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TMI Blog2008 (6) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... hed products from one place to another, provided by the appellant, falls under cargo handling service and taxable under Finance Act, 1994 (hereinafter referred to as the Act ) and for failure to comply with the provisions of that Act was also liable to penalties, the appellant has come in Appeal before this forum against that order. The impugned order has imposed following levies : ( 1) Service Tax of Rs. 6,40,220 and Education Cess of Rs. 3,779, aggregating to Rs. 6,43,999 was leviable under section 68 read along with sub-section 2 of section 73 of the Finance Act, 1994. This levy has followed by interest under section 75 of the said Act. (2) Up to 28-2-2005, service tax was required to be deposited by 25th of the month following the calendar month during which value of the taxable services were received. Thereafter from 1-3-2005 onwards, this was modified to 5th of the month. Failure to make deposit of tax, penalty equal to Rs. 100 for everyday of failure was imposed under section 76. Subject to the conditions that penalty amount shall not exceed Rs. 6,43,999. (3) Penalty of Rs. 1,000 was imposed under section 77 for non-filing of the prescribed returns and for no r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans of transport. 1.4 Similarly the Chairman of the appellant company in his statement stated as under : (a) The bills are normally raised on monthly basis. However, sometimes one bill covers more than one month. The bills are prepared by clerical staff and are signed by one of Directors. (b) Since April, 2002, the bills are bifurcated into two heads (1) transportation charges and (ii) loading charges. This has been done as per orders of BSIL. (c) He denied that this bifurcation have been done in keeping view of Service Tax liability if it arises at a latter stage. (d) He also denied that his work comes under the purview of Service Tax. They have taken expert opinion in this regard. 1.5 Recorded statement of Chief Executive of BSIL revealed as under:- (a) M/s. Modi Construction Company are working as contractor for BSIL for the last ten years. They are doing in plant transportation of raw material, waste material and finished goods, maintenance of BSIL Railway siding and maintenance of signalling and telecommunication. (b) The bifurcation on lump sump account in to loading and transportation charges have been done for accounting purposes only. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities below made an error to hold that the internal movement of material inside the plant was 'cargo handling service' which is contrary to law and also contrary to various decisions of this Bench. The activity was mainly material shifting. Learned first Appellate Authority upheld the order of adjudication by a cryptic order without any application of mind for which the appellant was rendered injustice. Admitted nature of activity being shifting of material from one place to the other part of the factory, that was not at all a 'cargo handling service'. Both the Authorities misconceived both on fact as well as law without testing nature of activity on the touchstone of law. When there was no liability, invoking of a longer period was unwarranted and no penalty was also leviable. There was no suppression of fact at all and the appellant provided all materials to the inspecting Authority as well as cooperated in the course of proceeding. The appellant was under bona fide belief that there shall not be liability under the Act for the nature of activity carried out by it. In view of no reasoned and speaking order passed, adjudication was bad in law. 2.2 It was sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the meaning of cargo handling service in an appeal much earlier to this i.e., in the case of ITW India Ltd v. Commissioner of C. Ex. Cus . [2008] 12 STT 249 (Kol - CESTAT). Section 65(105)(zr) of the Act declared cargo handhng service to be taxable service with effect from 16-8-2002 and that section so far as may be relevant reads as under 65(105) 'taxable service' means any service provided or to be provided, (zr) to any person, by a cargo handling agency in relation to cargo handling services; In view of declaration of law as above, meaning of the term cargo handling service' was provided by Legislature in section 65(23) of the Act, which reads as under (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 handling service incidental to freight, but does not include handling of export cargo or passenger baggage or mere transportation of goods; 4.4 The word service' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scheme of levy by section 65(23) of the Act. Thus, it can be said that loading, unloading, packing or unpacking of cargo and handling of cargo for freight in special containers or non-containerized freight and service provided by container freight terminal or other freight terminal for all modes of transport are subject-matter of taxation under the class cargo handling service . That apart, any activity incidental to freight of cargo are also liable to be taxed under such class. Mode of transport is irrelevant for incidence of levy once the service provided meets the test of handling of cargo in the manner envisaged by law. It is also not necessary that the cargo should only be meant for transport either by vessel in ships or aircrafts. 5. Looking to the admitted facts of the case and finding of learned Adjudicating Authority which remained uncontroverted throughout, applying aforesaid interpretation of the law, it may be held that the scope of activity carried out by the appellant, inside the plant does not call for taxation under the class 'cargo handling service' following decision of this Bench in the case of Sainik Mining Allied Services Ltd. (supra) . ..... X X X X Extracts X X X X X X X X Extracts X X X X
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