2019 (3) TMI 767 - AT - Service Tax

Cargo handling service - extended period Of limitation - demand of service tax - Held that - The appellant were undertaking the certain services. They have not denied that part of the services were cargo handling service. The appellant had not filed ST-3 return nor had they taken service tax registration. In these circumstances, it is apparent that the appellant had suppressed vital information from revenue - It is seen that in the instant case, revenue has clearly pointed out that the appellant had not filed ST-3 Returns and not taking service tax registration and thus, in the instant case, the extended period of limitation has rightly been invoked. Export of consignment or not - Held that - On perusal of the proceeding before lower authority, it is seen that no such claim was made by the appellant. First time this issue has been raised in Tribunal. Even in the appeal before Tribunal, there is no assertion to the effect that they are ready to produce any documents. It is seen that the appellant are not denied that the part of the service provided by them are not related to export - In the instant case, the evidence of having provided service in respect of export is solely available with the appellant, thus the onus of establish, the fact is on the appellant. Since they have not done, so no benefit on this count can be allowed to the appellant. Demand of service tax - income earned from the hire charges of loader - Held that - It is seen that when the loader is provided on per hour basis it would amount to supply of loader on hire, whereas when the charges are made on per metric ton basis, these are the charges for the cargo handling. Consequently, the demand in respect of supply of terex loader and the provision of cargo handling service thereby needs to be revised so as to exclude the demand raised in respect of supply of terex loader on per hour basis treating the same as hiring of terex loader - matter on remand. Appeal allowed in part and part matter on remand.

Summary

Issues:
1. Invocation of extended period of limitation for demand of service tax on cargo handling service.
2. Demand of duty under cargo handling agent service on hire of equipment.
3. Claim of exporting part of the consignment.
4. Service tax demand on income earned from hire charges.

Analysis:
1. The appeal was filed against the confirmation of demand of service tax on cargo handling service by invoking the extended period of limitation. The appellant contended that the extended period was invoked without proper justification in the show cause notice (SCN). The appellant argued that the activity of cargo handling for export purposes should not be taxed as a taxable service. However, the appellant failed to provide evidence to support this claim. The Tribunal found that the appellant had suppressed vital information from the revenue by not filing ST-3 return or obtaining service tax registration. The Tribunal distinguished the case from previous judgments cited by the appellant, stating that the extended period of limitation was rightly invoked due to the appellant's non-compliance over a significant period of time.

2. The issue of demand under cargo handling agent service on hire of equipment was raised. The appellant argued that providing equipment on hire for cargo handling did not constitute cargo handling service. The revenue relied on the description in the contract and ledger account to establish that the activity involved cargo handling. The Tribunal noted that the burden of proof was on the revenue to establish that the services were not related to export. Since the appellant failed to provide evidence supporting their claim, the demand was upheld.

3. The appellant claimed to have exported part of the consignment, but this assertion was not made before the lower authority. The Tribunal emphasized that the burden of proof regarding export-related services lay with the appellant, who failed to produce any supporting documents. As a result, the claim of exporting part of the consignment was not substantiated, and no benefit was granted to the appellant on this ground.

4. Regarding the service tax demand on income earned from hire charges, the appellant presented invoices showing charges for equipment hire based on hours and metric tons. The Tribunal differentiated between charges for equipment hire and cargo handling services, directing a revision of the demand to exclude charges for equipment hire on an hourly basis. The impugned order was set aside, and the matter was remanded to the original adjudicating authority for recalculating the demand and penalties based on the revised terms, resulting in the appeal being allowed by way of remand.