BEFORE THE APPELLATE TRIBUNAL SINDH REVENUE BOARD

APPEAL No. ATIl73 OF 2015

Mis. Pak Shaheen Container Services (Pvt) Ltd24-27, Reclaimed Area, Timber Pond,Pak Shaheen Avenue,Keamari Town,Karachi APPELLANT

Versus

Commissioner (Appeals), SRB, Karachi RESPONDENT

For the AppellantFor the Respondents

Represented Syed Sibte Asif Naqvi, ITPRepresented by Mr. Zamir Ali Khalid, Deputy Commissioner(Legal) & Ms. Anum Sheikh Assistant Commissioner Unit-14,Sindh Revenue Board

ORDER

Date of HearingDate of Order

09.07.2015.05.08.2015.

RAZIA SULTANA TAHER. An appeal has been filed by the Appellant, challenging the

Order-in-Appeal No. 108 of 2015, dated 07-05-2015, passed by the Commissioner (Appeals)

confirming the Order-in-Original No. 559 of 2014 dated 27-10-2014 passed by the Assistant

Commissioner, SRB Unit-14 . The said order directs the Appellant to pay Sindh Sales Tax

amount of Rs. 3,843,456/- on account of baving provided or rendered taxable services of

contractual execution of work and also baving short declared the same for the tax period July

2012 to June 2013, alongwith default surcharge (to be calculated at the time of payment). In

addition, also ordered the payment of penalty of Rs. 192,173/-.

2. In brief, the facts of the case as stated in the Order-in-Original are that while comparing

the Financial Statements with Sales Tax Returns for the tax period July 2012 to June 20] 3, it

transpired that Mis Pak Shaheen Container Services (Pvt.) Ltd hereinafter referred to as

'P SC S' or as 'th~PCllant' earned revenue of Rs. 28,351,000/-, which invol ved Sindh Sa1';.----'

Tax of Rs. 4,536,1601- from the services of contractual execution of work and an amount of

Rs. 17,953,993/- which involved Sindh Sales Tax of Rs. 2,872,6391- from Terminal Operator

but they had failed to pay Sindh Sales Tax on these services.

3. The concerned Assistant Commissioner, in the Order-in-Original No. 559 of 2014,

observed and concluded that the Appellant had accepted the tax liability of Rs. 2,520,428/- and

had deposited the sum of Rs. 600,000 vide CPR No. S120 1409120250 1073486 without

payment of default surcharge. Thus, the Appellant was ordered to deposit the remaining Sindh

Sales Tax amount of Rs. 1,920,428/- and the default surcharge on the amount of Rs.

2,520,428/- (to be calculated at the time of payment), under Section 44 of the Sindh Sales Tax

on Service Act, 2011, in the Sindh' s Government head of account' B-023 84'. They were also

ordered to pay the penalty of Rs. 126,0211-, in terms of Section 43(3) of SST on Service, Act

2011 for violation of sections 8 and 17 of the SST on Services Act, 2011 (hereinafter referred

to as "SSToS Act, 2011).

4. In the said order it was further stated that the Appellant provided or rendered taxable

services of contractual execution of work and had short declared its taxable services involving

sales tax Rs. 3,834,4561- which was assessed under section 23(1) of the SSToS Act, 2011 as

tax payable. The said amount was also ordered to be recovered under section 47(1 A) of SSToS

Act, 2011, alongwith default surcharge under section 44 of SSToS Act, 2011. An amount of

Rs. 1,92,173/- was also ordered to paid as penalty under section 43(3) of SSToS Act, 2011 for

violation of sections 8 and 17of the said Act.

5. The Commissioner (Appeals), in his order at paragraph 32, stated that the Appellant

vide reference bearing no nil dated 03.12.2014 SRB Inward No 53123 dated 03.12.2014 had

already deposited admitted liability along with default surcharge amounting to Rs 2,942,0191

vide 3 CPRs bearing Nos: Sl-20140912-0250-1073486 for RS 6,00,0001- Sl-20141124-1069-

11695524 Rs 1,500,0001- and S1- 20141126-1069-1189710 for Rs 842,0191- short payment on

account of rendering and providing taxable services falling under the tariff heading 9819.9090

i.e Terminal Operater services.

6. Thereafter, the Commissioner Appeals, SRB dismissed the appeal and also upheld

paragraphNo. 21of theordefor;g;nay

7. The Appellant, in the grounds of appeal and m subsequent written and oral

submissions, have stated as follows:-

(i). That they are doing business of rendering of services on account off-Dock Terminal

Operators. The Sales tax was wrongly levied on the services rendered on account of lift on! lift

off and Maintenance of Repair (MnR), as the same have not specifically been defined under

the respective Tariff Heading nor in relevant rules i.e. rule 40 for the purpose of the

chargeability of the Sales Tax.

(ii). That under the law, the services which are taxable under one tariff heading of the

Second Schedule cannot be taxed under another tariff heading i.e. 9809.0000. The services

provided or rendered by the Appellant were included in the Second Schedule to the SST on

Services Act, 2011 under tariff Heading 9819.9090 "Services Provided or rendered by Port

Operators, Airport Operators, Airport Ground Service Providers & Terminal Operators" and

the legislature only mentioned 'Other import related services provided in Port Area and

Terminal Area'.

(iii). That the maintenance receipts were brought within the ambit of SST vide Finance

Act,20 14, in Second Schedule of the SST on Services Act 2011 under Tariff Heading

9822.2000 which implies that maintenance receipt prior to the insertion of separate tariff

heading were not liable to tax during the tax period under review.

(iv). That relevant rule 40 was amended vide notification No-SRB-3-4/13/2014 dated 1st

July, 2014 for chargeability of said receipt and, therefore, the taxpayer could not be charged for

providing services prior to be said amendment.

(v). That the Appellant earned revenue from execution of contractual work. The statement

was made as an alternative plea to support their primary stance that the nature of services of

Maintenance & Repair of containers performed was not within the scope of chargeability of

sales tax under the Act read with rule 40 of SSToS Rules, 2011.

8. The Appellant further submitted that the other dispute is bifurcation of income of MnR

and LOLO. The amount of MnR was enhanced from 7.1 million to Rs. 24.02 million and

added that, the value of LOLO was declared as Rs. 2l.21 million which was reduced to Rs. 4.3

million. While enhancing the amount ofMnR, the amount relating to Storage & Transportation

9. It was also argued that, services rendered on account of lift on I lift off (LOLO) and

Maintenance & Repair (MnR) services being ancillary services performed by a terminal

operator outside the port area were not liable to SST. Under the law only services provided by

the terminal operators within the Port area were chargeable to the Sales Tax. The technical

lacuna which existed in rule 40 was subsequently rectified by the legislature by amending the

relevant rule 40 vide Notification NO:SRB-3-41l3/2014 Dated 1st July,2014. Thus perusal of

the previous and amended rule 40 would show that, the word 'POI1 Area & Terminal Area'

have been removed & import related services have been elaborated. Further sub-rule (2) of rule

40 has been added whereby all the services of Terminal Operator within the fold of taxable

services have been wrapped. Thus, with the amendment in rule 40, it is conclusively

established that LOLO and M&R services prior to amendment of the said Rule were not

subject to tax.

10. Furthermore, it was argued that invoking of the provision of sub-section (1 A) of

Section 47 for recovery of alleged short payment of sales tax on LOLO and MnR was not

justified, as the same were not chargeable to Sales Tax under the Act and rules framed

thereunder. Here, the nonpayment was not hit by Section 47 (lA), as it was a matter of

difference of opinion of the taxability of services where no fraud or misstatement was

involved. The Appellant representative stated that all relevant case record and data had been

provided to the Department.

11. The Appellant placed reliance upon the following reported judgements (i) (1971

SCMR) MIS HIRJINA & Co. (Pakistan) Ltd, Karachi-Appellant Vis Commissioner of Sales

Tax Central, Karachi. Interpretation of Statutes-Taxing Statutes-Court cannot imply anything

not expressed in statute.

(ii). 1973 SCMR 445 Commissioner of Agricultural Income Tax East Bengal Vs. BWM

Abdur Rehman Manager -------- Interpretation of Statutes -Fiscal legislation-whether or a

particular matter in within a taxing statute-Only the letter of the Law must be looked to- No

room for any intendment to equity or presumption about tax.

(iii). 2006 PTD 1709 Commissioner of Income Tax East Zone Karachi vis Mis W.J Towel &

Co Agencies (Kuwait) Karachi Income Tax Reference No 70 and 232 of 1998, decided on 14th

April, 2006. Interpretation of Statutes. Tax law --- While interpreting any provision of law and

more particularly a taXF plain language of the law is to be looked into .... Words used bV

the Legislature are to be interpreted and they are not to be substituted or changed, as there is no

room for any intendment if the language used by the Legislature is clear and unambiguous. (iv)

(2009) 100 Tax 49 (H.C.Kar). (IN THE SINDH HIGH COURT KARACHI PAKISTAN

PETROLEUM LIMITED VIS COMMISSIONER OF INCOME TAX & OTHERS).

Interpretation of Statute-Words-Plain Meaning -Principle whether while

interpreting statute words should be read in its plain meaning and no words should be added or

deleted to arrive at interpretation of the statute.

12. Mr. Zamir Khalid D.C, argued that if the institution is listed in the schedule and

connotation service is used against that institution, all services provided by that institution are

taxable. It was further argued that exemption notification was not applicable to the Appellant

for the reason that the appellant was only providing services and the invoices produced by the

appellant do not contain any provision of supply of goods. The D.C relied upon un-reported

judgement in the case of MIS J.S Bank Ltd. Vis SRB c.p N0.4420/20 14 and judgement in the

case of Federation of Pakistan VIS Haji Mohammad Sadiq & Others 2007 PTD 67. In this case

it was held as follows:-

"A perusal of column-Il of the schedule speaks about the services

provided or rendered y banking companies etc. in respect of advance

made to any person. It is to be kept in mind that above discussion as it

has already been held that institutions named in column-Il of Item 14.14

provides service in respect of advance made to any person. It is also to be

observed that the word 'services' used in this column, represents to more

than one services. Thus, the arguments put forwarded on behalf of the

Respondents' counsel that as in the case of Hirjina (ibid) services were

specified, therefore, to that extent the item of the schedule discussed

therein is valid and in the item under discussion this expression has not

defined, therefore, on account of vagueness the provision has no

substance. The word 'services' in plural sense is sufficient to conclude

that it covers all the services provided by the institutions named in

column-Il to its customers, therefore, the legislation instead of spelling

out each kind of the service comparing to the item of the schedule 'which

were discussed in mrjinapse, a comprehensive expression =:

has been employed. Thus, it is held that no ambiguity or vagueness can

be attached to the contents of column-Il of the item J 4.14 for the

purposes of declaring the provisions vague or unspecified".

13. The Respondent submitted comments, wherein it has been stated that the Maintenance

and Repair (MnR) services are covered under tariff heading 9809.0000 as they are in the nature

of contractual services which is evident from the Agreement and have been provided outside

the Port area. In the instant case neither Rule 40 nor any sub-rule thereunder nor sub-section 98

of Section 2 of the Act-20 11 have any bearing on the services rendered by the Appellant

outside the port area. The stance that the chargeability of receipt on account of MnR services

was subject to tax by amendment in Rule 40 is not correct, that Rule 40 has been amended but

it has no applicability outside the port area.

14. The Respondent's representative stated that th MnR services being a service provided

or rendered in contractual execution of work, had been taxable with effect from 1sl July, 2011

and are covered under tariff heading 9809.0000. According to the guide lines on taxable

services under Act-2011, it is stated that taxable services falling under heading 9809.0000

comes within the ambit of section 3 of the Act 2011, when services provided or rendered by

persons engaged in contractual execution of work or furnishing supplies and are subject to SST

Act 16%. The tariff heading 9809.0000 covers all such contractual services as are not

specifically described in the First Schedule to the Act-20 11 and are also not listed in the

Second Schedule thereof but are provided or rendered or supplied under a contract, including

an agreement or a purchase I supply order against a tender. Thus, the services on account of

Maintenance and Repair of containers, under contractual agreements, came within the pu~view

of taxability - as the same fulfilled both the requirements, i.e. service was not specifically

described in First Schedule nor in Second Schedule to the Act-20 11 and the service had been

provided under contract agreements between the Appellant and MIS WAN Hai Lines Ltd

Taiwan and Florins Container Services Company Ltd. Hong Kong.

15. The Respondent further submitted that the difference of opinion does not prevent the

liability to penalty for the offence of short payment.

16. The Respondent added that, service of maintenance and cleaning falls under tariff

heading 9822.2000. The said service covers the maintenance and cleaning of buildings,

commercial corny and factories only, whereas, the repair & maintenance of containey

outside the Port Area does not fall under tariff heading 9822.2000. Furthermore, the Appellant

earned revenue of Rs. 28,351,000/- and did not pay the due amount of SST of Rs. 4,536,160/-

from the services of Contractual Execution of work.

17. I have heard the arguments by both the sides, perused the record and the two orders

passed by the two forums below. I have given due consideration to the Appellants argument

that services rendered by them as an off dock terminal operator, are defined under section

2(98) of the Sindh Sales Tax on Services Act, 2011 and the procedure prescribed in rule 40 of

Sindh Sales Tax on Services Rules, 2011, apply in relation to the Terminal Operator services

falling under tariff heading 9819.9090 of the Act. Ihave also given thought to their argument

that, certain other services have also been provided but the same are not liable to tax under the

Act because services which are taxable under one tariff heading of the Second Schedule (e.g.

9819.9090) cannot be taxed under another tariff heading i.e. 9809.0000. The contention so, put

forth by the Appellant has no force because in terms of section 2(96) of the SSToS Act, 2011,

read with section 3 (I) thereof, a service which is listed in the Second Schedule to the said Act

is to be treated as a taxable service. This is further amplified and clarified on a plain reading of

the provisions of rules 4(2) and 4 (3) of the SSToS Rules, 2011, which allows single

registration of a person providing or rendering more than one taxable service. The said rule

4(3) further states that where more than one taxable service is provided by a registered person,

he may make a single application mentioning therein all the services provided by him.

18. The second argument is that there was no intention on the part of the legislature to tax

the said services of terminal operators, as SST on Services Rules, 2011 under the old rule

40(1)(v) read as 'other import related services provided in port area and terminal area'. His

further argument is that a subsequent amendment was made in rule 40 sub-rule (1) of SST on

Services Rules, 2011 by deleting the word in "port area and terminal area" and insertion of

sub-rule (2) to rule 40 wrapped up all the services of terminal operator. The Appellant argued

that the said amendments were made on 1st]uly,2014 and the services in the instant case

pertains to period prior to the amendment. The amendments made in rule 40 of SST on

Services Rules, 2011. On perusal of the records of the case, we find that the Appellant provides

2 distinct and independent taxable services of which one is this service of Terminal Operators

(tariff heading 9819.9090) and the other is the service of contractual execution of work(tariff

heading 9809.0000). The prOVISIOns

}-of rule 40 are specific for the services provided /

rendered as terminal operators. The services of contractual execution of work(tariff heading

9809.9090,there is no specific procedural rule in the SSToS Rules,2011 and, therefore, this

service and the service provider shall be governed by the general procedure of rules 24 to 29 of

the SSToS Rules,20 II. However, the service provider shall have one single registration in

relation to both the said services provided or rendered by him. The provision of rule 40 do not

absolve the Appellant from his liabilities and obligations as a service provider of contractual

execution of work or furnishing supplies under tariff heading 9809.0000, which is a taxable

service within the meaning of section 3(1) of the 2011-Act and is liable to Sindh Sales Tax

Act-2011.

19. Now coming to the third argument, the contention that AC enhanced the amount of the

receipts of maintenance and repair service (MnR) from Rs. 7.1 million to Rs. 24.02 million and

reduced the services LOLO from Rs. 21.21 million to Rs. 4.3 million. In reply the AC

submitted that the amount was calculated and determined on the basis of invoices then

provided to the department. The Appellant, at the time of hearing, acceded to the submission of

the AC and for the first time produced additional invoices at the Appellate stage, which were

not submitted at the original stage nor the same were produced or submitted before the

Commissioner (Appeals).

20. The citations relied upon by the Appellant have no relevancy to the facts in issue. To

bring the services of (contractual execution of work, distinct for terminal operator services)

rendered or provided in the instant case under rule 40 of SST on Services Rules, 2011 is simply

over-stretching of the services of 'terminal operators' as given in the said rule, whether before

or after the amendment as of 151 July, 2014, and is of no consequence.

21. In view of the fact, that complete documentslinvoices were not provided at the original

stage. There still exists disputes on the bifurcation of different services. I feel it is necessary to

provide proper opportunity to the Appellant to produce all relevant documentslinvoices upon

which he has placed reliance. I, therefore, in exercise of powers vested in the Tribunal as

provided under clause (b) of sub-section (5) 0 f section 62 of the SST on Services Act, 2011, set

aside the orders by the AC Unit-14 SRB, the Commissioner (Appeals) and remand the case to

the concerned AC-SRB to examine the documents/invoices, which would enable the

department to correctly determine which of the services provided or rendered under the

'contracts' are taxable under tarpeading 9809.0000. The Appellant are directed to prOVidj

relevant documents/information to the concerned AC-SRB who shall re-determine the tax

liability of the Appellant in the remanded case.

The Appeal is disposed of in the above terms.

~(}!J.-A ~~(Razia Sultana Taher)

Member

Karachi,Dated: 11-08-2015

Justice (Retired) Nadeem Azhar Siddiqi. I, have the privilege of goingthrough the opinion recorded by the learned Technical Member of theTribunal. While agreeing with the conclusion drawn in paragraph 20 of theorder recorded by the learned Member, SRB Appellate Tribunal, I expressmy observations, findings and conclusion as in the paragraphs following.

22.The grievance of the Appellant is charging of Sindh Sales Tax on Servicesrendered/provided by the appellant to its clients on account of Lift-On/Lift-Of (LOLO) and Maintenance & Repair (M & R) of containers. Thecontention of the appellant is that these services neither specificallydefined under the respective Tariff headings nor in the relevant RuleNo.40 framed for the purpose of chargeability of Tax from portoperators and terminal operators. He submits that the department hasenhanced the income from M&R to Rs.24.02 Million from Rs.7.1 Millionand income from LOLOwas reduced from 21.21 Million to Rs.4.3 Million.The other contention of the appellant is that the above services werebrought within the ambit of Sales Tax on Services vide Finance Act, 2014whereby Tariff Heading 98.22 and the entries relating thereto to wereintroduced to the Second Schedule of the Act. The appellant has alsochallenged the imposition of penalty and default surcharge and submitsthat there is an issue of interpretation and the department has failed toestablish wilful & deliberate default and intention not to pay the tax orevasion of tax on the part of appellant.

23)The contention of the department is that M & R services is coveredunder tariff heading 9809.0000 (services provided or rendered bypersons engaged in contractual execution of work or furnishing supplies)and are taxable since the inception of the Act of 2011. In this regard theDepartmental Representative submits that Tariff heading 9809.0000covers such services as are not specifically described in the FirstSchedule and are also not listed in the second schedule, but areprovided or rendered or supplied under a contract, including anagreement or a purchase or supply order against tender.Further contention of the respondent is that Tariff Heading 9822.0000

\lV

covers only the maintenance and cleaning of building, commercialcomplexes and factories and the repair and maintenance of containersoutside the port area does not fall under the Tariff heading 9822.0000and the maintenance outside the port area cannot be treated asmaintenance under Tariff heading 9822.0000 introduced vide FinanceAct 2014, w.e.f. 1st July, 2014. The Department defended the impositionof penalty and default surcharge by pleading that difference of opiniondoes not prevent the appellant from payment of penalty on account ofshort payment.

24)The appellant is registered as Terminal Operator under Tariff heading9819.0000 (Services provided or rendered by port operators, airportoperators, airport ground service providers and terminal operators). Thedisputes relates to the periods from July 2012 to June 2013. The serviceswhich were taxable at the relevant time were provided in rule 40 ofSindh Sales Tax on Services Rules, 2011. There is no dispute in thisregard. The dispute started when the income derived by the Appellanton account of services provided by it to its clients outside port arearelating to M&R of containers its storage and transportation was alsotaxed under some other tariff heading i.e. 9809.0000 (services providedor rendered by persons engaged in contractual execution of work orfurnishing supplies). The dispute relates to the Tax Periods from July2012 to June 2013. The appellant is discharging its obligation and paidconsiderable amount towards sales tax. During the stage of assessmenton 14.7.2014 the appellant has submitted a letter interalia pleaded asunder:-

Revenue Declared in the Sales Tax Returns Rs.130,522,708

"Revenue declared in the financial statements 2012-2013 Rs.176,738,OOO

Difference Rs. 46,215,292

Revenue relating to Diplomatic Missions Rs. 2,111,616

Revenue relating to M&R Rs. 7,139,019

Revenue relating to LOLO Rs.21,211,981 (Rs. 30,462,616)

Rs.15,752,676

Sales Tax @ 16% Rs. 2,520,428

The above said amount of Rs.15,752,676 may be said short declared but it was not

intentional and the registered did not collected sales tax on this revenue. The registered'

person wants to concentrate on his business do not want to go into litigation for this

amount. The sales tax of Rs.2,520,428/- @16% on the amount of Rs.15,752,676 may be paid

by the registered person. Your honour is requested to allow the registered person to pay the

said sales tax in 3 or 4 instalments".

(The Appellant has deposited the said amount of Rs.2,520,428/=, which fact is mentioned in

order in appeal).

From the above letter it appears that the appellant claims exemptionsfrom payment of sales tax on the following items.

"Revenue relating to Diplomatic Missions Rs. 2,111,616

Revenue relating to M&R Rs. 7,139,019

Revenue relating to LOLO Rs. 21,211,981 (Rs. 30,462,616)

25)The assessing officer has allowed exemption in respect of revenuerelating to diplomat missions. After making the payment ofRs.2,520,428/= as mentioned above the dispute remains in respect ofRs.24,021,600/= involving sales tax of Rs.3/843,456/= on account ofalleged rendering taxable services of contractual execution of work. (Theappellant disclose the value of M&R as 7,139,019/= while AssessingOfficer enhanced it to 24.02 million). It is an admitted position that theservices of M&R of containers are outside the port area and is notcovered by Tariff heading 9819-9090. The repealed rule 40 provides thatall import related services provided by a port operator and terminaloperator shall be levied to tax. The services which were taxable at therelevant time were mentioned under sub rule (1) of rule 40. Clause (v) ofsub rule 1 of rule 40 further provides that other import related servicesprovided in port area and terminal area. Admittedly the services of M&Rof containers were provided outside port area and the same is not partof the services specified under sub-rule (1) of rule 40. From rule 40 (v) itis clear that other import related services provided in port area andterminal area can be taxed. There is no discussion on the point thatwhether the services provided are relating to import related service ornot. The legislature in its wisdom has not tax certain services providedby Port or Terminal Operators outside the port area and the same

service cannot be taxed by implication. It is to be seen that storage

charges was introduced in Rule 40 w.e.f. 1st July, 2014. If the storage

charges can be taxed under Tariff heading 9809.0000 the introduction of

storage charges by way of amendment in Rule 40 is not necessary. For

interpretation of statutes levying taxes, it is established rule not to

extend their provision by implication, beyond the clear import of the

language used or to enlarge their operation so as to embrace matters

not specifically pointed out. In case of doubt they are construed most

strongly against the government and in favour of the tax payer. It is a

binding rule of construction that before taxing a person it must be

shown that he falls under the charging section as no tax could be

imposed by way of implication simpliciter. If a person has to be brought

within the ambit of the charging section it should be by clear words

otherwise he cannot be taxed at all.

26)The appellant is admittedly registered as a Terminal Operator and is

providing ancillary services of M&R of containers as the same service

appears to be part of its obligations towards its clients. The Tariff

heading 9809.0000 is a general heading to cover contractual execution

of work or furnishing supplies not falling in any other tariff heading. The

benefit under Tariff heading 9809.0000 can only be taken if the service

provided or rendered is not listed in the First or Second Schedule to the

Act and provided under a contract, including an agreement or a

purchase/supply order against tender. Tariff heading 9809.0000 has two

components i.e. providing or rendering services and furnishing supplies.

To attract 9809.0000 it is necessary that both the components are

available in the contract or agreement. This argument finds support

from the Exemption Notification No. SRB-3-4/7/2013 dated 18th June,

2013 which provides that "in relation to the work or supplies the total

value of which does not exceed 50 Million rupees in a financial year

subject to the condition that the value component of services in such

contractual execution of work or furnishing supplies also does not

exceed 10 million rupees. The other question is, whether furnishing

supplies can be taxed under the- Act of 2011. Since no arguments have

~

been advanced by the parties on this point this will be considered in

some other appropriate proceedings.

27)Once a person is registered in a particular heading and is providing

ancillary services not covered by such heading the services cannot be

taxed by taking benefits from some other heading of general nature.

The value of services rendered or provided on account of M&R of

containers is Rs.24,021,600/= which as per appellant also includes the

cost of repair, storage and transportation of containers and these type

of services are not taxable under Tariff heading 9819.9090 and cannot

be taxed under Tariff heading 9809.0000. Even if it is presumed that the

services of M&R is taxable under Tariff 9809.000 the amount involved is

Rs.24,021,600/= involving sales tax of Rs.3,843,456/=. The appellant

referred to Exemption Notification No. SRB-3-4/7/2013 dated

18.06.2013, which provides that in relation to work or supplies the total

value of which does not exceed 50 Million in a financial year subject to

the condition that value component of service in such contractual

execution of work or furnishing supplies also does not exceed 10 million

rupees. The value of services is less then RS.50 Million and the appellant

is entitled to the benefit of exemption. The Assessing Officer has not

done any exercise in this regard and tax was levied on the entire amount

of Rs.24,021,600/= without considering the implication of the

Exemption Notification. Furthermore the Assessing Officer enhanced the

value of M&R from RS.7.1 Million to Rs.24.02 Million and the value of

LOLO was reduced from 21.21 Million to 4.3 Million without any

discussion and justification. It appears that it was done just to enhance

the value to services to levy more sales tax, which apparently is not

proper. It is not known on what basis this has been done.

28) In view of the above both the orders of forum below are setaside. The

Assessing Officer shall decide the matter afresh after considering the

point of view of the appellant and after providing due opportunity of

hearing in the light of the above observations.

KarachiDated. 07.09.2015

deem Azhar Siddiqi)CHAIRMAN

ORDER OF THE TRIBUNAL

Accordingly, we setaside both the Order-in-Original No. 559/2014 dated

27.10.2014 and Order in Appeal No. 108/2015 dated 07.05.2015 as

passed by the Assistant Commissioner and the Commissioner (Appeals)

respectively, in this case and we remand the case to the jurisdiction of

the Assessing Officer to decide the case afresh on merits after affording

the tax payer due opportunity of hearing to plead his case and produce

documents and evidence in support of his arguments. While deciding

the case, the Assessing Officer shall decide the case on merits within 90

days from the date of this order, without being influenced by the

observations made by us hereinabove.

~u£~!~Member Chairman

Karachi.

Dated.07.09.2013

Copies Supplied to:

1) The Appellant through Authorized Representative

2) The Assistant Commissioner SRB for compliance

3) The Deputy Commissioner (Legal) SRB.

Copy for Information

4) The Commissioner Appeals, SRB

5) Guard File

6) Office File