2019 (3) TMI 1048 - AT - Service Tax

Classification of services - cargo handling services or not - various activities involving Coal unloading, Coal feeding and cleaning job of coal handling plant etc - Held that - The appellant with the help of man power carrying out various activity - From the said activities, it can be seen that the majority of activities are not classifiable as a cargo handling service. A very small part of the service unloading of coal from truck forever since pre-dominantly all the activities are out of the purview of cargo handling service, i.e. the unloading is incidental to those service. Therefore, the service is not classifiable as cargo handling service. On the identical activity in the case of Pati Ram Sharma 2017 (3) TMI 656 - CESTAT NEW DELHI , the Tribunal held that the unloading portion is incidental to the other activities such as staking of coal, watering, etc. hence the same is not classifiable as cargo handling service. Appeal allowed - decided in favor of appellant.

Summary

Issues: Whether the appellant is liable for service tax for various activities in the factory of the manufacturer, specifically related to coal handling and ash handling services.

Analysis:
1. The issue in this case pertains to the classification of services provided by the appellant in a factory, including coal unloading, feeding, cleaning, and ash handling. The question is whether these activities fall under the category of cargo handling service and are thus liable for service tax.

2. The appellant's advocate argued that the activities are not classifiable as cargo handling service as per the Finance Act, 1994. She contended that even though coal unloading is involved, it is incidental to other activities like staking of coal and watering, which do not fall under cargo handling. The advocate cited various judgments to support this argument, emphasizing that the demand raised based on cargo handling classification is incorrect.

3. On the other hand, the Revenue representative reiterated that the unloading of coal from trucks and tippers by the appellant constitutes cargo handling service, justifying the demand raised. However, the appellant's activities involve a range of tasks beyond mere unloading, as highlighted during the proceedings.

4. The Tribunal, after considering the submissions from both parties, observed that the majority of activities carried out by the appellant do not fall under cargo handling service. While coal unloading is a part of the services provided, it is deemed incidental to the broader scope of activities such as staking coal and watering. Citing a previous Tribunal decision, the judgment concluded that the unloading aspect is ancillary to other primary activities and hence does not classify the service as cargo handling. Consequently, the impugned order was set aside, and the appeal was allowed.

This detailed analysis of the judgment showcases the legal interpretation and application of relevant laws and precedents in determining the tax liability of the appellant for the services provided in the factory.