2008 (3) TMI 68 - AT - Service Tax

Contract for activities like mining, loading, transporting and unloading of limestone from the mines According to Revenue, the definition of the term cargo handling includes the activities of loading, unloading, packing etc. of cargo, hence impugned activity is taxable Comm. (A) was justified in holding that the loading is incidental to mining and transportation respondent cannot be considered as an agent in the context of rendering cargo handling service appeal is rejected

Summary

Issues Involved:
Interpretation of service tax liability on activities like mining, loading, transporting, and unloading of limestone under a contract.

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi involved a dispute regarding the service tax liability on various activities related to mining, loading, transporting, and unloading of limestone under a contract. The Commissioner (Appeals) had previously dropped a demand and set aside a penalty imposed by the original authority after considering evidence that loading/unloading was incidental to transportation. The Departmental Representative argued that a portion of the amount received was for loading charges, which should be treated as cargo handling services. However, the Tribunal noted that the contract encompassed a series of activities from mining to delivery, with loading being incidental to mining and transportation. It was observed that even if cargo handling was considered a separate service, it was rendered to the respondent itself in completing the assigned work, not as a service to a third party. Therefore, the Tribunal upheld the decision of the Commissioner (Appeals) and rejected the appeal filed by the Department.

In a related matter, the Tribunal referenced a previous judgment against the Department in a case involving M/s Laxmi Trading Company, highlighting a consistent approach in similar issues. The Tribunal's decision in this case aligned with the interpretation that loading charges were not distinct cargo handling services but integral to the overall work assigned under the contract. As a result, the appeal was dismissed, affirming the decision of the Commissioner (Appeals) and providing clarity on the tax treatment of activities like mining, loading, transporting, and unloading of limestone under such contractual arrangements.