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TMI Blog2011 (2) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Finance Act, 1994 is rightly invoked against the appellant and determined the tax recoverable under Section 68 read with Section 73 of the Finance Act, 1994 along with interest under Section 75 of the Act also imposed penalty of Rs. 500/- under Section 75A of the Act. The determination of service tax is quasi judicial power of the Asst. Commissioner of Excise and he has issued the show cause notice and proceeded with. After issuance of the notice to the appellant prior to issuance of the notification No. 30/2005-S.T., dated 10-8-2005 the officer of the above rank had no jurisdiction to decide the liability of the assessee in the absence of such mentioning in the notification. The proceedings were concluded by the assessing officer who had the jurisdiction in view of the power vested in him prior to the notification was issued. Therefore, he had the competency to proceed with the proceedings. The show cause notice is within the period of limitation as provided under clause (e) to Section 73(1) proviso of Chapter V of the Finance Act, wherein “one year” period is substituted by “five years” by amendment to the said provision. Against assessee. - OTAPL Nos. 21-22 of 2009 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arise for consideration and answer the same in its favour. 5. It is stated that learned CESTAT by a common order against three appeals filed by the appellant upheld the demand of Service Tax amounting to Rs. 17,50,030/- and Rs. 1,53,990/- under Section 73 of the Finance Act, 1994 for the period from 16-8-2002 to 30-6-2004 and from 1-7-2004 to 31-3-2005 respectively along with interest under Section 75 mainly on the ground that under contracts for Hiring of Pay Loaders for transfer of Coal into Railway Wagons entered between the appellant and M/s. Mahanadi Coalfields Ltd., Burla, Samballpur (for short, the MCL ). The primary object of the parties were not to supply or let out Pay Loaders on hire basis taxable under the category of Supply of Tangible Goods defined under Section 65(105)(zzzzj) w.e.f. 16-5-2008 of the Act but were related to handling of Coal as Cargo taxable w.e.f. 16-8-2002 under the category of Cargo Handling Services defined under Section 65(23) read with Section 65(105)(zr). It is also observed that supply of Pay Loaders by the appellant were merely an aid to perform the service of loading of Coal (Cargo) into the Railway Wagon and not a case of letting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aded. Under the contract the appellant had to transfer 1700.000 MT. of coal per hour. 9. It is stated that like the aforesaid contract, another contract was awarded to the appellant vide Work Order No. MCL/CGM/LKPA/SO(M)/Pay Loader/03.04.0020, dated 6/11-2-2004 by MCL for Hiring of Pay Loader for Mechanical transfer of coal from Railway siding/platform into Rly. Wagons at Y Curve BOCM Siding at Chingriguda of Lakahnpur Area over a period of two years for a contract value of Rs. 92.99 lacs payable @ Rs. 2.79 per metric tonne of coal transferred/loaded. Under the contract the appellant had to transfer 900.000 MT. of coal per hour. Copies of the Work order dated 14/17-12-2002, Work Order dated 29-4-2003 and Work Order dated 06/11-2-2004, which are annexed to and part of the show cause notice dated 21-2-2005 are produced. 10. It is stated that the Sr. Intelligence Officer, Director General of Central Excise Intelligence, Regional Unit, Rourkela (For the short, the DGCEI ) vide letter No. 06/INV/St/2004, dated 23-7-2004 requested the appellant to compute their Service Tax liability on the value of above services received from MCL during 16-8-2002 to 30-6-2004 and deposit the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Cargo Handling Services defined under Section 65(23) on Rs. 2,39,57,313.54 received from MCL during 16-8-2002 to 30-6-2004 as the contract for Hiring of Pay Loaders for Mechanical transfer of coal into Railway Wagons is taxable under the category of Cargo Handling Services defined under Section 65(23) of the Act. The appellant was also required to show cause why penalties under Sections 75A, 76 and Section 77 of the Act should not be levied upon them for their failure to obtain registration, pay tax and furnish returns respectively. The appellant was directed to show cause before the Asst. Commissioner, Central Excise Customs, Sambalpur-I Division, Sambalpur. 13. It is stated that another show cause notice dated 31-5-2005 was issued by the Asst. Commissioner, Central Excise Customs, Sambalpur-I Division, Sambalpur for the subsequent period from 1-7-2004 to 31-3-2005 requiring the appellant to show cause why service tax amounting to Rs. 1,53,990/- should not be recovered from them under Section 73 read with Section 68 of the Act on Rs. 16,08,801/- received from MCL towards Pay Loader hire charges under the category of Cargo Handling Services along with interest under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the provisions of the Act are not only erroneous but also vitiated in law. The First Appellate Authority rejected such contention of the appellant holding that the provisions of the Act are attracted to the appellant. 16. Being further aggrieved by the said order, the appellant preferred appeal before the CESTAT. The CESTAT without exercising its appellate jurisdiction and power has concurred with the finding of facts accepted the determination of Service Tax liability payable under Section 65 of the Act by recording reasons in answer to the point that arose for its consideration and it has exercised its power. The correctness of the said order is questioned in these appeals by framing the aforesaid substantial questions of law and requesting this Court to answer the questions referred to above in favour of the appellant and to set aside the impugned orders by allowing these appeals. 17. The grounds of attack in support of contentions that the CESTAT failed to appreciate the provisions of Section 65(23) read with Section 55(105)(zr) is limited to handling of Cargo only and not handling of Goods and it failed to appreciate that under the Act only handling of Cargo is taxab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated so and wherever Legislature intended to tax services relating to Cargoes , it has used the term Cargo to limit the scope of levy. For instance, under Transport of goods by road services as defined u/s 65(50b), the expression Goods is used while under Cargo Handling Services defined u/s 65(23), the expression Cargo is used which clearly indicates that legislature while bringing the services under the tax net has clearly laid down its scope by deliberately using the expression Cargo and to define the scope of the levy. Undoubtedly, the use of the expression Cargo by the Legislature is a deliberate act with a Intention to restrict the scope of the levy only to Cargo Handling Services rendered only by Cargo Handling Agents and not to extend it to goods/materials handling activities. The intention of the Legislature can also be gathered from the new definition of Cargo Handling Services u/s 65(23) substituted by Finance Act, 2008 with effect from 16-5-2008. The old and new definitions of Cargo Handling Services are set out below : Old Definition Section 65(23) Cargo handling services means loading, unloading, packing or unpacking of cargo and include cargo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own as cargo. Therefore, the Assessing Officer has held the goods which were meant for transpiration from one place to another by any mode of transport is known as cargo. The meaning of loading - the term loading in the present context means the act of putting a load on or in as to load a car or a vessel. The act of loading invariably takes place at the starting place of the journey of the cargo. The meaning of Unloading - The term unloading means the act of discharging a cargo taking load from, disburdening or removing from. Thus while the act of loading refers to putting the cargo into the mode of transport at the starting point, the act of unloading refers to the removing of the cargo from the mode of transport at the destination point. It appears cargo handling is an adjunct service to the actual transportation of goods. The pre-transportation activities like packing/loading and post-transportation activities like unloading/unpacking have been brought under the service tax in the Cargo Handling Service category, which are provided by the Cargo Handling Agency. The clarification issued by the C.B.E.C. Circular F.No. B/1/2002-TRU, dated 1-8-02, vide Sl. No. 3 stipulates t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s required will have to be completed as stipulated in the tender document i.e. within 2.00 hrs. in the siding No. III from the time of placement of the empty rake by railways including wagon cleaning, door closing, leaving of coal and lime washing. An additional time not exceeding 45 minutes for completing the rake will be allowed. In case of failure to load the 58-N Box in the above allotted time period, the noticee shall be liable for penalty amounting to the demurrage charges by the railways, if any. In case of reasons of delay in loading are on account of the management s failure to provide sufficient coal etc. management may review the penalty. 6. (A) In case of weighment of coal is done on the spot by weigh bridge the responsibility for improper transfer will be of the contactor and penalty for under loading and over loading of wagons, if any, shall be recovered from the running bills of the contractors. (B) In case weighment is calculated on volumetric basis, the contractor s responsibility shall be- (i) To load the wagon to a predetermined height fixed by the management of MCL for each rake/wagon as the case may be and level the same to indicated height of loadin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and power by recording his reasons were examined by the CESTAT in the Second Appeal. The CESTAT in its concurrent finding of fact with reference to the grounds urged and considering the relevant law placed by the parties held that the order Impugned in the appeal does not call for any interference. However, penalty is set aside holding that there is no intention on the part of the appellant to suppress the payment of service tax to the Revenue. Therefore, that portion of the order is set aside. After carefully examining the correctness of the findings we are of the view that the grounds urged in respect of the first question is not tenable in law and the same is liable to be rejected. 25. Insofar as Question No. 4 is concerned, Circular No. 80/1/2005, dated 10-8-05 issued under Section 83A of the Act the Asst. Commissioner has no competence to adjudicate the case. The adjudication order is dated 31-8-2005 confirming the Service Tax demanded/determined and levied is without jurisdiction as the Asst. Commissioner, Central Excise has no competence after the notification is issued as the said contention urged on behalf of the appellant is wholly untenable in law for the reason th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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