2018 (2) TMI 224 - AT - Service Tax

Cargo Handling Service - demand of tax with interest and penalties - Held that - the scope of work mentioned threin relates to transportation of the goods - In view of the fact that the scope of work as per the agreement is only confined to transportation of goods and there is no element of Cargo Handling Service, the activities undertaken by the appellant will not be covered under the scope and ambit of Cargo Handling Service - appeal allowed - decided in favor of appellant.

Summary

Issues:
Service tax demand confirmation for activities related to contracts with M/s National Fertilizer Limited (NFL) and Food Corporation of India (FCI) under Cargo Handling Service.

Analysis:

Issue 1: Service Tax Demand Confirmation
The Appellate Tribunal CESTAT NEW DELHI addressed the issue of confirming a service tax demand of &8377; 1,67,705 along with interest and penalties imposed on the appellant. The demand was based on the contention that the activities carried out under contracts with M/s National Fertilizer Limited (NFL) and Food Corporation of India (FCI) fell within the taxable category of Cargo Handling Service.

Analysis of Issue 1:
Upon reviewing the agreement between M/s NFL and the appellant, the Tribunal noted that the scope of work specified in the agreement primarily pertained to the transportation of goods. The Tribunal highlighted a specific paragraph from the agreement detailing the services to be rendered and the corresponding payment schedule based on distance slabs. Notably, the agreement did not indicate any provision for Cargo Handling Service, emphasizing that the activities were solely related to the transportation of goods.

Judgment:
Considering the explicit scope of work outlined in the agreement, which focused on transportation without any elements of Cargo Handling Service, the Tribunal concluded that the appellant's activities did not fall within the purview of Cargo Handling Service. Consequently, the Tribunal found no merit in the impugned order and ruled in favor of the appellant, setting aside the service tax demand confirmation.

Conclusion:
The Tribunal's meticulous analysis of the agreement's provisions and the absence of Cargo Handling Service elements led to the decision to allow the appeal, ultimately relieving the appellant from the service tax demand and associated penalties.

This comprehensive analysis of the judgment provides a detailed overview of the issues involved, the Tribunal's scrutiny of the relevant agreement, and the ultimate decision reached in favor of the appellant based on the absence of Cargo Handling Service activities in the contractual scope of work.