2019 (10) TMI 888 - AT - Service Tax

Classification of goods - Cargo Handling Services or not - loading and transportation of coal from Quarry Beds/Coal Handling Plants/Surface Stock to different destinations within the mines - HELD THAT - The conclusions of the Ld. Commissioner (Appeals) that under the contract the Appellant is to transport coal by Tipper for short distances within the mines including loading, hence, it is taxable under Cargo Handling Service , cannot be countenanced. Under Sec. 65(105)(zzp) read with Sec.65(50a) and Sec. 65(50b) of the Finance Act, 1994, the requirement of provisioning of taxable service to any person by a Goods Transport Agency in relation to transport of goods by road in a goods carriage stands satisfied in this case and transport for long or short distances is not the relevant criterion for classification under the category of Goods Transport Services. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of services under "Cargo Handling Services" or "Goods Transport Agency Services" for transportation and loading of coal within mines.

Analysis:
The appeal concerned a dispute over the classification of services provided by the Appellant for loading and transportation of coal within mines. The Service Tax demand was based on categorizing the services under "Cargo Handling Services" due to the short distances involved. The Appellant argued that the services should be classified under "Goods Transport Agency Services" irrespective of distance, citing relevant sections of the Finance Act, 1994. The Appellant relied on previous tribunal decisions supporting their position.

The Tribunal analyzed the contracts and relevant provisions of the Finance Act. It noted that the critical factor for classification under "Goods Transport Agency Services" is the provision of taxable service by a Goods Transport Agency, regardless of distance. The Tribunal disagreed with the lower authorities' classification under "Cargo Handling Services" based on the short distances within mines. It referenced previous tribunal decisions, including CCE Vs. Sainik Mining Allied Services Ltd., to support its conclusion that loading and transportation of coal within mines do not fall under "Cargo Handling Services."

Ultimately, the Tribunal set aside the impugned order and allowed the appeal in favor of the Appellant, providing consequential relief. The decision clarified the classification of services under "Goods Transport Agency Services" for transportation and loading activities within mines, emphasizing the relevance of the service provider rather than the distance traveled.