2013 (6) TMI 109 - AT - Service Tax

Cargo handling service - service tax demand along with interest and penalties - Department felt that activity of handling coal prior to 01.06.2007 was covered under cargo handling service - assessee is contesting the levy of service tax under Cargo Handling Services as Coal in this case is not cargo - Held that - As decided in Gangadhar Bulk Movers Pvt. Ltd. case 2011 (11) TMI 358 - CESTAT, MUMBAI loading of coal is done on tippers by hiring pay-loaders and the tippers transport the coal from one place within the mining area to another place and unload it there. As regard the contention of the Appellants that no manual labour is involved in loading and unloading is not factually correct and is contrary to terms and conditions of work order. Moreover, the definition of cargo handling service place no restriction on loading or unloading by manual or mechanical method. It is pertinent that loading and unloading are not incidental to transportation in this case, since for transportation, there is a separate work order, which is not the subject matter of this case. It is also pertinent that once the activity carried out, is found to be loading and unloading of cargo, such activity is clearly covered under the category of cargo handling service. The cargo is not only goods transported by a vessel or by aircraft, but also goods transported by motor vehicle, and undoubtedly, the tipper is motor vehicle. Thus once activity carried out is found to be loading or unloading of cargo such activities is covered by category of cargo handling service - Revenue s appeal is allowed.

Summary

Issues:
Whether the activities of the respondent fall under the category of Cargo Handling Service as defined under Section 65(23) of the Act.

Analysis:

Issue 1: Activities falling under Cargo Handling Service
The appeal involved a dispute regarding whether the respondent's activities qualified as Cargo Handling Service under the law. The respondent, engaged in loading/unloading/handling coal, contested the levy of service tax under Cargo Handling Services, arguing that coal is not cargo. The Tribunal analyzed the definition of Cargo Handling Service under Section 65(23) of the Act, which includes loading, unloading, packing, or unpacking of cargo. The Tribunal referred to the Orissa High Court's judgment in the case of Coal Carriers, highlighting that goods become cargo only after being loaded into the mode of transport. The court differentiated between goods and cargo, emphasizing that cargo handling activities are related to the transportation of goods. The Tribunal also cited the decision in the case of Gangadhar Bulk Movers Pvt. Ltd., which affirmed that loading/unloading of cargo, even if done mechanically, falls under Cargo Handling Service.

Conclusion:
The Tribunal concluded that the respondent's activities, involving the loading/unloading/handling of coal, indeed fell under the category of Cargo Handling Service as defined by the law. Relying on legal precedents and the definition of cargo, the Tribunal set aside the Order in Appeal and reinstated the Order in Original, thereby allowing the Revenue's appeal.