2019 (7) TMI 1704 - AT - Service Tax

Levy of Service Tax - Cargo Handling Services - assessee has rendered the services in the nature of excavation and extraction of ores providing machines incl. tippers on rent site formation and demolition services and transportation of rejects for removal thereof - HELD THAT - The services provided by the assessee were not taxable during the period in dispute inasmuch as the said services have been brought within the purview of taxation under the category of Supply of Tangible Goods service w.e.f. 16-5-2008 Site Formation Clearance Services w.e.f. 16-6-2005 etc. The services provided by assessee for removal of rejects after excavation cannot be said to be loading/unloading of cargo so as to classify them in Cargo Handling Services. The Ld. Commissioner has rightly held that the demand proposed in the SCN under the head Cargo Handling Services is legally not sustainable - Appeal dismissed - decided against Revenue.

Summary

Issues:
Classification of services under "Cargo Handling Services" for the period 2002 to 2008.

Analysis:
The appeal was filed by the Revenue against the Order-in-Original passed by the Commissioner, Service Tax, Kolkata, dropping the service tax demand proposed in Show Cause Notices issued to the respondent assessee for services provided under the category of "Cargo Handling Services." The respondent also filed a Cross Objection in the departmental appeal.

The facts of the case involved services such as excavation, extraction of ores, renting machines including tippers, site formation, demolition services, and transportation of rejects. The Service Tax demand was based on classifying these services under "Cargo Handling Services." However, the Commissioner, considering a clarification issued by C.B.E. & C., found that the services provided by the assessee did not fall under Cargo Handling Services. The Commissioner detailed various activities undertaken by the assessee, concluding that they did not fit the classification of Cargo Handling Services.

During the hearing, the Revenue argued that the removal of materials after excavation should be taxed under Cargo Handling services. In contrast, the consultant for the assessee contended that the services were correctly not classified as Cargo Handling Services since they were later brought under different taxable categories. The Tribunal agreed with the consultant, stating that the services provided by the assessee were not taxable under Cargo Handling Services during the disputed period. The Tribunal upheld the Commissioner's decision, finding the demand under Cargo Handling Services legally unsustainable.

Conclusively, the Tribunal rejected the Revenue's appeal, stating it lacked merit. The Cross Objection filed by the respondent assessee was also disposed of accordingly.