2008 (11) TMI 132 - AT - Service Tax

Contract with SAIL for undertaking certain activities like transportation of iron ore within in the mines area in view of tribunal s decision in the case of Sainik Mining & Allied Services Ltd. wherein it has been held that transportation within the mines area cannot be treated as amounting to cargo handling and that handling of cargo, if any, is incidental to transportation., stay is granted in instant case

Summary

Issues:
Interpretation of contracts for transportation of iron ore within mines area as cargo handling services for service tax liability.

Analysis:
The case involved contracts with SAIL for activities in the mines area, specifically transportation of iron ore within the mines area by different appellants. The dispute spanned a period from 2002 to 2007. The appellant argued that their activities did not amount to cargo handling services, citing precedents where transportation within mines was not considered cargo handling. The Department, however, relied on circulars stating that handling and transportation within mines are chargeable to service tax under cargo handling services. After considering both sides and perusing the contracts, the Tribunal found that the activities undertaken by the appellants did not fall under cargo handling services. The Tribunal referenced a case where it was held that transportation within the mining area does not constitute cargo handling service, and loading and unloading activities were merely incidental. The Tribunal concluded that the gross amounts received for transportation within the mining area were not taxable under cargo handling services. Consequently, the Tribunal waived the pre-deposit of dues and stayed recovery until the disposal of the appeals, clubbing all appeals together.