2017 (8) TMI 903 - AT - Service Tax

Cargo handling services - whether the shifting and loading of railway sleepers within the factory premises of M/s. Rural Engineering Pvt. Ltd., a service provided by the respondent would be chargeable to service tax under the category of cargo handling services ? - Held that - similar issue decided in the case of The Commissioner Central Excise Versus M/s Manoj Kumar and Arvind Kumar 2012 (9) TMI 941 - ALLAHABAD HIGH COURT , where it was held that In common parlance cargo means load, which is to be carried by ship, aeroplane, rail or truck. The handling of transportation of goods, by itself unless it is an organised activity, which is connected with carrying cargo (load) by ship, aeroplane, rail or truck is involved would not fall within the definition of cargo handling service. The definition specifically excludes handling of export cargo or passenger baggage or mere transportation of goods - demand set aside - appeal dismissed - decided against Revenue.

Summary

Issues involved:
1. Whether the shifting and loading of railway sleepers within the factory premises would be chargeable to service tax under the category of 'cargo handling services'?

Detailed analysis:
The appeal was filed by the Revenue against an order passed by the Commissioner of Central Excise, Udaipur, regarding the provision of services related to shifting and loading of railway sleepers. The Revenue alleged that the services rendered fell under the category of 'cargo handling services' and issued a demand notice for recovery of service tax. The respondent appealed the decision, and the Commissioner (A) allowed the appeal. The main contention was whether the activities of shifting and loading within the factory premises would attract service tax under 'cargo handling services'.

The Revenue argued that the services provided by the respondent clearly fell under the definition of 'cargo handling services' as per section 65 of the Finance Act 1994, irrespective of where the activities were carried out. They cited a judgment by the Hon'ble High Court of Rajasthan and a decision by the Larger Bench of the Tribunal in a different case to support their argument.

On the other hand, the respondent's advocate referred to a judgment by the Hon'ble High Court of Allahabad and a recent Tribunal judgment in a similar case to argue that the activities did not constitute 'cargo handling services'. They highlighted that the movement of goods within the factory premises should not attract service tax under this category. They also contended that the demand was barred by limitation due to conflicting views expressed by various Tribunals and High Courts.

The Tribunal analyzed the definition of 'cargo handling service' and the dictionary meaning of 'cargo'. They referred to various definitions of 'cargo' from legal dictionaries and concluded that the activities of shifting and loading within the factory premises did not fall within the definition of 'cargo handling services'. The Tribunal upheld a similar principle laid down in a previous case and dismissed the appeal filed by the Revenue, stating that there was no merit in the Revenue's contentions.

In conclusion, the Tribunal determined that the shifting and loading of railway sleepers within the factory premises did not attract service tax under the category of 'cargo handling services'. The decision was based on the interpretation of the definition of 'cargo handling service' and the specific activities carried out by the respondent within the factory premises.