2016 (9) TMI 941 - AT - Service Tax

Classification - whether loading unloading (chute and manually), breaking of boulders and transportation of lead-zinc ore and spillage from different adits and dumps of Zawarmala and Barol Mines to specified site / mill crusher stockpile, transportation of waste rocks from cute of old crusher / Balaria Chute / Mochia chute to Baroj tailing dam would come under the category of transportation of goods as per appellant or under cargo handling services as per Department. Held that - the issue is no more res integra and has been the subject matter of various decisions of the Tribunal. One such reference can be made to the latest decision of the Tribunal in the case of Arjuna Carriers Pvt. Ltd. vs. CST, Raipur 2014 (11) TMI 1048 - CESTAT NEW DELHI wherein it was held that movement of coal from quarries, mine surface etc. to railway sidings, dumps/ stock yards will not be covered by the cargo handling services and the assessee would not be liable to pay any service tax under the said category. Therefore, by following the same, the impugned order is set aside. - Decided in favour of appellant with consequential relief

Summary

Issues:
Interpretation of services for tax liability under reverse charge basis versus cargo handling services classification.

Analysis:
The appeal involved a dispute regarding the classification of services provided under an agreement with M/s. Hindustan Zinc Ltd. for loading, unloading, breaking of boulders, transportation of lead-zinc ore, and spillage from mines to specified sites. The recipient discharged service tax liability on a reverse charge basis, considering the services as transportation of goods. However, the Revenue contended that the services fell under the category of cargo handling services, leading to a demand of duty amounting to ?50,68,368 for the period July 2004 to March 2007. The appellant contested this during adjudication, but the Commissioner upheld the demand and penalties without allowing the benefit of limitation.

The Tribunal noted that the issue had been addressed in previous decisions and referred to a specific case, Arjuna Carriers Pvt. Ltd. vs. CST, Raipur, where it was held that the movement of coal from quarries to railway sidings did not constitute cargo handling services for service tax liability. Relying on this precedent and considering the nature of the services provided, the Tribunal set aside the impugned order and allowed the appeal with consequential relief to the appellant. The decision was based on the merits of the case, and the Tribunal did not delve into the appellant's plea of limitation during the proceedings.

In conclusion, the Tribunal's decision in alignment with the precedent established in the Arjuna Carriers Pvt. Ltd. case clarified the classification of services in question, leading to the allowance of the appeal and relief for the appellant. The judgment emphasized the importance of correctly categorizing services for tax liability determination, highlighting the significance of precedents in resolving such disputes effectively.