2017 (9) TMI 227 - AT - Service Tax

Cargo handling services - composite services - appellants were to conduct unloading/stacking of various raw materials from trucks/wagons, by mechanical device as well as manually - Held that - the Tribunal in the case of CCE, Udaipur Vs. M/s Balaji Builders & Contractors 2017 (8) TMI 903 - CESTAT NEW DELHI held that loading and shifting of goods etc. within the factory premises is not to be covered under cargo handling service as defined under Section 65(23) of Finance Act - the subject demands of service tax against the appellants hereby are set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the appellants provided taxable cargo handling services as per the Finance Act, 1994.
2. Whether the demands of service tax confirmed against the appellants are justified.
3. Interpretation of the definition of cargo handling service under Section 65(23) of the Finance Act.
4. Applicability of recent judicial precedents in determining tax liability.

Analysis:

Issue 1:
The appellants were alleged to have provided cargo handling services to a company, leading to show cause notices and demands of service tax. The department claimed that the services provided by the appellants fell under the definition of cargo handling services as per Section 65(23) of the Finance Act, 1994.

Issue 2:
Show cause notices resulted in demands of ?1,54,650/- against one appellant and ?4,90,923/- against the other, with penalties imposed under Sections 76 and 78 of the Finance Act. The orders in original confirming these demands were challenged before the Commissioner (Appeals) and subsequently brought to the Tribunal by the appellants.

Issue 3:
The Tribunal analyzed the definition of cargo handling service under Section 65(23) of the Finance Act, which includes loading, unloading, packing, or unpacking of cargo. The work order entered into by the appellants with the company indicated tasks related to unloading and stacking of raw materials, but the appellants argued that their activities did not fall under the taxable category of cargo handling services.

Issue 4:
Recent judicial precedents were considered in determining the tax liability of the appellants. The Tribunal referred to a case where it was held that loading and shifting of goods within factory premises did not constitute cargo handling services as defined under the Finance Act. Following this principle and a decision by the Allahabad High Court, the Tribunal set aside the demands of service tax against the appellants, allowing their appeals.

In conclusion, the Tribunal allowed the appeals of the appellants based on the interpretation of relevant legal provisions and judicial precedents, thereby relieving them of the confirmed demands of service tax.