2024 (8) TMI 716 - AT - Service Tax

Scope of SCN - demand of Service Tax has been confirmed under the category of clearing and forwarding agents services - the cargo handling service‟ has been confirmed which is not the subject matter of the Show Cause Notice - HELD THAT - As in this case, Show Cause Notice proposes to demand of Service Tax under the Mining Service which the Adjudicating Authority has held that the demand is not sustainable under Section 65105(zzzy) of the Finance Act, 1994 which means that the activity undertaken by the appellant does not fall under Mining Services . But the Adjudicating Authority has gone beyond the scope of the Show Cause Notice by holding that the activity undertaken by the appellants falls under Section 65(105)(zr) of the FA, 1994 which is beyond the scope of the Show Cause Notice. Thus, demand proposed in the Show Cause Notice under Mining Service and confirmed under Cargo Handling Service . Therefore, the impugned order is not sustainable in the eyes of law which is beyond the scope of Show Cause Notice. Accordingly, impugned order is set aside. Appeal allowed.

Summary

Issues:
Appeal against demand of Service Tax under "clearing and forwarding agents services"; Scope of Show Cause Notice; Classification of services under "Mining Service" or "Cargo Handling Service".

Analysis:
The appellant appealed against an order confirming the demand of Service Tax under the category of "clearing and forwarding agents services." The appellant, engaged in loading and transporting Uranium Ores and Tailing Sand for a Public Sector Undertaking, argued that the impugned order went beyond the scope of the Show Cause Notice. The appellant contended that the activity should be classified as "cargo handling service" rather than "Mining Service" as alleged in the Show Cause Notice. The Adjudicating Authority had confirmed the demand under "Cargo Handling Service," which was not the subject matter of the Show Cause Notice, leading to the appeal.

During the proceedings, the Adjudicating Authority referred to the definition of "Mining Operation" under the Mines Act, 1952, and concluded that the transportation of minerals did not necessarily fall under mining operations. The appellant's dominant contract nature with the Public Sector Undertaking was transportation, leading to the argument that the service should be classified under Goods Transport Agency (GTA) services. The Authority also analyzed the distances between mines and processing plants to determine that transportation was ancillary to loading and unloading, categorizing the service as cargo handling rather than GTA service.

The Tribunal found that the demand proposed in the Show Cause Notice under "Mining Service" was not sustainable, as the activity did not fall under that category. However, the Adjudicating Authority had classified the service under "Cargo Handling Service," which was beyond the scope of the Show Cause Notice. Therefore, the impugned order was set aside as it exceeded the Show Cause Notice's scope. The appeal was allowed with consequential relief, if any, granted to the appellant.