2009 (4) TMI 132 - AT - Service Tax

Cargo Handling Service an agreement for transportation of raw materials from railway siding and MCRD railway siding to M/s. SISCOL s raw material yard and ground hopper of blast furnace and sinter plant held that - prima facie, the appellants cannot be said to have rendered Cargo Handling Service demand confirmed under business auxiliary service category prime facie traverses beyond the show-cause notice total waiver of pre deposit allowed case remanded

Summary

Issues:
1. Waiver of pre-deposit of service tax and penalty under various sections of the Finance Act, 1994.
2. Tax demand on Cargo Handling Service and Business Auxiliary Service.
3. Confirmation of tax demand by the Additional Commissioner of Central Excise.
4. Appeal before the Commissioner (Appeals) and application for waiver of pre-deposit.
5. Interpretation of the agreement between the appellants and M/s. SISCOL.
6. Prima facie case for waiver of pre-deposit.
7. Dismissal of the appeal by the Commissioner (Appeals) based on non-compliance with statutory requirements.

Analysis:
1. The Appellate Tribunal, after waiving the pre-deposit of service tax and penalties, proceeded to hear and decide the appeal concerning the tax demand. The tax demand was based on two counts - one for Cargo Handling Service and the other for Business Auxiliary Service during specific periods.

2. The Additional Commissioner confirmed the tax demand, stating that the appellants entered into an agreement with M/s. SISCOL for handling raw materials, which involved activities beyond mere transportation, leading to the levy of service tax. The Commissioner (Appeals) upheld this decision, directing pre-deposit due to non-compliance by the appellants.

3. Upon perusing the agreement between the parties, the Tribunal found that the appellants were primarily engaged in the transportation of raw materials, indicating they did not render Cargo Handling Service. Regarding Business Auxiliary Service, the Tribunal noted discrepancies in the adjudication order and the show-cause notice, highlighting that the activity did not fall under the service tax category before a specific date.

4. The Tribunal acknowledged a strong prima facie case for total waiver of pre-deposit, as the Commissioner (Appeals) failed to address the merits of the demand and dismissed the appeal solely based on non-compliance with statutory requirements. Consequently, the Tribunal set aside the impugned order and remitted the case to the Commissioner for a fresh decision without insisting on pre-deposit.

5. In conclusion, the appeal was allowed by way of remand, granting the appellants an opportunity to present their defense before the Commissioner and emphasizing the need for a comprehensive review of the case without the pre-deposit condition.