2018 (11) TMI 839 - AT - Service Tax

Cargo Handling Services - activity of loading of coal from Railway siding into Railway wagons making use of Pay Loader - transport of coal from the pit head to various other points within mines - time limitation - penalty. Activity of loading of coal from Railway siding into Railway wagons making use of Pay Loader - Held that - The activity has been held to be liable for payment of Service Tax under Cargo Handling Services in the case of Gajanad Agrawal v. Commissioner 2008 (6) TMI 163 - CESTAT KOLKATA , where it was held that agreement of the parties that time was essence of the contract, nature of activity that was carried by the Appellants squarely falls under the definition of cargo handling service. Any activity incidental to freight of cargo is liable to be taxed under cargo handling service - the levy of service Tax on merit is upheld but levy restricted to normal period - penalty also set aside. Activity of movement of coal within the mine from pit head to other areas - Held that - This activity has been considered in the appellant s own case for a different mine in the decision 2017 (9) TMI 1329 - CESTAT KOLKATA . For such movement of coal within the mine, the Tribunal has taken the view that the activity cannot be levied to Service Tax under the Category of Cargo Handling Services - demand cannot be upheld. Appeal allowed in part.

Summary

Issues:
Appeal against Order-in-Original regarding liability for Service Tax under "Cargo Handling Services" for activities related to loading coal and transporting within a mine.

Analysis:

1. Loading of Coal at Railway Siding:
The appellant loaded coal into railway wagons at the railway siding for onward transportation, which was considered liable for Service Tax under "Cargo Handling Services." The appellant argued citing a previous case but requested dropping penalties due to infancy of levy. The Tribunal upheld the levy of Service Tax but restricted it to the normal time limit, waiving penalties under Section 80 of the Finance Act, 1994.

2. Movement of Coal Within Mine Area:
The activity of moving coal within the mine area from pit head to other points was also deemed liable for Service Tax under "Cargo Handling Services." However, the Tribunal disagreed based on previous decisions in the appellant's favor, stating that such activities do not fall under cargo handling services. The Tribunal set aside the levy of Service Tax for this activity, following precedents and directing the Adjudicating Authority to restrict the levy to the normal time limit.

3. Contrary Views and Differentiating Decisions:
The Revenue cited cases with contrary views to support the levy of Service Tax. However, after reviewing the cited decisions and considering the Tribunal's previous orders in the appellant's case for similar activities, the Tribunal found it appropriate to follow its own decisions. The Tribunal set aside the levy of Service Tax for movement of coal within the mine and upheld the levy for loading coal into railway wagons within the normal time limit.

4. Final Decision:
In conclusion, the Tribunal partly allowed the appeals, setting aside the levy of Service Tax for moving coal within the mine and upholding the levy for loading coal at the railway siding within the normal time limit. The Tribunal directed the Adjudicating Authority to restrict the levy accordingly.