2014 (6) TMI 205 - AT - Service Tax

Cargo Handling service - Support Service of Business or Commerce - whether all the activities undertaken by the appellant for M/s. RINL would come within the purview of Cargo Handling Service or only a part of the activity would be covered within the definition of Cargo Handling Service - Held that - demand of ₹ 1.05 crore (approx) under the category of cargo handling services, the contract entered into by the appellant with M/s. RINL is for handling and internal transportation of stores materials within the Visakhapatnam Steel Plant site. The scope of the work included handling and internal transportation of stores materials such as plant, machinery, equipments, etc. at the plant site including crushing of coke breeze meant for Visakhapatnam Steel Plant, job contract for miscellaneous works awarded from time to time, supply of LCVs and packing of materials for transportation. Thus, a number of services are required to be provided by the appellant. While handling of stores materials along with internal transportation might merit classification under cargo handling service. We have also pursued some of the invoices raised by the appellant on the service recipient which describes the activities as transportation and the payment is made to the appellant based on the quality of goods transported. Similarly, the appellant has provided labour for undertaking miscellaneous jobs and payment has been made to the appellant based on number of man-days involved. This service also would not come under the category of cargo handling service. Therefore, clubbing all the activities undertaken by the appellant under Cargo Handling Service and levying service tax under the said category cannot be sustained in law. The adjudicating authority has to examine the individual activities carried out by the appellant and then classify the same, considering the definitions provided in the law, which has not been done - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Service tax demands under 'Cargo Handling' service and 'Support Service of Business or Commerce'.
3. Classification of services provided by the appellant to M/s. VCTPL and M/s. RINL.
4. Interpretation of the definitions of 'Business Support Service' and 'Cargo Handling Service'.
5. Legal sustainability of the service tax demands.

Condonation of Delay:
The delay of 103 days in filing the appeal was condoned due to the severe illness of the employee responsible for service tax matters, supported by a medical certificate. The condonation was granted as a satisfactory cause was shown for the delay.

Service Tax Demands - Cargo Handling and Business Support Service:
The appellant contested service tax demands totaling over Rs. 1 crore under 'Cargo Handling' and 'Support Service of Business or Commerce'. The appellant argued that the services provided did not fall under the defined categories, citing specific contractual obligations and legal precedents. The Revenue department, however, maintained that the services rendered by the appellant aligned with the definitions of the respective categories, urging for upholding the demands.

Classification of Services Provided:
The appellant provided internal transportation services to M/s. VCTPL and handling services to M/s. RINL. The nature of services, contractual obligations, and scope of work were analyzed to determine the appropriate classification under the relevant service categories.

Interpretation of Legal Definitions:
The Tribunal delved into the legal definitions of 'Business Support Service' and 'Cargo Handling Service' as per the Finance Act, 1994. Detailed analysis of the services rendered by the appellant was conducted to ascertain their alignment with the statutory definitions and precedents.

Legal Sustainability of Service Tax Demands:
After thorough consideration of submissions, the Tribunal found that the demand under 'Business Support Service' was unsustainable in law due to the nature of services provided. For the demand under 'Cargo Handling Service', a remand was ordered to reevaluate the activities undertaken by the appellant and their classification within the statutory framework. The Tribunal directed the appellant to provide documentary evidence to support their claims.

In conclusion, the appeal was partly allowed, setting aside the demand under 'Business Support Service' and remanding the case for fresh consideration regarding the demand under 'Cargo Handling Service'. The stay application was also disposed of accordingly.