2013 (6) TMI 489 - AT - Service Tax

Cargo Handling or transportation (GTA) service - Stay - Extended period of limitation - computation of period for issuance of Show cause notice (SCN) - held that - . In any case, demand for the period October 2008 to December 2009 is within the normal period of time. Further, time-bar is both a question of fact and question of law which can be considered only at the time of final disposal of the appeal. As regards, the contention of the appellant that the service rendered is Cargo Handling and not transportation , we do not find any merit in this argument. The work order given by them to the transporters clearly indicates that it is for loading and transportation of clinkers and rate for transportation is far higher than that for loading. In any transportation, loading and unloading is incidental and, therefore, the predominant and essential nature of service is transportation and not Cargo Handling . - Prima facie case against the assessee - directed to make predeposit of 50% of demand.

Summary

Issues:
1. Time-barred demand for service tax.
2. Classification of service under 'Cargo Handling Service' or 'GTA service'.
3. Eligibility for benefit under Notification No. 34/2004-ST.

Analysis:

Time-barred demand for service tax:
The appellant argued that the demand for service tax for the period prior to October 2008 is time-barred as the non-payment was detected during an audit in 2007, but the show cause notice was issued in 2010. The Tribunal noted that the appellant did not inform the department about the contract details, and the information was only provided in 2009 and 2010. The Tribunal held that the demand for the period October 2008 to December 2009 falls within the normal time period. Time-bar is considered both a question of fact and law, to be addressed at the final disposal of the appeal.

Classification of service under 'Cargo Handling Service' or 'GTA service:
The appellant contended that the service provided should be classified as 'Cargo Handling Service' rather than 'GTA service'. The Tribunal examined the work order given by the appellant to transporters, which indicated loading and transportation of clinkers. The Tribunal found that transportation charges were significantly higher than loading charges, indicating transportation as the main activity. Therefore, the Tribunal rejected the appellant's argument and upheld the classification under 'GTA service'.

Eligibility for benefit under Notification No. 34/2004-ST:
The appellant claimed eligibility for the benefit of Notification No. 34/2004-ST, which exempts service tax if transportation charges for a consignment are less than Rs. 750. The Tribunal observed that the notification applies to transporters who discharge service tax liability and transport individual consignments. In this case, the agreement was for transporting a specific quantity of cargo over time, not individual consignments. Consequently, the appellant was deemed ineligible for the notification's benefit.

In conclusion, the Tribunal found that the appellant did not establish a case for complete waiver of the pre-deposit of dues adjudged against them. The Tribunal directed the appellant to make a pre-deposit of 50% of the confirmed service tax demand within six weeks. Upon compliance, the pre-deposit of the remaining amount, including interest and penalties, would be waived, and recovery stayed during the appeal's pendency.