES THAT SOME SORT OF SERVICES ARE PROVIDED BY HIM WITHIN THE MEANING OF FINANCE ACT, 1994, BUT THAT DOES NOT MEA N THAT SUCH SERVICES ARE ONLY IN THE CATEGORY OF TECHNICAL SER VICES UNLESS THE PRESCRIPTION OF EXPLN. 2 TO S. 9(1)(VII) IS FULFILL ED. A PAYMENT TO BE COVERED UNDER S. 194J SHOULD BE FEES FOR TECHNICAL SERVICES AND SUCH FEES SHOULD BE FOR RENDERING OF ANY TECHNICAL, MANA GERIAL OR CONSULTANCY SERVICES AND NOT ANYTHING ELSE. IN ORDE R TO ROPE IN ANY SERVICE PROVIDER WITHIN THE NET OF S. 194J, IT IS O F PARAMOUNT IMPORTANCE TO CHECK THE TRUE NATURE OF SERVICE PROVIDED ON THE TOUCHSTONE OF THE MANDATE OF THIS PROVISION ALONE. IF THE CONDITIONS OF S. 194J R/W S. 9(1)(VII) EXPLN. 2 ARE NOT FULFILLED, THE LIABILITY UNDER THIS SECTION IS RULED OUT. 18. IN THE CASE OF SKYCELL COMMUNICATIONS LTD. (SUP RA), THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF PROVIDING CELLULAR M OBILE TELEPHONE SERVICE TO SUBSCRIBERS. THE DEPARTMENT TOOK THE VIE W THAT THE PAYMENTS MADE BY THE SUBSCRIBERS TO THE ASSESSEE BE TREATED AS COVERED UNDER S. 194J AS FEES FOR TECHNICAL SERVICE S. REJECTING THIS CONTENTION, THE HONBLE MADRAS HIGH COURT HELD THE MERE COLLECTION OF A FEE FOR USE OF A STANDARD FACILITY PROVIDED TO ALL THOSE WILLING TO PAY FOR IT DOES NOT AMOUNT TO THE FEE HAVING BEEN RECEIVED FOR TECHNICAL SERVICES. IT WAS FURTHER HELD THAT WHEN A PERSON DE CIDES TO SUBSCRIBE TO A CELLULAR TELEPHONE SERVICE IN ORDER TO HAVE TH E FACILITY OF BEING ABLE TO COMMUNICATE WITH OTHERS, HE DOES NOT CONTRACT TO RECEIVE A TECHNICAL SERVICE. WHAT HE DOES AGREE TO IS TO PAY FOR THE US E OF THE AIRTIME FOR WHICH HE PAYS A CHARGE. THE FACT THAT THE TELEPHONE SERVICE PROVIDER HAS INSTALLED SOPHISTICATED TECHNICAL EQUIPMENT IN THE EXCHANGE TO ENSURE CONNECTIVITY TO ITS SUBSCRIBER, DOES NOT ON THAT SCORE, MAKE IT A PROVISION OF TECHNICAL SERVICE TO THE SUBSCRIBER. 19. SIMILARLY IN THE CASE OF ESTEL COMMUNICATIONS ( P) LTD. (SUPRA) IT HAS BEEN HELD THAT WHERE THE ASSESSEE MADE PAYMENT FOR USE OF INTERNET BANDWIDTH, IT WAS USING INTERNET BANDWIDTH OF US PA RTY T FOR PROVIDING ACCESS TO ITS SUBSCRIBERS AND THE TRIBUNAL WAS JUST IFIED IN COMING TO THE CONCLUSION THAT NO TECHNICAL SERVICES WERE PROV IDED BY T TO THE ASSESSEE WITHIN THE MEANING OF S. 9(1)(VII) AND HEN CE THE ASSESSEE WAS NOT OBLIGED TO DEDUCT TAX AT SOURCE FROM PAYMENT MA DE TO THAT PARTY. 20. THIS CASE CAN BE VIEWED FROM ANOTHER ANGLE ALSO . THERE ARE MANY SECTIONS IN CHAPTER XVII OF THE ACT REQUIRING DEDUC TION OF TAX AT SOURCE ITA NO. 2361/MUM/2015 M/S. CMA CGM GLOBAL INDIA PVT. LTD 8 ON CERTAIN PAYMENTS, WHICH REQUIRE THE USE OF MACHI NERY IN DIRECT OR INDIRECT MANNER. E.G. EXPLN. III TO S. 194C DEFINES WORK AS INCLUDING (B) BROADCASTING AND TELECASTING INCLUDING PRODUCTI ON OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING. IT IS OBVIOUS THAT THIS ACTIVITY CANNOT BE DONE WITHOUT THE USE OF SOME SOPHISTICATE D MACHINERY. SIMILARLY S. 194-I REQUIRES DEDUCTION OF TAX AT SOU RCE FROM RENT. EXPLANATION TO THIS SECTION DEFINES RENT TO MEAN PAYMENT FOR THE USE OF INTER ALIA (E) PLANT; (F) EQUIPMENT. THIS IS A D IRECT PAYMENT FOR THE USE OF MACHINERY. NO MACHINERY OR EQUIPMENT CAN BE MANU FACTURED WITHOUT SOME SORT OF TECHNICAL SERVICE. IF WE ACCEP T THE VIEW TAKEN BY THE AO IN THIS CASE THAT THE PAYMENT FOR USE OF ANY MACHINERY, OR EQUIPMENT OR FACILITY, WHICH IN TURN, INVOLVES THE INPUT OF SOME TECHNICAL INFORMATION IN ITS MAKING, IS TO BE CONSI DERED AS FEES FOR TECHNICAL SERVICES, THEN THE PAYMENTS IN ALL SUCH C ASES SHALL BE COVERED UNDER S. 194J AND THE OTHER SECTIONS, AS TA KEN NOTE OF ABOVE, WOULD BE RENDERED AS A REDUNDANT PIECE OF LEGISLATI ON. IT IS AXIOMATIC THAT IT CANNOT BE THE CASE. 21. IN VIEW OF THE FOREGOING DISCUSSION WE HOLD THA T THERE WAS NO LIABILITY ON THE ASSESSEE TO DEDUCT TAX AT SOURCE F ROM THE PAYMENTS MADE TO NSICT WITHIN THE MEANING OF S. 194J AND THE LEARNED CIT(A) WAS JUSTIFIED IN HOLDING SO. 22. NOW LET US EXAMINE AND EVALUATE THE CONTENTION OF THE ASSESSEE THAT THE PAYMENTS MADE TO NSICT ARE COVERED UNDER S . 194C OF THE ACT. THIS SECTION MANDATES THAT ANY PERSON RESPONSI BLE FOR PAYING ANY SUM TO ANY RESIDENT FOR CARRYING OUT ANY WORK INCLU DING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK IN PURSUANCE OF CO NTRACT BETWEEN THE CONTRACTOR AND THE PERSONS SPECIFIED, SHALL AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTH ER MODE, WHICHEVER IS EARLIER, SHALL DEDUCT INCOME-TAX AT SOURCE AT TH E SPECIFIED RATE. EXPLANATION III BELOW S. 194C(2) DEFINES THE EXPRES SION 'WORK', WHICH IS RELEVANT FOR OUR PURPOSES. CLAUSE (C) OF THIS EX PLANATION PROVIDES THAT THE EXPRESSION 'WORK' SHALL ALSO INCLUDE : CA RRIAGE OF GOODS AND PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN BY R AILWAYS. A CURSORY GLANCE ON CL. (C) OF EXPLN. III BRINGS OUT THAT CARRIAGE OF GOODS BY ANY MODE OF TRANSPORT OTHER THAN BY RAILWAYS HAS BE EN INCLUDED IN THE DEFINITION OF 'WORK' AS APPLICABLE TO S. 194C. CARR IAGE OF GOODS MEANS THE MOVEMENT OF GOODS FROM SOURCE TO DESTINATION. I N CASE OF EXPORTS, SOURCE IS THE GODOWN OF CUSTOMER AND THE DESTINATIO N IN INDIA IS VESSEL AND VICE VERSA IN CASE OF IMPORTS. THE GOODS MAY RE ACH FROM SOURCE TO DESTINATION IN ONE OR MORE TRIPS AND THAT TOO WITH THE HELP OF ONE OR MORE MODES OF CARRIERS. IF THE JOURNEY OF GOODS IS BROKEN AND DIFFERENT MODES ARE EMPLOYED IN FACILITATING THE LIFTING OF G OODS FROM SOURCE TO FINAL DESTINATION, SUCH BROKEN UP JOURNEYS ALSO AMO UNT TO CARRIAGE OF GOODS TO THE FINAL DESTINATION. REVERTING TO THE FA CTS OF THE INSTANT CASE IT IS DISCERNIBLE THAT THE ASSESSEE WAS MAKING AVAI LABLE THE CONTAINERS ON CUSTOMERS TRAILERS/RAIL WAGONS, WHICH WERE LIFT ED FROM SUCH TRAILERS/RAIL WAGONS ON THE CRANES BY NSICT AND WER E THEN MOVED FROM YARD TO VESSEL SIDE. THIS MOVEMENT OF CARGO IS PART OF THE JOURNEY ITA NO. 2361/MUM/2015 M/S. CMA CGM GLOBAL INDIA PVT. LTD 9 OF THE CONTAINER FROM THE PLACE OF SOURCE TO THE PL ACE OF DESTINATION, WHICH IS VESSEL. THE ASSESSEE MADE PAYMENT FOR CARR IAGE OF GOODS FROM THE CUSTOMERS TRAILERS UPTO THE VESSEL IN CAS E OF EXPORT AND VICE VERSA IN CASE OF IMPORT OF GOODS. THIS PAYMENT CANN OT BE CHARACTERIZED AS ANYTHING OTHER THAN FOR THE CARRIAGE OF GOODS. W HEN WE VIEW EXPLN. III (C) BELOW S. 194C(2) IT BECOMES APPARENT THAT T HE PAYMENT MADE BY THE ASSESSEE TO NSICT IS COVERED WITHIN THIS PROVIS ION AND THE ASSESSEE RIGHTLY DEDUCTED TAX AT SOURCE UNDER S. 19 4C OF THE ACT. 23. AT THIS JUNCTURE WE ARE REMINDED OF THE WELL-SE TTLED RULE OF GENERALIA SPECIALIBUS NON DEROGANT WHICH PROVIDE S THAT THE SPECIAL PROVISIONS OVERRIDE GENERAL PROVISIONS. IN OTHER WO RDS, IF A SPECIAL PROVISION HAS BEEN ENACTED DEALING WITH A PARTICULA R THING OR SITUATION, THEN THAT PARTICULAR THING OR SITUATION IS GOVERNED BY SUCH SPECIAL PROVISION ALONE. APPLICATION OF GENERAL PROVISIONS STANDS EXCLUDED ON THAT. THIS RULE HAS GOT THE SANCTION FROM SEVERAL C OURTS IN THE COUNTRY INCLUDING THE HONBLE APEX COURT IN BRITANNIA INDUS TRIES LTD. VS. CIT (2005) 198 CTR (SC) 313 : (2005) 278 ITR 546 (SC) A ND THAT OF THE HONBLE JURISDICTIONAL HIGH COURT IN FORBES FORBES CAMPBELL & CO. LTD. VS. CIT (1994) 119 CTR (BOM) 319 : (1994) 206 ITR 4 95 (BOM). COMING BACK TO THE FACTS OF THE PRESENT CASE WE FIND THAT THE PAYMENTS MADE TO NSICT ARE STRAIGHTWAY COVERED UNDER EXPLN. III(C ) BELOW S. 194C(2). THIS BEING A SPECIFIC PROVISION ENCOMPASSING THE PA YMENT OF CARRIAGE, THE PROVISIONS OF S. 194J, WHICH ARE GENERAL IN THE CONTEXT OF NOT SPECIFICALLY DEFINING THE MEANING OF TECHNICAL SER VICES, CANNOT BE APPLIED. 3.2.2 THE COORDINATE BENCH IN ITS ORDER IN THE ASSE SSEES OWN CASE FOR A.Y. 2004-05 (SUPRA), FOLLOWING THE AFORESAID DECISION O F ITAT MUMBAI IN THE CASE OF MERCHANT SHIPPING SERVICES P. LTD. (SUPRA), DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE HOLDING AS UNDER AT PARAS 2 TO 4: - 2. THE ASSESSEE IS A CARGO SHIPPING COMMISSION AGE NT. IT HAD MADE PAYMENT TO NHAVA SHEVA INTERNATIONAL CONTAINER TERMINAL (NSICT) FOR AVAILING COMPOSITE SET OF SERVICES SUCH AS STEVEDORING, LOADING & UNLOADING ETC. THE ASSESSEE HAD DEDUCTED TAX AT SOURCE U/S 194C OF THE ACT ON THE PAYMENT SO MADE BY IT @ 2.05%. THE AG TOOK THE VIEW THAT THE NSICT IS PROVIDING MANAGERIA L SERVICES TO THE ASSESSEE AND HENCE THE ASSESSEE SHOULD HAVE DEDUCTE D TAX AT SOURCE U/S 1943 OF THE ACT @5.125%. ACCORDINGLY THE AG TREATED THE ASSESSEE AS AN ASSESSEE IN DEFAULT AND ACCORDINGLY RAISED DEMAND U/S 201(1) FOR SHORT DEDUCTION OF TAX AT SOURCE AND ALSO CHARGED INTEREST U/S 201(1A) OF THE ACT IN BOTH THE YEARS U NDER CONSIDERATION. 3. THE LD CIT(A) NOTICED THAT AN IDENTICAL ISSUE H AS BEEN CONSIDERED BY MUMBAI BENCH OF TRIBUNAL IN THE CASE OF MERCHANT SHIPPING SERVICES (ITA NO.192 & CO 137/MUM/2010), W HEREIN IT WAS HELD THAT THE PAYMENTS MADE TO NSCIT FOR IDENTI CAL SERVICES RENDERED BY IT TO THE ASSESSEE THEREIN WAS LIABLE F OR TAX DEDUCTION AT SOURCE U/S 194C OF THE ACT. ACCORDINGLY THE LD CIT( A) SET ASIDE THE ITA NO. 2361/MUM/2015 M/S. CMA CGM GLOBAL INDIA PVT. LTD 10 ORDERS PASSED BY AO BY FOLLOWING THE TRIBUNAL DECIS ION, REFERRED ABOVE. 4. WE HEARD THE PARTIES ON THIS ISSUE AND PERUSED THE RECORD. SINCE THE LD. CIT(A) CIT(A) FOLLOWED THE DECISION RENDERED BY THE CO- ORDINATE BENCH OF TRIBUNAL ON IDENTICAL ISSUE, WE D O NOT FIND ANY REASON TO INTERFERE WITH HIS DECISION. THE OPERATIV E PORTION OF THE ORDER PASSED BY THE TRIBUNAL IN THE CASE OF MERCHAN T SHIPPING SERVICES (SUPRA) HAS BEEN EXTRACTED BY THE LD CIT(A ) IN HIS ORDER. ACCORDINGLY WE CONFIRM THE ORDER PASSED BY THE LD C IT(A). FOLLOWING THE DECISION OF THE COORDINATE BENCH IN THE ASSESSEES OWN CASE FOR A.Y. 2004-05 (SUPRA) AND THE CASE OF MERCH ANT SHIPPING SERVICES P. LTD. (SUPRA) WE SUSTAIN THE IMPUGNED ORDER OF TH E CIT(A) IN HOLDING THAT THE PAYMENTS MADE BY THE ASSESSEE TO NSICT ARE COVE RED UNDER SECTION 194C OF THE ACT AND NOT UNDER SECTION 194J OF THE A CT AND THEREFORE THE ASSESSEE HAS RIGHTLY MADE DEDUCTION OF TAX AT THE R ATES APPLICABLE UNDER SECTION 194C OF THE ACT. WE HOLD AND DIRECT ACCORDI NGLY. CONSEQUENTLY, FINDING NO MERIT IN THE GROUNDS RAISED BY REVENUE, WE DISMISS THEM. 4. IN THE RESULT, THE REVENUES APPEAL FOR A.Y. 2005-0 6 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD DECEMBER, 2016. SD/ - SD/ - (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 23 RD DECEMBER, 2016 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -59, MUMBAI 4. THE CIT (TDS) - 1, MUMBAI 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.