2014 (11) TMI 829 - AT - Service Tax

Cargo handling service - Held that - appellants have undertaken the activity under the work order which is for hiring of tipper for loading of coal from mines to B.G. Siding at Saoner and also hiring of loaders for loading of coal into tippers and thereafter loading of coal to the wagons. The contention of the appellant is that this activity comes under the scope of transportation of goods by road whereas the Revenue held that the activity comes under the scope of cargo handling service. after taking into consideration the activity undertaken in the mines, which is similar to the activity undertaken by the appellant, held that the activity such as hiring of pay loader for mechanical transfer within the mining area comes under the service of taxable service of cargo handling service. Tribunal in the case of Om Shiv Transport (2013 (5) TMI 110 - CESTAT NEW DELHI) after relying upon the decision of the Hon ble Orissa High Court, held that the activity undertaken similar to the activity undertaken by the appellants comes under the cargo handling service and not under transportation of goods - Decided against assessee.

Summary

Issues:
1. Whether the appellant's activity falls under cargo handling service or transport of goods by road service.

Analysis:
The appellant appealed against an order confirming a demand of Rs. 69,89,024 with interest and penalties for providing cargo handling service. The appellant argued that their work order for transporting coal and hiring pay loaders for loading and unloading should be considered transport of goods, not cargo handling. The Revenue cited precedents, including a decision by the Hon'ble Orissa High Court and a Tribunal decision, to support their position that the activity constituted cargo handling service. The Tribunal noted that the appellant's activities involved hiring equipment for loading coal from mines to a siding and loading coal into wagons, which the appellant claimed was transportation of goods. However, the Tribunal referenced Section 65(23) of the Finance Act defining cargo handling service, and previous judgments to conclude that the activity fell under cargo handling service, not transport of goods by road service.

The Hon'ble Orissa High Court, in a similar case, held that activities such as hiring pay loaders for mechanical transfer within mining areas constituted taxable cargo handling service. The High Court upheld the demand by invoking the extended period of limitation. The Tribunal, relying on the Orissa High Court's decision, determined that activities akin to the appellant's fell under cargo handling service, as opposed to transportation of goods. Consequently, the Tribunal found no merit in the appeal and dismissed it.