2009 (5) TMI 235 - AT - Service Tax

Demand limitation - Appellant submits that transporting loading and unloading from Mines to grinding units are not taxable. Appellant is paying service tax under the category Business Auxiliary service from 10-9-04. prima facie appellant is not governed by Business Auxiliary Service category appellant filed returns to discharge their statutory obligation, but Department kept quiet about the activities of the appellant - mere filing of the return may not take away the appellant from the purview of scrutiny, if anything is found contrary to the law after filing of the return. - Looking into the time bar aspect, without expression of any opinion on merits, we direct waiver of pre-deposit

Summary

Issues:
1. Taxability of transporting loading and unloading of Rock Phosphate chips.
2. Applicability of Business Auxiliary Service category.
3. Time limitation for issuing show cause notice.
4. Classification of appellant under Cargo Handling service.
5. Benefit of decision in previous cases.

Analysis:

1. The appellant argued that the activity of transporting loading and unloading of Rock Phosphate chips from Mines to grinding units is not taxable under Cargo Handling Service but falls under Business Auxiliary Service. The appellant has been paying service tax under Business Auxiliary service category since 10-9-04 and has sought registration with the Department from 2004. The appellant claimed that the show cause notice issued on 2-8-07 makes the proceeding time-barred, asserting success on both merit and limitation.

2. The Department, however, relied on a Tribunal decision and contended that the appellant's activities of collecting material from the mine, processing it in the factory, and then packing and loading Rock Phosphate Powder into trucks for delivery fall under Cargo Handling service. The Department argued that the appellant does not qualify for the benefit of a previous case and may be required to make the entire pre-deposit.

3. Upon hearing both sides and examining the record, the Tribunal was not prima facie satisfied with the appellant's claim under the Business Auxiliary Service category. The Tribunal acknowledged that the appellant's activities might bring them under the category claimed by the Revenue. However, the Tribunal emphasized the need to consider the case from the angle of limitation. While the appellant had informed the Department about their activities and fulfilled statutory obligations by filing returns, the Tribunal cautioned that filing returns does not exempt the appellant from scrutiny if any discrepancies are found post-filing.

4. The appellant raised concerns about the difficulty in interpreting the law and requested leniency. Considering the time bar aspect, the Tribunal directed a waiver of the pre-deposit during the appeal's pendency without expressing a final opinion on the matter.

This judgment highlights the complexities surrounding the taxability of specific services, the importance of timely compliance and registration, and the need for a comprehensive examination of facts and legal provisions in resolving disputes related to service tax classification.