2006 (8) TMI 28 - HC - Service Tax

Service Tax Cargo handling service Services provided by petitioner such as transporting coal from wagons to thermal power station by conveyor belt and without use of any transportation does not fall under the ambit of cargo handling services High Court has the power to entertain a petition under Article 226 of Constitution of India

Summary

Issues:
Challenge to order for registration and service tax payment for Cargo Handling Services.

Analysis:
1. Contract Details: The petitioner, a construction company, was contracted for unloading coal and related activities for a thermal power station.

2. Service Tax Introduction: The concept of service tax was introduced in 1994, with specific provisions under the Finance Act, 1994. Cargo Handling Services were included in taxable services under Clause 23 of Section 65.

3. Petitioner's Argument: The petitioner argued that their services did not fall under Cargo Handling Services as they were only handling coal within the power station premises, not involving transportation.

4. Department's Position: The department contended that the petitioner's services did fall under Cargo Handling Services, citing a circular and the nature of the work performed.

5. Court's Analysis: The court examined the nature of the work assigned to the petitioner, which involved unloading coal and feeding it to the boiler bunkers. The services were detailed, involving manual work and mechanical devices but not transportation by motor vehicles.

6. Definition of Cargo Handling: The court referred to the definition of Cargo Handling Services, emphasizing the handling of goods to be transported by various means. It was noted that the petitioner's service of moving coal within the power station did not involve transportation by any means.

7. Alternate Remedy: The court addressed the preliminary objection of suggesting an alternate remedy, ruling that in cases where the authority's decision touches jurisdiction or authority, the High Court can entertain a petition under Article 226 without relegating the petitioner to lengthy proceedings.

8. Judgment: The court allowed the writ petition, quashing the order for registration and service tax payment for Cargo Handling Services, stating that the petitioner's services did not fall under the ambit of Cargo Handling Services and were not liable for service tax.