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TMI Blog2011 (12) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... produced below to understand the scope of the service. "Copy of work order from B.K. Singh, Addl General Manager, SECL: GEVRA Area, office of the Chief General Manager, South Eastern Coalfields Ltd, Gevra Area, PO Gevra Project, Distt Korba (CG) addressed to M/s Niranjanlal Agarwal, Main Road, Tulsi Marg, Korba (CG) 495677. Sub : Work order for hiring of payloader 70 lakh tes. Of coal into Railway wagons at Junnadih Rly siding with min 19200 Tes per day including levelling of coal loaded into wagons to avoid over/under loading NIT No. 4650 dated 24.12.2003-LOI Bi, 1352 dated 8.3.2004 - Period 12 months Please refer to your offer given for undertaking the subject tendered work. The Management has been pleased to accept your offer for execution of subject tendered work @ Rs. 2.81 per tonne and award the subject tendered work in your favour for period of 12 months for a total value of Rs. 196.70 lakhs (Rupees one crore/ninety six lakhs/seventy thousand/only) as per details given below, keeping the base price of diesel as Rs. 24.39 per litre for the purpose of calculation of diesel escalation/de-escalation. Description of work Awarded Qty in lakh tes Min TPD Rate Value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the tender documents and its addendum to tender document. You are requested to please submit the non-judicial stamp paper worth Rs. 250/- along with necessary documents for execution of the agreement for the awarded work. This issues with the approval of Competent Authority." 3. Definition of Cargo Handling Service under section 65(23) of the Finance Act 1994, during the relevant period was as under: "(23) "cargo handling service" means loading, unloading, packing or unpacking of cargo and includes cargo handling service provided for freight in special containers or non-containerized freight, services provided by a container freight terminal or other freight terminal for all modes of transport and cargo handling service incidental to freight, but does not include handling of export cargo or passenger baggage or mere transportation of goods" 4. The main submissions on behalf of the Appellants are the following: (i) The contract was for hiring out payloaders owned by the Appellant to SECL for loading of coal in railway wagons stationed at Gevra Road Railway siding. Even though the drivers of payloaders were on the pay roll of the Appellant, the drivers of pay loaders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had addressed many letters to the department of Revenue on the issue which shows the confusion which was prevailing at that time. So they argue that the demand is time-barred as per decision in the case of Dalveer Singh (supra); (xi) Appellant being a proprietary concern Appellant could not have been considered as a cargo handling agency. (xii) If at all service tax is leviable, tax amount is to be computed by taking the amount realized as cum-tax value. (xiii) They also argue that they have given all the reasons why they did not pay service tax and hence they should be eligible for the benefit under section 80 of Finance Act 1994 and penalty should be waived. 5. During the hearing on 21-07-2011 the counsel for the Appellants was stressing on two judgments of High Court namely,- (i) CCE v. Modi Construction Co. [2011] 33 STT 161/13 taxmann.com 202 (Jharkhand) (ii) S.B. Construction Co. v. Union of India [2007] 6 STT 385 (Raj.) The first case is cited to contest the issue that handling of goods within the mines cannot be cargo handling. Emphasis was more on the decision in the case of S.B. Construction Co. (supra). The Ld. Counsel pointed out that the activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax laws; (ii) They did not disclose the relevant information to the department for examining whether the activity was taxable; (iii) They did not discharge the tax liability. So he argues that the charge of suppression is maintainable. 10. We have considered arguments on both sides and the work order. We are not in agreement with the argument of the Appellants that they were in the business of just hiring out pay loaders. A reading of the work order clearly shows that their work was to load coal into the railway wagons. The compensation given to them was also based on per ton of coal loaded and not based on number of pay loaders given. Though this is not a conclusive test to determine the nature of the activity consideration of the terms of the work order along with this fact persuades us to reach the conclusion. Further the argument that the activity was carried out by SECL is also not acceptable. Supervision of work to ensure that a contractor carries on work properly does not amount to carrying out the work. We are not able to agree with the contention that if any mechanized means is employed there is no handling of cargo. In the context of conveyer system use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Revenue was seeking to tax the activity of transportation of coal from Railway wagons to the Thermal Power Station under the category of "Cargo Handling Service" for the reason was that first there was an activity of unloading of coal from Railway wagons and then only other activities followed. This amounted to arguing the first activity determined the character of the entire activity. The Court has held the activity to be one of transporting coal from wagons to Thermal Power Stations. Further such transportation itself was done using a conveyor system. The court also agreed with the contention that at that stage the goods was not "cargo" within the normal meaning of the word (para 9 of the order). So the Court held that the activity is not covered by the entry for cargo handling service. 14. The decisions of the Tribunal in the case of B.K. Thakkar (supra) and Dalveer Singh (supra) also the decisions were on similar facts. 15. In the case at hand the activity is only that of loading of coal into Railway wagons. The payment made is per metric ton of coal loaded. At the stage of loading of cargo into railway waggons there can be no doubt that the goods are cargo. So we are o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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