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TMI Blog2018 (8) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... tory or into the factory they meet the definition of cargo and the activities of handling it is cargo handling service - the activity under taken by the appellant/assessee must be classified as cargo handling service. Extended period of limitation - Held that:- It is not in dispute that this is a classification issue and the Department had issued the show cause notice in 2008 whereas, the assessee had been paying service tax under various other headings namely Manpower supply and Business Auxiliary Service from 2005 onwards. Thus, the nature of activity undertaken by the assessee is within the knowledge of the Department from 2005-2006 onwards - there is no ground to invoke extended period of limitation in this case. Penalty - Held that:- As it is the question of interpretation of classification of services, where the Department appears to have changed its opinion, no penalties under Section, 76, 77 78 are imposable. The penalties are therefore set aside and the demand along with interest within the normal period of limitation is upheld - The demand for extended period is set aside - appeal allowed in part. - Appeal No. ST/316 & 349/2009 - Final Order No. A/30825-3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Services as they involved loading or unloading of reams/reels/bundles/pallets in trailer/truck in the godown. It was alleged that the Cargo Handling Service is leviable to service tax from 16.08.2002 and a demand of service tax of ₹ 56,54,529/- (including cess paying the differential service tax payable) along with interest was made and it was proposed to impose penalties under Section 76, 77 78. Order-in-Original No. 12/2008-ST-ADJN-HYD-III-Commnr. dated 20.11.2008 (impugned Order-in-Original) was passed by the Commissioner after following due process of law, confirming the classification of this service under Cargo Handling Services but reducing tax liability taking the amounts which were received as cum tax value. The Learned Commissionr also confirmed the interest and imposed penalties under Section 76, 77 78. The appellant filed an appeal against this order challenging the confirmation of the demand. The Department also filed an appeal No. ST/316/2009 on the following grounds: i) Extending the benefit of cum tax value for the period prior to 10.09.2004 is not correct because the concept of cum tax value introducing in 2004 by amending Section 67 of the Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the point of view of the M/s ITC Ltd., and also from the point of view of the Department and therefore no intention to evade service tax can be alleged on them. There were inadvertent delays and technical lapses on part of the accountant of the assessee in filing figures and tax payment in relation to Manpower Supply and Business Auxiliary Service. Appellants had paid interest for delayed payments. Immediately upon noticing some discrepancy and pending verification of accounts, the appellants had voluntarily paid tax of ₹ 5,70,023/- on 10.03.2008. The Manpower Supply service also includes that the appellant is not merely supplying workers but actually has the responsibility to supervise and execute the work of loading, unloading etc. iii) the Deputy Commissioner of Labour, Government of Andhra Pradesh has registered them for manpower provision. No penalty can be imposed on them under Section 76 78. Appellant had acted under the bonafide belief and no penalty is imposable. He relied on the following case laws: a) M/s SCRAP Material Handling Co. [2009 TIOL-588-CESTATDelhi] in which, the principal Bench of CESTAT held that mere transportation of goods for purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on both sides. The following issues needs to be decided: i) whether the services rendered by the appellant in this case is cargo handling services or not. ii) whether the extended period of limitation cannot be invoked and demand raised accordingly. iii) whether the amount paid by M/s ITC Ltd., by the appellant should be considered as cum tax amount or not. iv)whether interest is leviable on the service tax, if it is payable. iv) whether penalties under Section 76, 77 78 are imposable upon the assessee. We proceed to deal with the first issue. The cargo handling services has been defined in the Service Tax Act as follows: (23) cargo handling service means loading, unloading, packing or unpacking of cargo and includes cargo handling services provided for freight in special containers or for non-containerised freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport and cargo handing service incidental to freight, but does not include handling of export cargo or passenger baggage or mere transportation of goods. The term cargo is not defined in Finance Act, 1994. Therefore, we take the dicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classified the services appropriately. It is also almost after three years, the show cause notice was issued. We also find strong force in the arguments made by the appellant that the service recipient M/s ITC Ltd., was liable to reimburse the service tax to the appellant as per para 4 of the contract if it was applicable. Therefore, after paying service tax the service recipient M/s ITC Ltd., would have been able to claim credit of the service tax so paid. Thus, the entire exercise is Revenue Neutral from the point of view of the appellant, M/s ITC Ltd., service recipient as well as from the point of view of the Revenue. Thus, we find that there is no ground to invoke extended period of limitation in this case. Thirdly, the benefit of taking the amount received by the appellant as cum duty account is not correct because explanation 2 of Section 67 was not applicable during the part of the relevant period. Further, as per the contract itself, the amount received by the appellant is excluding the service tax amount. However, as we have held that the extended period of limitation is not applicable this decision may become irrelevant. Fourthly, as it is the question of interpretation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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