9911796707
TMI Blog2008 (6) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... ags in sugar house of M/s. BD SSK Ltd. -do- 3. Shri Mahadev Vithal Kamble STR/STC/178/2007 dated 30-10-2007 2002-03 to 2005-06 25,379/- Bailing of bags and loading and unloading of bagasse bales etc. -do- 4. Shri Ramchandra J. Shidruk STR/STC/75/2007 dated 26-10-2007 2004-05 to 2005-06 9,773/- Handling of pressmud with the help of labourers -do- 5. Shri Mahadev Shankar Chavan STR/STC/92/07 dated 26-10-2007 2005-06 4,094/- Bailing of bagasse and loading and unloading of bagasse bales etc. -do- 6. Shri Ajit Sopan Salunkhe STR/STC/168/2007 dated 3-1-2008 2005-06 to 2006/07 2,08,355/- Bagasse collection, bailing, loading and unloading and feeding for M/s. Krishna SSK Ltd. & cleaning activities -do- (Hereinafter referred as the appellants) As all the six Appeals deal with the same issue, i.e. 'cargo handling agency' service as held by the Department, all the appeals are taken together for common order. 2. The brief facts involved in all six appeals are that the all the appellants are engaged in the activities mentioned hereinabove in the sugar factories during the period indicated above. All the appellants were charged with the contravention of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mises of M/s. Balasaheb Desai SSK cannot be treated as "cargo handling agency" service since in the definition of cargo handling service itself pure transportation of goods is specifically excluded; (v) that the appellant at Sl. No. 2 states that stitching of sugar bags is part and parcel of activity which is one of the incidental and ancillary process for completion of manufacture of sugar and hence his activity is correctly treatable as "Business Auxiliary Service" with effect from 16-6-2005; (vi) that appellant at Sl. No. 3 states that the activity of bailing bagasse, loading and unloading of bales etc. with the help of labourers for Balasaheb Desai SSK Ltd. is to be treated as "supply of labour" and hence taxable with effect from 16-6-2005 under "manpower recruitment agency" service ; (vii) that the appellant at Sl. No. 4 states that the activity of handling of press-mud with the help of labourers cannot be treated as service of "cargo handling agency" since press-mud is residual waste and cannot be treated as "goods" and "goods" means any article which can ordinarily comes to market for sale as laid down by the Supreme Court in the case of Moti Laminates v. CCE [1995 (76) E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . B-11/1/2002 TRU dated 1-8-2002 vide para (15) has clarified that the activities of cargo handling agency services provided by an individual by hiring labourers is not taxable under "Cargo handling Agency" service; 4. PH was granted on 16-6-2008 at 11.00 A.M. S/Shri V.B. Gaikawad and Mukund Nyalkalkar, Advocates, duly authorized by all six appellants, appeared for PH. At the outset, they requested to take all six appeals for common proceedings, as the issue involved in all six appeals is one and the same. In addition to reiterating the submissions made in the appeal memorandums, they also relied on the decision of the Commissioner (Appeals) Pune II in the case of Shri Ashok Bhupal Patil (OIA No. PII/PAP/50/2008 dated 21-3-2008). 5. I have gone through the case records of all the six appeals including the submissions made during the PH. As the issue is very simple, the stay petitions and the main appeals are taken together for common decision. The main issue to be considered in all six appeals is that whether the nature of the activities carried out by the appellants mentioned at the opening para of this order, would fall under 'cargo handling service'. All the six case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner has not given any findings as to how the above service falls under 'cargo handling service'. Whereas the appellant contends that since he is engaged in transporting of sugar within the factory premises, and not involved in loading, unloading of goods, the service carried out by him cannot be classified under 'cargo handling service' in view of the exclusive provision contained under 'cargo handling service'. Besides, the appellant contends that without prejudice to the above, the amount received during the financial year 2005-06 was only ₹ 1,08,186/-, which is less than Rupees four lakhs and thus, the same cannot be taxed. He is correct. Firstly, mere transportation of goods is excluded from cargo handling service as per the statutory definition. Secondly, CBEC vide Circular F.No. B.11/1/2002 TRU dated 1-8-2002 vide para 3.2 to Annexure II clarified that 'mere transportation of goods is not covered in the category of cargo handling service. Thirdly, the appellant carried out transportation only inside the factory. Therefore, the above service cannot be called as cargo handling service at any point of time. Even assuming the appellant carried out some service, still ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aims that the activities of unloading of bagassse is the activity in or in relation to the manufacture of sugar and molasses and since the same is for generation of steam and thus, it is the activity during the course of manufacture and utmost it can be treated as "Business Auxiliary Service" with effect from 10-9-2004 and is fully exempted vide Notification No. 08/2005 ST dated 1-3-2005. All the three appellants further claim that as per the Board's Circular No. B-11/1/2002 TRU dated 1-8-2002, it has been clarified at para (15) that the activities i.e. 'cargo handling service' provided by an individual by hiring labourers is not taxable under 'cargo handling service'. 8.1 From the foregoing discussion, it may be seen that all the above three appellants deal with bagasse i.e. bailing of bagasse and loading, unloading of bagasse etc. Under 'cargo handling service', the word used is 'cargo' which means 'goods' carried by sea, road or air. Here the bagasse is the residual waste of sugarcane and the same was used as fuel for generation of steam. Therefore, the bagasse cannot be considered as 'cargo' so as to bring the activities of appellants under 'cargo handling service'. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect from 1-5-2006, the activities of the above three appellants would fall under "manpower recruitment & supply agency" service and not before that. As all the demands are prior to 1-5-2006 (i.e. 2005-06), there cannot be any demand from the above three appellants under "manpower recruitment & supply agency" service also. Besides, there cannot be any demand under "Business Auxiliary Services" also as claimed by the sixth appellant since the same is exempt in terms of Notification No. 08/2005 ST dated 1-3-2005. 8.3 The 6th appellant was also charged for cleaning services during the year 2006-07. However, as the amount involved is less than a lakh and his other activities namely, bagasse collection, bailing, loading, unloading and feeding would not fall either under 'cargo handling service' or 'manpower recruitment & supply agency' service, he is not liable to pay the service tax on the above small amount. 8.4 If I do not make special mention with regard to SCN issued and confirmed with equal penalty on the 5th appellant, I will not render any justice. This appellant, as per the SCN dated 3-11-2006, received ₹ 40,142/- during financial year 2005-06. From 1-4-2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are many interpretations possible, there cannot be allegation of mala fide intention on the part of the appellants. Thus all the above case laws lend support to the appellants. Consequently, there cannot be any liability for penalty. Therefore, invoking extended period also fails. 11. All the appellants also claim that the Department, while raising the demands, the principle 'cum-tax price' is not followed. To support their contention, they relied on the decisions in the case of Gem Star Enterprises Pvt. Ltd. v. CCE - 2007 (7) S.T.R. 342 (Tri. Bang.) and Foster Wheeler Energy Ltd. v. CCE [2007 (7) 443 (Tribunal) = 2007 (81) RLT 893 (CESTAT, Ahmd.)]. I can certainly term that the above approach is very absurd. It is a settled law that when fresh demand is raised, the principle of 'cum-tax price' has to be followed. Thus, this is another omission noticed like the adjudicating authority did not extend the SSI exemption limit. In view of the above, I agree with the contentions of the appellants and the above principle was not followed by the adjudicating authority. 12. From the above discussions, all the appellants have not only succeeded on merits, but also on time bar asp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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