2006 (1) TMI 3 - AT - Service Tax

Summary

Issues:
- Appeal against Order-in-Appeal confirming demand of service tax for providing Cargo Handling Services.
- Interpretation of the definition of Cargo Handling Services under Section 65(23) of the Finance Act, 1994.
- Applicability of Central Board of Excise and Customs Circular F. No. B/1/2002-TRU on the scope of Cargo Handling Services.

Analysis:
The appeal was filed challenging the Order-in-Appeal confirming the demand of service tax for providing Cargo Handling Services. The definition of Cargo Handling Services under Section 65(23) of the Finance Act, 1994 includes loading, unloading, packing, or unpacking of cargo, but excludes handling of export cargo or passenger baggage or mere transportation of goods. The appellant, a proprietary firm named J.K. Transport, contended that they were not covered under this definition based on a circular issued by the Central Board of Excise and Customs.

The Board Circular F. No. B/1/2002-TRU clarified that individuals undertaking loading or unloading activities in their individual capacity are not liable to service tax as a cargo handling agency. However, in the present case, the appellant, being a proprietary firm, was engaged in loading and unloading Blast furnace granulated slag at a specific site. The Tribunal noted that the appellant, as a firm, cannot be considered an individual undertaking such activities in an individual capacity. Therefore, the reliance on the Board Circular was deemed irrelevant in this context, leading to the dismissal of the appeal.

In conclusion, the Tribunal upheld the demand of service tax for providing Cargo Handling Services by the appellant, emphasizing that the activities carried out by a proprietary firm do not fall within the exemption provided for individuals undertaking loading or unloading activities in their individual capacity as per the Board Circular. The decision highlights the distinction between individual capacity and firm operations in determining the applicability of service tax in the context of cargo handling services.