2012 (5) TMI 290 - AT - Service Tax

Cargo handing service - Movement of coal from mine surface to tip head within the mine area. - held that - Reading of relevant clauses of agreement extracted in show cause notice does not throw light that loaders were let out by appellant with the concurrent obligation of loading of coal. When there was no letting out of loaders, entire activity was to discharge the obligation of loading of coal within the mining area as is observed-aforesaid. Mere loading of coal within the mining area does not amount to Cargo Handling Service as has been held in the case of Sainik Mining & Allied Services Ltd. (2007 (11) TMI 90 (Tri) ) and there is no instruction from Revenue whether that order of Tribunal has been reversed or stayed by any higher court. - Decided in favor of assessee.

Issues:
1. Whether the service provided for the movement of coal within the mine area qualifies as Cargo Handling Service.
2. Whether the appellants are entitled to the benefit of a previous Tribunal decision.
3. Whether the judgment of the Hon'ble Orissa High Court in a similar case is applicable to the present situation.

Issue 1:
The primary issue in this case is whether the service provided by the appellants for the movement of coal within the mine area constitutes Cargo Handling Service. The Revenue argued that since the coal was loaded at different places and transported to different locations for unloading, it falls under the category of Cargo Handling Service. However, the appellants contended that the activity of loading coal within the mining area does not amount to Cargo Handling Service, citing a previous Tribunal decision in the case of Sainik Mining & Allied Services Ltd. The Tribunal analyzed the terms of the agreement between the parties, emphasizing that the loading of coal was done within the mining area using payloaders, and there was no letting out of loaders. The Tribunal concluded that the mere loading of coal within the mining area does not qualify as Cargo Handling Service, especially considering the absence of any reversal or stay of the previous Tribunal decision by a higher court.

Issue 2:
Another crucial issue addressed in the judgment is whether the appellants are entitled to the benefit of a previous Tribunal decision, specifically the case of Sainik Mining & Allied Services Ltd. The appellants argued that their situation aligns with the decision in the Sainik Mining case and should be allowed the same benefit. The Tribunal examined the factual background of the case cited by the Revenue, where payloaders were let out on a hire basis for the transportation of coal to railway wagons. In contrast, the appellants in the present case were engaged in loading coal within the mining area without letting out loaders. The Tribunal emphasized that the appellants had specifically pleaded the benefit of the Sainik Mining decision, and since the factual matrix was similar across all cases, the decision in the present appeals should align with the Sainik Mining case, which had reached finality.

Issue 3:
The judgment also delves into the applicability of the judgment of the Hon'ble Orissa High Court in a similar case involving Coal Carriers. The Tribunal scrutinized the Orissa High Court's decision, which held that Cargo Handling Service includes activities adjunct to the actual transportation of goods, such as unloading. However, the Tribunal noted that in the present case, there was no finding that the appellants were engaged in loading coal at the railway siding, a crucial aspect for categorizing the service as Cargo Handling. The Tribunal concluded that merely bringing coal to the railway siding did not automatically qualify as Cargo Handling Service. Therefore, the judgment of the Orissa High Court in the Coal Carriers case was deemed not supportive of the Revenue's stance.

In conclusion, the Tribunal allowed the appeals, setting aside the demands raised against the appellants, based on the analysis of the nature of the service provided, the applicability of previous decisions, and the interpretation of Cargo Handling Service in the context of the activities carried out within the mining area.

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