2013 (8) TMI 115 - AT - Service Tax

Service tax on service of cargo handling - Assessee received payments as sugar loading contractors in respect of loading, unloading and shifting of sugar bags from the floor of the mill house to the godown; and from one godown to another as desired by the employer; and for movement/handling of the goods - Assertion of the assessee that he was just a labourer who was given the responsibility of overall supervision, movement and loading/unloading of the material and in no way performed services as a contractor or a provider of the cargo handling service nor a cargo handling agency. The assessee contended before the appellate authority that the payments received were distributed among fellow labourers, who did the same job Held that - Activity of the assessee did not constitute cargo handling service, since there was no loading or unloading from any vehicle or vessel involved Decided against the Revenue.

Summary

Issues:
1. Appeal against order passed by Commissioner (Appeals)
2. Allegation of failure to remit service tax for cargo handling services
3. Interpretation of whether the services provided constitute cargo handling service
4. Lack of evidence to support the allegation of cargo handling service

Analysis:
1. The appeal was filed by the Revenue against the order passed by the Commissioner (Appeals) reversing the adjudication order. The dispute arose from the allegation that the respondent/assessee failed to remit service tax for providing cargo handling services during a specific period. The initial adjudication order was passed ex parte as the assessee did not respond to the Show Cause Notice or appear for the personal hearing.

2. The Show Cause Notice accused the assessee of receiving payments for handling sugar bags without loading them onto any vehicle for transportation. The adjudicating authority determined that the services provided constituted cargo handling service as defined in the relevant sections of the Finance Act, 1994, and imposed a service tax demand along with penalties. However, the appellate authority accepted the assessee's assertion that they were merely laborers supervising the movement of materials and distributing payments among fellow laborers, concluding that the activity did not amount to cargo handling service.

3. The appellate order was based on the lack of evidence supporting the claim that the assessee provided cargo handling services. Despite Revenue's insistence on the nature of the services, there was no material on record to prove that the assessee handled cargo, especially involving loading or unloading from a vehicle or vessel. The Tribunal found the appellate order to be flawless and declined to interfere, ultimately dismissing the appeal without costs.

In conclusion, the judgment upheld the appellate authority's decision, emphasizing the importance of substantial evidence to support allegations of service tax liability, particularly in cases involving the interpretation of specific services such as cargo handling.