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2020 (1) TMI 534 - AT - Service TaxClassification of services - Cargo Handling Services or not - Appellant provided transportation of Coal including incidental loading/unloading to various sites of ECL - loading of Coal into Tippers for transportation within the mines and further provided loading of coal into Railway Wagon for outward transportation - time limitation - HELD THAT - The Service Tax demand of ₹ 2,47,60,534/- on contracts for transportation of Coal from CHP Stock Yard to Railway Siding upto 06-07 K.M. and loading the Coal into Railway Wagon are essentially for transportation of Coal which is evident from the intention of the parties as found from the Work Orders. The work orders are awarded for transportation of coal - the Service Tax demand of ₹ 2,47,60,534/- on activities of transportation with incidental loading and unloading including wagon loading is principally and dominantly for transportation of coal within the mines and hence, cannot be taxed under the category of Cargo Handling Service - demand set aside. Service tax demand of ₹ 27,99,603/- on loading activities - HELD THAT - The activities of hiring of pay loaders for loading of coal at pit head within the mines for internal transportation cannot be classified under the category of Cargo Handling Service - demand set aside. The Service Tax demand on the activity of hiring of pay loader for loading of coal into railway wagon at railway siding for outward transportation is taxable under the category of Cargo Handling Service - in respect of work orders for hiring of pay loaders for loading of coal at railway siding for outward transportation, the tax demand on merit is upheld but such levy to the normal time limit is restricted and the penalties set aside. Appeal allowed in part.
Issues:
1. Classification of services provided by the Appellant under the category of Cargo Handling Service for the purpose of Service Tax. 2. Determination of the period of limitation for the Service Tax demand. Issue 1: Classification of Services under Cargo Handling Service: The Appellant provided transportation services for coal, including loading/unloading, to various sites of ECL. The dispute arose regarding the classification of these services under the category of Cargo Handling Service for Service Tax purposes. The Ld. Commissioner upheld a Service Tax demand of ?2,47,60,534 on transportation with incidental loading/unloading, citing that the contracts were not merely for transportation but also included loading/unloading activities. The Appellant argued that the dominant activity was transportation, supported by previous tribunal decisions. The tribunal agreed, setting aside the Service Tax demand on transportation activities, as they were primarily for coal transportation within mines. However, a separate demand of ?27,99,603 on loading activities was partially upheld, with loading within mines set aside but loading at railway siding for outward transportation upheld under Cargo Handling Service category. Issue 2: Determination of Period of Limitation: Regarding the period of limitation for the Service Tax demand, the Appellant contended that the demand for the period from 16-08-2002 to 31-03-2006 was time-barred, citing genuine interpretation dilemmas during the infancy stage of the levy. The tribunal acknowledged the interpretation issues but accepted the demand for the period from 01-04-2006 to 31-03-2007, within the normal limitation period. Penalties were waived considering the circumstances. The Ld. Commissioner's decision on limitation was upheld, with the demand confined to the applicable time limit, and penalties set aside. In conclusion, the Appellate Tribunal partially allowed the appeal by setting aside the Service Tax demand on transportation activities primarily meant for coal transportation within mines, while upholding the demand on loading activities at railway siding for outward transportation under the Cargo Handling Service category. The limitation period for the Service Tax demand was determined, with penalties waived due to genuine interpretation dilemmas during the initial stages of levy.
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