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TMI Blog2012 (4) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... cluding the amount accounted as reimbursement for transportation – decided against the assessee. Classification of service rendered by the transport contractors whether it is Transportation of Goods or Cargo Handling Service – Held that:- When there is composite service the service should be classified as per provisions in section 65A of Finance Act, 1994 - it cannot be considered that transportation is for the purpose of loading and unloading but loading and unloading is for transportation. Any person dealing with the situation perceives the services as one for transportation and not for loading and unloading- against Revenue. Revenue detected short payment of tax for incidental charges received by them for the years 2005-06 and 2006-07 (Rs. 317324) - Held that:- There is a statement by the Appellants in Appeal Memorandum about a payment of Rs. 10,08,225 on 02-06-06 on this count - the matter appears to be arising out of wrong reconciliation - remit the matter to the adjudicating authority to quantify dues if any on this account and pass an order which brings out the issue clearly. - ST/294/2008 - ST/A/123/2012-CUS - Dated:- 22-2-2012 - D.N. PANDA, MATHEW JOHN, JJ. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) Loading at Bacheli (5) Weighment at Bacheli to avoid shortage To minimum possible extent 1. Yield (For feed size 10-150 mm lumps 5-18 mm Lump 68% and 28% 0.5 mm fines (Oversize and undersize will be maximum 5%) (4% assumed to be ground and other losses) 2. From Bacheli to Jagdalpur Rail transport, indent and freight to be arranged by you Rs. 200/- PMT 3. At Jagdalpur - Rake unloading, Loading into truck and transport to HIL and unloading Rs. 90/- per ton (any demurrage would be to our account) 4A. Lump crushing charges For 5-18 mm size Rs. 100/- per ton 28% fines will be returned and remaining 4% will be adjusted against moisture, handling and ground losses OR 4B Fines will be retained by HIL without any crushing charges. 4C Government levies like service tax would be extra. 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts through TRC series of invoices and they should have paid service tax for the above service. On this count an amount of Rs. 44,03,673/- was found to be not paid. 5. Further Revenue was of the view that the appellants could not have taken Cenvat credit of tax paid on services of unloading, loading and transportation to bring the goods to their plant and on this count Rs. 15,97,450/- was to be denied as Cenvat credit and corresponding amount was recoverable from appellants. 6. Further Revenue detected short payment of tax for incidental charges received by them to the extent of Rs. 9,92,721/- for the years 2005-06 (Rs. 6,75,397) and 2006-07 (Rs. 317324). 7. A Show cause Notice issued on the above three counts has been adjudicated by the impugned order confirming tax demand for Rs. 53,96,394/- along with interest. Further Cenvat credit of service tax amounting to Rs. 15,97,450/- taken on tax paid on unloading, loading and transportation was disallowed and demanded along with interest. Further penalty of Rs. 69,93,844/-was imposed under section 78 of the Finance Act,1994. Aggrieved by the order the Appellants have filed this appeal. 8. The Appellants submit that their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants are recovering the cost of the services rendered by them from their clients through these TRC series invoice and from this fact and from the terms of contract it is very clear that the amounts received was for services rendered to the clients and not services rendered to the appellants. So the Appellants should have paid tax on value including such amounts recovered. Further he argues that since it was a service rendered to their customers it was not input service for them to avail Cenvat credit. 12. Further the AR draws our attention to the definition of cargo handling service. In the definition what is excluded is "mere transportation". This is not a case of mere transportation but a case involving unloading from railway wagons, loading on trucks and transportation and hence the service should be classified as cargo handling service. 13. In the case of tax short paid on incidental charges the appellants did not raise any serious argument and they had in fact paid tax amount of Rs. 8,78,636- during investigation itself. However in the Appeal Memorandum it is argued that payments made are not properly reconciled. 14. After hearing both the sides and perusing the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue under the head applicable for crushing and grading. However the Revenue's argument that the services rendered by the sub-contractors were not input services is not maintainable once the above decision is taken. So the correct view is that the services of the sub-contractors were provided to the appellants and the appellants were eligible to take Cenvat credit of tax paid on it subject to the condition that the appellants pay tax on the full value of service including the amount accounted as reimbursement for transportation. 18. The next issue is the classification of service rendered by the transport contractors whether it is Transportation of Goods or Cargo Handling Service. We are not in agreement with the argument that the service involved is cargo handling service and not transportation service. When there is composite service the service should be classified as per provisions in section 65A of Finance Act, 1994. As per this section the sub-clause which gives the most specific description is to be adopted. If this criterion fails then the service is to be classified as the service which gives the essential character of the service. This composite service has elements fit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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