2019 (1) TMI 1168 - AT - Service Tax

Classification of service - Cargo Handling Service or Business Auxiliary services? - activity of loading and unloading of transportation of ore within the mining area - Held that - The activity that was conducted by the appellant was loading of different types of finished crushed products from the place of crushing located in the crushing unit and shifting/ transportation of the finished crushed product up to a maximum distance of 500 meters from the crushing plant to the designated place within the mining area - there is no hesitation in accepting the contention of the learned counsel for the appellant that the transportation of the ores located at different locations within the mining area would not fall within the definition of Cargo Handling services . Demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confirmation of demand of service tax on 'cargo handling services' and imposition of penalty.
2. Classification of appellant's activity under 'Business Auxiliary Service' and 'Cargo handling services'.
3. Interpretation of 'Cargo handling services' definition in relation to transportation of ores within the mining area.

Analysis:
1. The appeal challenged an order confirming the demand of service tax on 'cargo handling services' and imposition of penalty by the Commissioner for the period of April 2008 to March 2012.
2. The Appellant was registered for providing various services including Business Auxiliary Service, Tangible Goods Service, and Goods Transport Agency services. A show cause notice alleged non-payment of service tax under 'Business Auxiliary Service' and 'Cargo handling services', accusing the Appellant of willfully suppressing facts to evade tax.
3. The Commissioner accepted that the activity did not fall under 'Business Auxiliary Service' but held it to be 'Cargo handling services' based on loading ores into trucks within the mining area.
4. The Appellant argued that transportation of ores within the mining area should not be classified as 'Cargo handling services', citing precedents like Commissioner of Central Excise vs. M/s. Manoj Kumar and Arvind Kumar, and decisions from Jharkhand High Court and Tribunal at New Delhi.
5. Work orders revealed activities of loading and transportation of ores within the mining area, leading the Tribunal to conclude that such activities did not constitute 'Cargo handling services'.
6. The Tribunal rejected the department's reliance on a previous case, Gangadhar Bulk Movers Pvt. Ltd. vs. CCE, Nagpur, emphasizing the distinction between separate and composite work orders.
7. Consequently, the impugned order confirming the demand and penalty was set aside, and the appeal was allowed based on the interpretation that transportation of ores within the mining area did not fall under 'Cargo handling services'.

This detailed analysis of the judgment highlights the key issues, arguments, legal interpretations, and the final decision reached by the Appellate Tribunal CESTAT NEW DELHI.