2014 (1) TMI 1051 - AT - Service Tax

Cargo Handling Services - Commissioner dropped demand - Held that - service of shifting, transportation of raw materials, waste materials, and finished products from one place to another, inside the plant itself, does not fall under the taxing category of Cargo Handling Services. The activities undertaken by the appellant are admittedly within the plant itself - Following decision of Modi Construction Co. vs. CCE, Ranchi 2008 (6) TMI 22 - CESTAT, KOLKATA - Decided in favour of assessee.

Summary

Issues:
Identification of services provided by the appellant to M/s Bhilai Steel Plants and determination of whether they fall under Cargo Handling Services for service tax liability.

Analysis:
The judgment involves two appeals, one by the assessee and the other by the Revenue, concerning the provision of services by the appellant to M/s Bhilai Steel Plants. The Revenue claimed that the services provided were Cargo Handling Services, necessitating the discharge of service tax by the assessee. Initially, a demand of Rs. 72,51,113/- was confirmed by the Adjudicating Authority. However, a subsequent show cause notice for recovery of service tax amounting to approximately Rs. 7.21 crores was dropped by the Commissioner based on a Tribunal judgment. The Commissioner's decision was challenged by the Revenue in their appeal, which was dependent on the outcome of the assessee's appeal.

The activities undertaken by the appellant for M/s Bhilai Steel Plants were detailed, involving processing and recovery of iron and steel scrap from various sources. The Commissioner considered these activities within the plant and relied on a Tribunal decision in the case of Modi Construction Co. vs. CCE, Ranchi to hold that the services provided did not fall under Cargo Handling Services for service tax liability. The Adjudicating Authority also referred to other Tribunal decisions supporting the non-levy of service tax in similar cases. The Revenue contested the Commissioner's decision based on the pending appeal against the Modi Construction Co. case, which was later dismissed by the Hon'ble Jharkhand High Court.

The Tribunal, upholding the decisions in the Modi Construction Co. case and other related Tribunal decisions, concluded that the services provided by the appellant, involving shifting and transportation of materials within the plant, did not constitute Cargo Handling Services for service tax purposes. The Tribunal cited precedents and held that the activities undertaken by the appellant were not taxable under Cargo Handling Services. Additionally, the Tribunal referenced similar cases involving activities for steel plants where demands for service tax were dropped, supporting the rejection of the Revenue's appeal and the allowance of the assessee's appeal.

In summary, the judgment resolved the issue of service tax liability for services provided by the appellant to M/s Bhilai Steel Plants, determining that the activities did not fall under Cargo Handling Services based on established legal precedents and Tribunal decisions, ultimately allowing the assessee's appeal and rejecting the Revenue's appeal.