2014 (10) TMI 450 - AT - Service Tax

Cargo handling service - Assessee pleaded that he was only handling the goods in the factory and also removing the garbage (malba) and pleaded that his activity is not cargo handling - Held that - Activity of the respondent was unloading of the store material, gunny bags, chemicals, etc. in the factory, shifting of the sugar bags from one place to another, removing garbage (malba), etc. There is nothing on record to indicate that the respondent was involved in packing and loading of the sugar onto vehicles/railway wagons for transport. The Division Bench of this Tribunal in the case of Sainik Mining & Allied Services Ltd. v. CCE, BBSR reported in 2007 (11) TMI 90 - CESTAT, KOLKATA has held that transportation of the coal in the colliery and deployment of machines and tipper trucks for transport of coal from quarry beds to surface stocks/railway sidings is not covered by cargo handling service - cargo handling service is an adjunct service to the actual transportation of the goods and that pre-transportation activities like packing, loading and post-transportation like unloading/unpacking, etc. would be covered under cargo handling service category. Since in this case, activity of the Respondent is handling of the goods in the factory or godown or removing of garbage, the same cannot be said to be an activity adjunct to transportation of the goods. Therefore, the respondent s activity would not be covered by cargo handling service as defined under Section 65(23) as he has not handled any cargo i.e. the goods meant for transport. - Decided against Revenue.

Summary

Issues: Service Tax demand for cargo handling services.

Analysis:
The appeal pertains to a Service Tax demand of &8377; 58,250/- along with interest against the respondent for allegedly providing cargo handling services without paying the Service Tax. The Dy. Commissioner confirmed the demand and imposed penalties under Sections 76, 77, and 78 of the Finance Act, 1994. The Commissioner (Appeals) later set aside the Dy. Commissioner's order, stating that the respondent's activity is not cargo handling but could be classified as the supply of manpower service. The Revenue filed an appeal against this decision.

During the hearing, the Departmental Representative argued that the respondent's activities, including unloading and stacking goods in a sugar mill, amounted to cargo handling services. On the other hand, the respondent contended that he was merely handling goods in the factory and removing garbage, not providing cargo handling services subject to Service Tax.

The Tribunal examined the submissions and records, noting that the respondent's activities involved unloading store materials, shifting sugar bags, and removing garbage within the factory premises. The Tribunal referenced a previous case to establish that cargo handling services typically involve activities related to the transportation of goods, such as packing, loading, unloading, and unpacking in connection with actual transportation. Since the respondent's activities did not involve handling goods meant for transport, the Tribunal concluded that they did not fall under the definition of cargo handling services as per Section 65(23) of the Finance Act, 1994. Consequently, the Tribunal upheld the Commissioner (Appeals)' decision, dismissing the Revenue's appeal against the Service Tax demand for cargo handling services.

The judgment provides a detailed analysis of the activities in question, comparing them to the definition of cargo handling services under the relevant legal provisions. By referencing precedents and legal interpretations, the Tribunal clarified the scope of cargo handling services and determined that the respondent's activities did not qualify as such, leading to the dismissal of the Revenue's appeal.