2019 (8) TMI 1687 - AT - Service Tax

Classification of services - Goods Transport Agency Service or cargo handling services - activity of transportation of coal from pitheads/coal face to railway siding - first SCN for period March, 2008 to January, 2012 - second SCN for the period February, 2012 to March, 2013 - third SCN for the period April, 2013 to March, 2014 - HELD THAT - The activity of movement of coal within the mining area from pitheads to railway siding from trucks/motor vehicles is taxable under the Goods Transport Agency services as was observed by the Supreme Court in COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR VERSUS SINGH TRANSPORTERS 2017 (7) TMI 494 - SUPREME COURT . Period 1 July, 2012 onwards - HELD THAT - Even for the period 1 July, 2012 onwards the activity undertaken by the appellant would be taxable under the Transportation of Goods service in view of the decision of this Tribunal in M/s H.N. Coal Transport Private Limited versus Commissioner of Central Excise and Service Tax, Raipur 2018 (8) TMI 173 - CESTAT NEW DELHI where it was held that for the period w.e.f. 01/07/2012, the activity of transportation of coal from the coal face to the railway siding will continue to enjoy the benefit available to goods transport agency and cannot be bundled into a single service under Section 66F alongwith lifting of coal at the coal face into the activity of mining. The impugned order passed by the Commissioner classifying the said service as Cargo Handling service cannot be sustained and is set aside - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of services under "Cargo Handling Services" vs. "Goods Transport Agency Service" for the transportation of coal within mining areas.

Analysis:
The judgment involves an appeal against an order confirming service tax demand, penalty, and interest imposed by the Commissioner. The appellant, registered for "Mining Services" and "Cargo Handling Services," was engaged in loading and transporting coal within mining areas under separate agreements. The Department alleged the transportation of coal from pitheads/coal face to railway siding was taxable under "Cargo Handling Services," while the appellant discharged tax liability under "Goods Transport Agency Service."

The Show Cause Notices covered different periods from 2008 to 2014. The Order-in-Original confirmed the demand under "Cargo Handling Services" for the entire disputed period. The appellant argued for classification under "Goods Transport Agency Services" based on separate agreements for loading and transportation activities. The appellant cited relevant case laws supporting their classification.

The Tribunal held that the transportation of coal within mining areas is taxable under "Goods Transport Agency Services," as per Supreme Court and Tribunal decisions. The Tribunal emphasized the independence of the loading and transportation activities, rejecting the bundling of services. The Tribunal also noted the continuation of abatements for goods transport agencies post-July 2012 and upheld the benefit for transportation of coal.

Ultimately, the Tribunal set aside the Commissioner's order classifying the service as "Cargo Handling" and allowed all three appeals, concluding that the transportation of coal should be classified under "Goods Transport Agency Service." The judgment provides a detailed analysis of the service classification issue based on legal precedents and contractual terms, leading to the allowance of the appeals.