2023 (6) TMI 12 - AT - Service Tax

Levy of Service Tax - Cargo Handling Service - appellant submitted that they did not provide Cargo Handling Service as is ascertainable from the contract with M/s. J.K. White Cement Works, which was enclosed to the synopsis filed during the hearing - HELD THAT - The clarification issued by the Board in the C.B.E.C. Circular No. 104/7/2008-S.T. dated 06.08.2008 mainly addresses the issue in respect of a GTA who also incidentally and by virtue of a single composite contract, undertakes activities like loading/unloading, packing/unpacking, transshipment, temporary warehousing, etc., for which the GTA issues a consignment note - It is thus clarified that transportation is not the essential character of Cargo Handling Service, but only incidental to the same. It also clarifies that where the service provider is registered under GTA and issues consignment note for transportation of goods by road, then the service is to be treated as GTA and not Cargo Handling Service. It is found from the activities of the appellant, as forthcoming from the orders of the lower authorities as well as the Show Cause Notice, as reproduced at paragraph 4.1 of this order, that they clearly fall under the definition of cargo handling service and therefore, there are no fault with the impugned demand. The evasion of tax is blatant, that is to say, the appellant though got itself registered under GTA and promptly collected the service charges as well, but however, it did not bother to remit at least the tax collected and hence, the same cannot be anything short of evasion. Over and above this, it is also a fact borne on record that the appellant did not even file ST-3 returns within the prescribed time. Thus, even this contention of the appellant as to the invoking of extended period of limitation lacks merit. There are no merits in the appeal and consequently, the same is dismissed.

Summary

Issues involved: Alleged provision of Cargo Handling Service without registration, demand for Service Tax, interest, and penalty, interpretation of the definition of "cargo handling service," applicability of CBEC Circular, evasion of tax.

Summary:

Alleged Provision of Cargo Handling Service without Registration:
The appellant was alleged to be providing Cargo Handling Service without registering with the Department, leading to a visit by Officers of Headquarters Preventive Unit. The appellant admitted to loading and unloading goods and raising bills based on agreements with clients.

Demand for Service Tax, Interest, and Penalty:
The Department issued a Show Cause Notice proposing to demand Service Tax for a specific period, along with interest and penalty. The Adjudicating Authority confirmed the demands, which were upheld by the First Appellate Authority, leading to the current appeal.

Interpretation of the Definition of "Cargo Handling Service":
The issue to be decided was whether the demand was sustainable based on the definition of "cargo handling service." The appellant claimed to be registered under Goods Transport Agency (GTA) but had not paid any tax or issued consignment notes as required.

Applicability of CBEC Circular:
The appellant relied on a CBEC Circular addressing activities incidental to GTA services. However, the appellant's failure to pay tax and issue consignment notes raised doubts about the applicability of the circular.

Evasion of Tax:
The appellant argued against the demand, claiming no suppression of facts to evade tax. However, the appellant's failure to remit collected taxes, file returns, and comply with obligations indicated blatant evasion, leading to the dismissal of this contention.

Judicial Pronouncements and Decision:
The appellant's reliance on judicial pronouncements was deemed distinguishable from the current case. Ultimately, the forum found no merit in the appeal and dismissed it, based on the facts presented and the legal arguments made.

Separate Judgment: No separate judgment was delivered by the judges.