2017 (11) TMI 1463 - AT - Service Tax

Classification of services - Cargo Handling service or works contract? - respondent-assessee are engaged in providing a range of services to NMDC with reference to mining, transportation, loading of iron ore for NMDC in their mines - Held that - it is clear that the respondent-assessee are engaged in mechanised excavation, loading and transportation of iron ore fines in tippers. The operation is mechanised and the nature of loading activities and the distance of transport has also been mentioned in the work orders - the Tribunal in the case of Kanak Khaniz Udyog vs. CCE, Jaipur-II 2017 (3) TMI 1365 - CESTAT NEW DELHI and in Hazaribagh Mining & Engg. Pvt. Ltd. vs CCE.,C&ST, BBSR-I 2016 (12) TMI 1131 - CESTAT, KOLKATA held that the tax liabilities in these type of activities will arise only from 01.06.2007 under mining services and cannot be taxed under Cargo Handling Services - appeal allowed - decided in favor of appellant.

Summary

Issues:
Dispute over tax liability for mechanised excavation, loading, and transportation of iron ore fines under 'Cargo Handling Services' for the period 16.08.2002 to 04.02.2007.

Analysis:
The case involved two interconnected appeals by the Revenue regarding the tax liability of the respondent assessee for activities related to mechanised excavation, loading, and transportation of iron ore fines for NMDC. The Revenue sought to tax these activities under 'Cargo Handling Services' for a specific period. The original order confirmed a service tax demand against the respondent along with penalties. However, on appeal, the Commissioner (Appeals) set aside the original order, directing a refund of the service tax already paid after verification. The Revenue contested this decision, leading to further appeals.

The Revenue argued that the Commissioner (Appeals) erred in determining the scope and classification of the activities undertaken by the respondent for NMDC. They contended that as per a clarification issued by the Board, the demand under 'Cargo Handling Services' should have been upheld. On the other hand, the counsel for the respondent contested the appeals, emphasizing that the nature and scope of activities had been thoroughly examined by the Commissioner (Appeals). The impugned order detailed the various activities undertaken by the respondent and concluded that they cannot be taxed solely under 'Cargo Handling Services.'

The Tribunal's analysis revealed that the respondent was engaged in comprehensive activities related to mining, transportation, and maintenance, making it challenging to segregate specific services for taxation under 'Cargo Handling Services.' The impugned order highlighted that the respondent's primary work was excavation and transportation of iron ore, with loading and unloading being incidental to the transportation work within a specific distance. The Tribunal referenced previous decisions to support the finding that tax liabilities in such activities would not fall under 'Cargo Handling Services' but under mining services. The Tribunal dismissed the appeals by the Revenue, concluding that the nature of activities undertaken did not warrant taxation under 'Cargo Handling Services.'

In conclusion, the Tribunal upheld the impugned orders, finding no errors in the analysis and dismissing the appeals filed by the Revenue.