2013 (12) TMI 738 - AT - Service Tax

Demand of service tax - Cargo Handling service - Segregation of service into Cargo Handling Services and Transportation Services - Benefit of abatement on the GTA services - Held that - there is an evidence which indicate that appellant had charged separately for the loading of timber logs within the port area on to the Trailor or specially designed vehicles and discharged the service tax liability and also discharged the service tax liability on transportation by road on the amount received from the importers. We also note from the invoices issued by the appellant that for transportation of logs from port area to importer s premises, appellant is indicating the amount separately as transportation charges, on which after receiving payment, appellant discharged the service tax liability under reverse charge mechanism. Appellant has also made out a case for waiver of pre-deposit on the ground of limitation, as the show cause notice dated 02.11.2010 was issued by the department indicating the same services for the same period under GTA services hence, invoking extended period again the show cause notice dated 15.11.2012 - Following decision of R.K. Transport Company vs. CCE, Raipur 2012 (3) TMI 271 - CESTAT, NEW DELHI - Stay granted.

Summary

Issues:
Waiver of pre-deposit of service tax, interest, and penalty under Section 78 of Finance Act, 1994 based on the classification of services as Cargo Handling Services and Transportation Services.

Analysis:
The appellant filed a stay application seeking the waiver of pre-deposit of an amount confirmed as service tax, interest, and penalty. The demand was confirmed due to the alleged short payment of service tax on services provided. The Revenue contended that the appellant segregated services into Cargo Handling and Transportation Services, availing abatement on the latter. The appellant argued that the Revenue previously computed service tax for the same services differently. The appellant claimed that the second show cause notice was time-barred and highlighted the billing practices and tax discharge on transportation and loading activities. Reference was made to consignment notes and invoices to support the separate billing and tax discharge. Legal precedents were cited to support the appellant's position on the classification of services.

The departmental representative countered by stating that the appellant failed to provide evidence of transportation and consignment notes in response to the earlier notice. The representative questioned the validity of consignment notes and argued that loading and unloading were the primary services provided, justifying classification under Cargo Handling Services. The adjudicating authority rejected the evidence due to alleged discrepancies and statements from the appellant's accounts executive.

Upon considering the arguments, it was noted that the appellant billed separately for loading and transportation, discharging service tax accordingly. The Tribunal's decision in a similar case favored the appellant. The issue of limitation was raised concerning the two show cause notices for the same services. The Tribunal found the appellant's case prima facie acceptable on both limitation and merits, granting the waiver of pre-deposit and staying the recovery until the appeal's disposal.

In conclusion, the Tribunal allowed the application for the waiver of pre-deposit based on the appellant's arguments regarding limitation and merit, emphasizing the separate billing and tax discharge practices observed by the appellant.