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2024 (9) TMI 926 - AT - Service TaxLevy of service tax - Cargo Handling Service - Cargo Handling Service - Transportation of Ash upto distance of 25 km./31 km. with incidental Loading of Ash (evacuation of Ash) - Extended period of limitation. Cargo Handling Service - Mining Service - HELD THAT - This issue has been examined by this Tribunal in the case of M/S MAA KALIKA TRANSPORT PRIVATE LIMITED VERSUS COMMISSIONER OF CGST CENTRAL EXCISE, ROURKELA, ROURKELA 2023 (7) TMI 435 - CESTAT KOLKATA , wherein this Tribunal has observed that ' the Appellant was not providing any of the services mentioned above which fall under the category of Cargo Handling Agent Service . Further, we observe that there was no proposal in the Notice to categorize the service rendered by the Appellant as Cargo Handling Agent service . In the impugned order, the adjudicating authority classified the services under the category of Cargo Handling Agent Service on his own.' As the issue has already been settled that the transportation of goods outside the mines, do not qualify under Cargo Handling Service . Therefore, the demand of Rs.14,92,41,316/- has been rightly dropped by the adjudicating authority and the demand of Rs.13,77,14,657/- is also not sustainable under the Cargo Handling Service , which is only transportation of goods agency service. Mining Service - HELD THAT - The activity undertaken by the assessee, is the transportation of coal up to the distance of 7 km, which is incidental loading and the same is taxable under Transport of Goods by Road Service as held by the Hon ble Supreme Court in the case of Commissioner of Central Excise and Service Tax, Raipur Vs. Singh Transporters 2017 (7) TMI 494 - SUPREME COURT , wherein it has been held that the transportation of coal from pit head to railway siding inside the mines is taxable as Goods Transport Agency Services . Circular No.334/1/2008-TRU dated 29.02.2008, has clarified that the method of charging or invoicing does not in itself determine whether the service is a single service or multiple service. Single price normally suggest single supply though not decisive. The real nature and substance of the transaction and not merely the form of the transaction should be the guiding factor to decide the classification. The classification is to be determined based on essential feature or dominant activities. Thus, the transportation of coal within mines up to the distance of 7 km, falls under the category of Transport of Goods Agency Services and not under the Mining Services - the demand under Mining Service of Rs.10,18,98,846/- is not sustainable against the assessee. Service tax of Rs.3,58,15,811/- is demanded on the differential value of services as provided and the service tax has been confirmed against the assessee - HELD THAT - The contention of the assessee that the said demand is relating to works contract service , on which the assessee has paid the tax at the rate of 4.12% under composite scheme. Therefore, the said demand is not sustainable against the assessee. The appeal filed by the assessee is allowed and the appeal filed by the Revenue is dismissed.
Issues Involved:
1. Demand of Service Tax under "Cargo Handling Service" and "Mining Service." 2. Classification of contracts under "Cargo Handling Service" or "Transport of Goods by Road Service." 3. Classification of contracts under "Mining Service" or "Transport of Goods by Road Service." 4. Demand of Service Tax on differential value between Profit & Loss Account and ST-3 returns. 5. Legality of invoking extended period of limitation for demand. Issue-wise Detailed Analysis: 1. Demand of Service Tax under "Cargo Handling Service" and "Mining Service": The assessee contested the confirmation of service tax demand of Rs.13,77,44,657/- under "Cargo Handling Service" and Rs.10,18,98,846/- under "Mining Service." The department appealed against the dropping of service tax demand of Rs.14,92,41,316/- under "Cargo Handling Service" for activities related to "Transportation of Ash." 2. Classification of Contracts under "Cargo Handling Service" or "Transport of Goods by Road Service": The assessee executed contracts for transportation of coal up to 11 km and transportation of ash up to 25 km/31 km. The tribunal found that these activities were essentially transportation services with incidental loading/unloading and should be classified under "Transport of Goods by Road Service" rather than "Cargo Handling Service." The tribunal relied on Circular No.104/7/2008-ST and Circular No.186/5/2015-ST, which clarified that ancillary services provided in the course of transportation should not be separately classified but treated as part of the transportation service. 3. Classification of Contracts under "Mining Service" or "Transport of Goods by Road Service": The assessee executed work orders for transportation of coal within mines up to 7 km and argued that these should be classified under "Transport of Goods by Road Service." The tribunal agreed, citing the Supreme Court judgment in CCE Vs. Singh Transporters (2017), which held that transportation of coal from pit head to railway siding within mines is taxable as "Goods Transport Agency Services." The tribunal also referred to Circular No.334/1/2008-TRU, emphasizing that the real nature and substance of the transaction should guide classification. 4. Demand of Service Tax on Differential Value between Profit & Loss Account and ST-3 Returns: The tribunal found that the demand of Rs.3,58,15,811/- was raised on an "adhoc basis" without specifying the service category. The assessee argued that this differential related to work contract service, on which tax was paid at a lower rate. The tribunal held that such a demand was not sustainable, referencing the case of Maa Kalika Transport Pvt. Ltd. Vs. CCGST (2023), which stated that demand cannot be raised based on income tax data without corroborative evidence. 5. Legality of Invoking Extended Period of Limitation for Demand: The tribunal noted that the show cause notice was issued beyond the normal period of limitation. The tribunal held that the extended period could not be invoked as there was no suppression of facts, and the dispute related to the classification of services. The tribunal referenced the Supreme Court's decision in International Merchandising Company, LLC Vs. CST (2022), which held that extended periods could not be invoked for classification disputes. Conclusion: The tribunal allowed the assessee's appeal and dismissed the revenue's appeal. It held that the activities in question should be classified under "Transport of Goods by Road Service" and not "Cargo Handling Service" or "Mining Service." The demand of Rs.3,58,15,811/- on the differential value was also not sustainable. The tribunal emphasized that the extended period of limitation could not be invoked in this case.
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