2009 (2) TMI 145 - AT - Service Tax

Cargo - the term Cargo has not been defined under the law - mere transportation will not amount to cargo handling unless loading unloading packing or unpacking of cargo and handling of such cargo is the primary object of the contract between the parties demand is not sustainable.

Summary

Issues:
Interpretation of term "Cargo" under law for the purpose of determining cargo-handling service.

Analysis:
The judgment by the Appellate Tribunal CESTAT, New Delhi involved the interpretation of the term "Cargo" under the law to ascertain whether mere transportation of goods for recovery and processing within a plant constituted cargo-handling service. The first issue raised was whether the first appellate order correctly deemed the adjudication order unsustainable based on the definition of "Cargo." The Ld. DR argued that the term "Cargo" not being defined under the law meant that transportation of goods for recovery and processing within the plant did not qualify as cargo-handling service. On the other hand, Shri Abhishek Jaju, representing the respondent, contended that the order by the appellate authority was legally sound, citing a previous judgment by the Tribunal for support.

Upon hearing both sides and examining the records, the Tribunal analyzed the nature of the activity described by the Adjudicating Authority. It was noted that the respondent was charging material handling fees from customers, potentially falling under the category of "Cargo handling service." The Tribunal reviewed the discussions made by the Adjudicating Authority and concluded that the primary work involved loading and unloading, which did not align with the definition of cargo handling service. The Tribunal emphasized that for an activity to qualify as cargo handling, it must involve loading, unloading, packing, or unpacking of cargo as the primary objective of the contract between parties. The Tribunal found no specific findings in the adjudication order against the respondent, leading to the dismissal of the revenue's appeal.

The Tribunal acknowledged that the Commissioner (Appeals) had thoroughly examined the issue, as evident from the order, and had made a decision in line with the precedent set by the Tribunal in a previous case. Consequently, the Tribunal found no legal flaws in the Commissioner's order and upheld the decision to dismiss the revenue's appeal.