2011 (2) TMI 1132 - AT - Service Tax

Cargo handling service - demand of service tax - Held that - In the present case, as the Applicant was undertaking loading and unloading of paper bundles and reels into wagons and lorries, therefore, prima facie, it is not a fit case for total waiver of predeposit of the Service Tax - Decided in favor of the assessee by way of direction to deposit Rs. 4 Lakh.

Summary

Issues:
Demand of Service Tax and penalty on the ground of providing cargo handling service.

Analysis:
In this case, a show cause notice was issued to the Applicant for the demand of Service Tax and imposition of penalty based on the allegation that the Applicant was providing cargo handling service. The Work Order detailed various tasks such as receipt, sorting, shifting of reels, packing, marking, stacking, loading, unloading of paper bundles and reels, and brick stacking. The Applicant received amounts for the services provided as per the Work Order. During investigation, a statement of the service provider was recorded, confirming that the work undertaken was limited to the Work Order.

The definition of Cargo Handling Service under clause (23) of Section 65 of the Finance Act, 1994 includes loading, unloading, packing, or unpacking of cargo, but excludes handling of export cargo, passenger baggage, or mere transportation of goods. As the Applicant was involved in loading and unloading paper bundles and reels into wagons and lorries, it was determined that total waiver of predeposit of the Service Tax was not justified. Consequently, the Applicant was directed to deposit Rs. 4.00 lakh within three weeks from the date of the Order. Upon compliance with this directive, the predeposit of the remaining Service Tax amount was waived, and recovery of the same was stayed during the pendency of the Appeal.