2013 (11) TMI 554 - AT - Service Tax

Demand of service tax - Cargo Handling Services - Held that - There are no findings of the lower authorities as to whether loading of the bags of soda ash was done out-side the factory premises or otherwise. The definition of Cargo Handling Service was being interpreted by their Lordships in the case of Modi Construction Company (2011 (4) TMI 598 - JHARKHAND HIGH COURT) wherein the Hon ble High Court has held that if an activity of packing, loading and unloading is done within the factory premises, the said service would be out of the purview of Cargo Handling Service. Appellant has made out a prima-facie case for the waiver of the confirmed demands - Decided in favour of assessee.

Summary

Issues:
- Whether the appellant is liable for Service Tax on Cargo Handling Services within factory premises.
- Interpretation of Cargo Handling Service under the Finance Act, 1994.
- Applicability of previous judgments on similar issues.

Analysis:
1. The appellant filed a stay petition seeking the waiver of pre-deposit of Rs.6,13,095/- confirmed as Service Tax liability, interest, and penalties under the Finance Act, 1994. The demand arose from the appellant's engagement in Cargo Handling Services for a specific company within factory premises.

2. The counsel for the appellant argued that the appellant was hired to collect spillage of finished goods within the factory premises, and activities like loading bags onto railway wagons were denied. The lower authorities concluded against the appellant based on these activities, but the counsel contended that any activity within factory premises should not qualify as taxable Cargo Handling Service.

3. The Departmental representative countered, stating that the appellant indeed performed Cargo Handling Services, including loading, unloading, packing, and loading goods onto railway wagons within the factory premises. However, there were no findings on whether loading activities were conducted outside the factory premises.

4. The Tribunal noted the lack of findings on the location of loading activities and referred to a judgment by the Hon'ble High Court regarding activities within factory premises and the interpretation of Cargo Handling Service. Relying on a previous stay order and the judgment of the High Court of Jharkhand, the Tribunal found in favor of the appellant.

5. The Tribunal concluded that the appellant established a prima facie case for the waiver of confirmed demands based on the High Court's judgment favoring the assessee. Consequently, the application for the waiver of pre-deposit amounts was allowed, and recovery was stayed pending the appeal's disposal.