2011 (7) TMI 483 - AT - Service Tax

Waiver of pre-deposit - Exempted under Notification No. 10/2002-ST, dated 1-8-2002 - As per Show-Cause Notice, there is no ground for demanding service tax as provider, of cargo handling service as held by Commissioner (Appeals) - Held that cargo handling service is exempted in relation to agriculture service vide Notification No. 10/2002-ST, dated 1-8-2002 - Decided in favour of assessee.

Summary

Issues:
1. Whether the applicant is liable to pay service tax for providing manpower recruitment and supply services.
2. Whether the applicant is correctly classified as a provider of cargo handling services.
3. Whether the service provided by the applicant falls under the exemption for cargo handling services related to agriculture.

Analysis:
The applicant filed applications seeking waiver of pre-deposit of service tax and penalties after Show-Cause Notices were issued alleging the provision of manpower recruitment and supply services. The adjudicating authority confirmed the demand and penalties, considering the applicant as a provider of such services. However, the Commissioner (Appeals) accepted the applicant's contention that they are not engaged in manpower recruitment or supply agency services but rather in cargo handling services. Consequently, the appeals were dismissed on the grounds of providing cargo handling services.

The main contention of the applicants was that the impugned order went beyond the scope of the Show-Cause Notice as it did not include any allegation regarding the provision of cargo handling services. The applicants were involved in a contract for the labor/cartage of shifting food grains in Punjab, which they argued did not constitute cargo handling services. They further pointed out that even if they were considered to be providing cargo handling services, such services were exempted under Notification No. 10/2002-ST in relation to agriculture.

The Revenue maintained that the applicants were indeed engaged in loading/unloading food grains, thus correctly classified as providers of cargo handling services. However, the Tribunal found that the Show-Cause Notice did not support the demand for service tax as a cargo handling service provider. Moreover, it was noted that cargo handling services related to agriculture were exempted under Notification No. 10/2002-ST.

Ultimately, the Tribunal concluded that even if the applicants were deemed to provide cargo handling services, such services were exempted under the aforementioned Notification. Consequently, the impugned orders were set aside, and the stay petition along with the appeals were allowed in favor of the applicants.