ORDER
Jyoti Balasundaram, Vice President
1. I have heard both sides on the above appeal against the denial of service tax credit of Rs. 74,609/- on the ground that the tax was paid by service providers of Steamer Agent services for payment of service tax on output service of Cargo Handling and both services, do not fall within the same sub-clause of Clause (90) of Section 65 of Chapter V of the Finance Act, 1994. The Department relies upon Rule 3 of the Service Tax Credit Rules 2002 which reads as under:
Service tax credit: (1) An output service provider shaft be allowed to take credit (herein referred to as service tax credit) of the service tax paid on such input services, which fall in the same category of taxable service as that of output service, for which invoice/bill is issued on or after sixteenth day of August 2002.
(2) For the purposes of these rules two services shall be deemed to be falling in the same category of taxable service, if the input service and output service fall in the same sub-clause of Clause (90) of Section 65 of the Act.
The submission of the appellants is that since there is definite over lapping of the services provided by port service provider and steamer agent, therefore both the input and output service should be considered to fall in the same category as per Rule 3(i) and Rule 3(2) is only a deeming provision which cannot solely be relied upon for the purpose of denying service tax credit to the appellants. However, in view of the deeming provision which clearly states that two services shall be deemed to be falling in the same category of taxable service, if the input service and output service fall in the same sub-clause of Clause (90) of Section 65 of the Act, and undisputedly the input and output service do not fall within the same sub-clause – Cargo Handling services fall under Section 65(90)(zr) while steamer agent services fall under Section 65(90)(i), I therefore held that credit has been rightly disallowed to the appellants, uphold the impugned order and reject the appeal.
(Dictated in court)