2015 (7) TMI 856 - HC - Service Tax

Classification of service - Clearing and forwarding agent service - whether the services were liable to service tax under the provisions of the Act - Held that - Assessee is engaged in the business of trading in coal, transportation of coal by road and supervision of coal loading. In the order of the Commissioner as also in the Tribunal s order, it is recorded that the appellant entered into a contract with M/s. Ambuja Cement Limited for movement of coal from various collieries to the latter s plants. The main activity undertaken by the appellant included supervision of coal loading and transportation of coal by road - Decision in the case of M/s. Coal Handlers Private Limited vs. Commissioner of Central Excise, Range Kolkatta-I 2015 (5) TMI 249 - SUPREME COURT followed - Decided against Revenue.

Summary

Issues:
Interpretation of taxable service for supervisory services in coal handling; Classification of services under clearing and forwarding agent or business auxiliary services; Applicability of recent Supreme Court judgment on similar issue.

Analysis:
The High Court heard an appeal by the Revenue against the Customs Excise & Service Tax Appellate Tribunal's order. The Revenue argued that the Tribunal and Commissioner's orders failed to consider the appellant's supervisory services for coal handling, as detailed in the show cause notice. The definition of "taxable service" in relation to clearing and forwarding agents was crucial, with the Revenue contending a misconception in its application, raising substantial legal questions.

In response, the assessee cited a recent Supreme Court judgment favoring their position, emphasizing that the issue had been conclusively settled. The core issue revolved around whether the appellant's activities fell within the purview of clearing and forwarding services, given their coal trading, transportation, and supervision of loading. The Tribunal referred to precedents and clarified that supervision and loading of coal did not align with clearing and forwarding services but could be classified under business auxiliary services.

The Supreme Court's decision in a related case established that supervisory services for coal handling did not constitute clearing and forwarding services. The Court found the Supreme Court's ruling conclusive on the matter, dismissing the appeal for lacking merit. The judgment highlighted the importance of adhering to binding precedents and rejected the need to entertain legal questions already resolved by higher courts.