2017 (2) TMI 1231 - AT - Service Tax

Cargo Handling Services - the assessee-Appellants had been mainly providing services of packing of GSSP power manufactured in the factory as per the work order given to them by M/s Bohra Industries Ltd. - The contracts clearly indicate that this was executed for packing of GSSP. Filling, weighing and stitching are part of the packing activity for stacking and shifting of the bags adjunct to loading point - Held that - an identical issue was decided by the Hon ble Allahabad High Court in the case of Commissioner of Central Excise vs Manoj Kumar, 2012 (9) TMI 941 - ALLAHABAD HIGH COURT where it was held that The sugar bags were not to be loaded or unloaded for any movement outside the factory on public roads, on any ships, airplane or trucks for onward movement to any destination. The activities will fall within the meaning of transportation of goods, and would certainly not be included in the definition of Cargo Handling Service , which is the service exigible to service tax - appeal allowed - decided in favor of appellant-assessee.

Summary

Issues:
Interpretation of services provided for packing of goods and whether they constitute 'Cargo Handling Service' liable to Service Tax.

Analysis:
The case involved an appeal by the assessee against an order-in-appeal passed by the Commissioner of Central Excise (Appeals), Jaipur-II, for the period from July 2003 to September 2004. The assessee had been providing services of packing GSSP power as per work orders given to them by another company. The services included filling, weighing, stitching, and shifting of bags, which were considered part of the packing activity. The dispute arose when the department alleged that these services fell under 'Cargo Handling Service' liable to Service Tax. The contracts clearly indicated that the services were related to packing of goods, and the rates for these services were specific and categorical.

During the proceedings, it was noted that a similar issue had been decided by the Hon'ble Allahabad High Court in a previous case. The High Court had observed that activities such as loading, unloading, packing, unpacking, stacking, re-stacking, and shifting of goods within a factory premises do not constitute 'Cargo Handling Service' subject to Service Tax. Following this precedent, the Appellate Tribunal found no reason to uphold the impugned order and set it aside. Consequently, the appeal filed by the assessee was allowed, ruling in their favor.

In conclusion, the Tribunal's decision was based on the interpretation of the services provided by the assessee for packing goods and whether those activities could be categorized as 'Cargo Handling Service' liable to Service Tax. The Tribunal relied on a previous judgment to determine that the services in question, involving activities within the factory premises, did not fall under the definition of 'Cargo Handling Service.' As a result, the impugned order was set aside, and the appeal by the assessee was allowed.