2014 (3) TMI 304 - AT - Service Tax

Waiver of pre-deposit of Service Tax - Cargo Handling Service - Composite services of shifting/transportation of materials - GTA Services - Held that - Applicant in this case has got various work orders from M/ s.UML for unloading, loading, track cleaning and transportation of iron ore from Railway siding to the premises of M/ s.UML and stacking thereof at M/ s.UML . In other cases the contract was for hiring of the equipments to M/ s.UML s Railway siding for hoping of iron fines, cleaning of rakes, handling of materials in the works of M/ s.UML etc. We find from the various contracts that rate quoted is for composite services and on per M.T. basis. As per note appended to the contract order the above rates are based on considering the day time traffic restriction. Further in order to cope up with the increased movement of additional quantity of raw material through Railway siding, adequate number of vehicles (dumpers/trucks) is to be deployed on regular basis. It is to be ensured that all the lorries/dumpers used for carrying out the job are fully equipped with all valid genuine documents such as tax token; owner-book, insurance policy, driving licence etc. so that there will be no problem/non-compliance en route till the delivery of the materials at the stacking yard. Any liability arising on lapse on this account will be to the Applicant s account. No increase in transportation rate will be entertained during the contract period. However, the same may be reviewed at discretion of M/ s.UML . It appears from the foregoing facts that transportation is the principal activity and the loading and unloading are only ancillary to the activity of transportation. In case of composite services of shifting/transportation of materials where loading and unloading is ancillary to the main activity of transportation are held to be classifiable under GTA Services. Further the various activities undertaken by the contractor inside the works were held to be non-taxable. We also find that in this case M/s. Usha Martin Ltd. has already discharged the tax on GTA Services under the Reverse Charge Mechanism. In these circumstances we are prima facie of the view that all the Applicants have made out prima facie case for waiver of pre-deposit of entire amount of dues adjudged against each of them. Accordingly pre-deposit of dues adjudged against each of the Applicants is waived and its recovery stayed during pendency of the Appeals - Following decision in Om Shiv Transport 2013 (5) TMI 110 - CESTAT NEW DELHI and M/s. R.K.Transport Company 2012 (3) TMI 271 - CESTAT, NEW DELHI - Stay granted.

Summary

Issues:
Waiver of pre-deposit of Service Tax amount along with penalties imposed on the company and partners.

Analysis:
The Appellants sought waiver of pre-deposit of Service Tax amount and penalties imposed on them. The Ld.Sr.Advocate argued that the Applicant received work contracts from M/s. Usha Martin Ltd. for various activities related to unloading, loading, track cleaning, and transportation of materials. The rate quoted was for composite services on a per metric ton basis. The show cause notice demanded duty under 'Cargo Handling Service,' which was confirmed by the adjudicating Commissioner. The Ld.Sr.Advocate relied on various decisions to support the argument that the services provided should be classified under GTA Services rather than Cargo Handling Services.

The Revenue reiterated the findings of the adjudicating Commissioner. The Tribunal examined the contracts and found that the rate quoted was for composite services on a per metric ton basis. It was noted that transportation was the principal activity, while loading and unloading were ancillary. Referring to a Board's Circular, it was clarified that transportation is not the essential character of cargo handling service. The Tribunal also considered case laws where transportation and stacking/handling within the premises were not considered covered by Cargo Handling Services.

In previous cases, it was observed that transportation services with ancillary loading and unloading activities were classified under GTA Services. The Tribunal differentiated between GTA Services and Cargo Handling Services, emphasizing that mere transportation does not fall under cargo handling. The Tribunal also highlighted that activities like shifting/transportation of materials within a plant were not taxable under Cargo Handling Services. The Tribunal concluded that the Applicants had made out a prima facie case for waiver of pre-deposit of dues adjudged against them, and the recovery was stayed during the pendency of the Appeals. The Stay Applications were allowed.

In summary, the judgment addressed the issue of waiver of pre-deposit of Service Tax amount and penalties imposed on the company and partners. The Tribunal examined the nature of services provided, emphasizing the distinction between transportation and cargo handling services. Relying on relevant case laws and circulars, the Tribunal concluded that the Applicants were eligible for the waiver, considering the classification of services under GTA Services and the non-taxable nature of certain activities.