2009 (7) TMI 197 - AT - Service Tax

Activity carried out by the appellant was transportation and handling of coal for National Coal Fields Ltd. in the mining area - Department asking for payment of service tax under the category of goods transportation agency service. service tax stated as paid by service recipient to be verified - Prima facie, we are convinced that whole case needs through testing on the basis of material facts on record to come to a conclusion in the course of hearing on all aspects such as time-bar, nature of activity, payment of tax by National Coal Fields Ltd., etc. stay granted

Summary

Issues:
1. Whether the appellant's activity of transportation and handling of coal falls under goods transportation agency service or cargo handling service.
2. Whether the demand for service tax is time-barred for the period in question.

Analysis:
1. The appellant argued that their activity of transporting and handling coal for National Coal Fields Ltd. should be classified under goods transportation agency service. The Department issued a show cause notice to National Coal Fields Ltd. for service tax, but the appellant claimed that the tax liability for the relevant period was discharged by National Coal Fields. The Revenue could not issue a show cause notice to the appellant on the same date when they became aware of the facts. The appellant contended that the demand was time-barred as it was partly paid by National Coal Fields under the category of Service GTA. The Tribunal noted that the activity involved a contract between the parties, including transportation and breaking of coal. The Tribunal directed that there should be no pre-deposit during the appeal, pending further examination of the case's various aspects.

2. The Department argued that the appellant's activity fell under cargo handling service, as per the work order examined by the Commissioner. The Department contended that the time-bar aspect was not adequately appreciated by the lower authority. The Tribunal considered the details provided in the work order and the arguments presented, emphasizing the need for a thorough examination of all aspects, including the nature of the activity, tax payments by National Coal Fields Ltd., and the time-bar issue. The Tribunal found that further scrutiny was necessary to reach a conclusion, and therefore, no pre-deposit was required during the appeal process.