2019 (7) TMI 826 - AT - Service Tax

GTA Services - abatement claim - reverse charge mechanism - Department has entertained a view that the appellant have been providing a cargo handling service and mining service to the service recipient namely M/s SECL and, therefore, they are not entitled for the abatement - HELD THAT - From the work orders that primary nature of the work is loading and transportation of the coal from mining area to railway siding. From the plain reading of the work orders, we infer that the primary nature of the activity undertaken by the appellant for M/s SECL is for the transportation of the coal from the pit heads to the railway siding or within the mining area itself with related ancillary activity of loading and unloading of coal into dippers. The work relating to the loading and unloading is ancillary to the transportation work which has also been clarified by the CBEC vide its Circular dated 6 August 2008 wherein it has been mentioned that the composite service may include various intermediate and ancillary service provided in relation to the principle service of the road transport of goods. Such intermediate and ancillary service may include loading/ unloading, packing/unpacking, trans-shipment or temporary warehousing etc. - These services are not provided as independent activities but are for the purpose of successful completion of the service of transportation of goods by road and, therefore, same is to be classifiable under GTA service. The primary activity of the appellant provided in the above-mentioned work orders is that of Transportation of Goods by Road and not of the cargo handling or of mining service either - for period upto 30 June 2012 the services provided by the appellant does not fall either under the category of cargo handling services or under the mining service and same has properly been classified under the Transport of Goods by Road service and on which M/s South Eastern Coal Fields Limited have already deposited the proper service tax under reverse charge mechanism. Demand post negative era that is 1 July 2012 to March 2013 - HELD THAT - The matter is also no longer res-integra and it has already been decided in number of decisions of this Tribunal that the activity as undertaken by the appellant is classifiable under transportation of goods service and shall be entitled for abatement of value as provided in the relevant notification - reliance placed in the case M/S H.N. COAL TRANSPORT PVT. LTD., M/S V.N. TRANSPORT PVT. LTD. VERSUS CCE ST, RAIPUR 2018 (8) TMI 173 - CESTAT NEW DELHI . The activity undertaken by the appellant has rightly been classified under the category of Transport of Goods by Road service and the appropriate service tax has already been paid by M/s SECL under the reverse charge mechanism basis - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Classification of services provided by the appellant.
2. Validity of service tax demand under different service categories.
3. Applicability of abatement under the Goods Transport Agency (GTA) service.
4. Legality of orders-in-original and orders-in-appeal.

Issue-wise Detailed Analysis:

1. Classification of Services Provided by the Appellant:
The appellant is engaged in the transportation of coal within mining areas, including loading and unloading activities. The department contended that these services should be classified as "cargo handling service" and "mining service," thus not eligible for abatement under the GTA service. However, the appellant argued that their services fall under the "Transport of Goods by Road Service," supported by certificates from SECL confirming service tax payment under the reverse charge mechanism.

2. Validity of Service Tax Demand Under Different Service Categories:
Two show cause notices were issued to the appellant, one invoking the extended time proviso under Section 73(1) of the Finance Act, 1994, and the other covering the normal period from April 2012 to March 2013. The adjudicating authority confirmed the service tax demand under "cargo handling service" for the period from 01/04/2007 to 30/05/2007 and under "mining service" for the period from 01/06/2007 to March 2013. The appellant contended that the adjudicating authority and Commissioner (Appeals) had traveled beyond the show cause notice by confirming the demand under "mining service," which was not initially cited.

3. Applicability of Abatement Under the Goods Transport Agency (GTA) Service:
The appellant argued that their services should be classified under the GTA service, entitling them to abatement from the total amount received. The Tribunal referred to several case laws, including the Hon'ble Supreme Court's decision in Commissioner of Central Excise and Service Tax, Raipur vs. Singh Transporters, which held that transportation of coal within mining areas is classifiable under "transport of goods by road service" and not under "mining service."

4. Legality of Orders-in-Original and Orders-in-Appeal:
The Tribunal examined the work orders and concluded that the primary activity of the appellant was the transportation of coal, with loading and unloading being ancillary services. The CBEC Circular dated 6 August 2008 clarified that such composite services should be classified under GTA service. The Tribunal found that both the orders-in-original and orders-in-appeal were legally unsustainable as they misclassified the services provided by the appellant.

Conclusion:
The Tribunal held that the appellant's services are correctly classifiable under the "Transport of Goods by Road Service," for which SECL had already paid the appropriate service tax under the reverse charge mechanism. Consequently, the impugned order-in-appeal was set aside, and the appeal was allowed. The operative part of the order was pronounced in open court.