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TMI Blog2009 (4) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... scope of the new category of service. It was clarified that service tax was chargeable under "cargo handling service" on post-mining activities such as loading, unloading and similar activities though done using mechanical systems. Though TEPL is registered as a provider of service under the category of "mining of mineral, oil, gas" effective from 1.6.2007, a notice was issued to them proposing to recover service tax on the activity of loading and transportation of limestone and rejects mentioned above. Adjudicating the Show Cause Notice the Commissioner demanded an amount of Rs.1,20,26,027/- towards service tax and education cess as well as applicable interest under the relevant provisions of the Finance Act, 1994 (the Act). He also imposed on TEPL penalty of Rs.200/- per day/2% of tax in arrears per month, whichever was higher, for the period 18.4.2006 till the service tax demanded was paid. A penalty equal to the total service tax demanded was imposed under Section 78 and an amount of Rs.1,000/- imposed under Section 77 of the Act. 2. In the appeal before us TEPL has challenged the impugned order on various grounds. Relying on the definition of "cargo handling service" under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x for bona fide belief of the appellants that tax was not payable could not be demanded invoking larger period. 3. We have heard both sides. We find that the impugned activity is loading and transport of limestone and rejects from the mine head to the premises were the mined limestone is crushed and that the entire activities take place in the mining area. In CCE Vs. Pyrites, Phosphates and Chemicals Limited -1983 (12) ELT 537 the Tribunal made the following observations:- "Further we agree with the contention of the respondents to the effect that the premises where the crushing of pyrites is being carried on will fall within the definition of Section 2(1)(j) of the Mines Act, 1952 since the premises are adjacent to the mine and on these premises crushing is carried on for getting low grade pyrites prepared for sale. Thus, this would squarely fall within the ambit of Item (X) of Section 2(1)(j) of the Mines Act, 1952." In Chowgule & Co. (P) Limited Vs. Union of India - 1993 (67) ELT 34 (SC) the apex Court held that the process of mining comes to an end when ore is extracted from the mines, washed, screened and crushed in the crushing plant and stacked at the mining site. We fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome under the purview of cargo handing service. The dominant activities undertaken by the appellants under the contract in question are primarily the movement of coal within mining area and transfer of coal from the coal face to the tippers, if at all, includes loading and unloading which are merely incidental. Cargo in commercial parlance has a definite connotation which is carried as freight in a ship, plane, rail or truck and the activities undertaken by the appellants in terms of the contracts on behalf of M/s. MCL to move coal within mining area do not fall in the category of cargo handling service. Moreover, the activities undertaken are principally the transportation of coal within mining area and hence, the gross amounts received for the same cannot be taxed under the category of cargo handling service. We have, therefore, no hesitation in our mind to hold that the definition of cargo handling service under the Finance Act, 1994, does not include the kind of activities undertaken by the appellants and hence the same are not chargeable to service tax. We also find that there was no suppression or mis-statement by the appellants regarding the nature of activities undertaken b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents from M/s. SAIL cannot be charged to Service Tax under the said heading of "cargo handling services". Hence, we uphold the impugned Order-in-Appeal, but for the different reasons recorded by us above, and we dismiss the Departmental Appeal. The Cross Objection filed by the respondents also stands disposed off. The Tribunal found that the impugned activity in that case comprised excavation, transportation and feeding of iron ores to the crusher plant even though those activities incidentally involved some loading and unloading the same could not be covered under the category of cargo handling service. The above authorities also held that "cargo", in commercial parlance had a definite connotation; cargo was carried as freight in a ship, plane, train or truck. The material moved by the appellants was not cargo as commercially understood. 6. CBEC clarified "cargo handling service" vide letter F. No.B11/1/2002-TRU dated 1.8.2002 which is reproduced below. This clarification suggests that agencies such as Container Corporation of India, Airport Authority of India, Inland Container Depot, Container Freight Stations alone carry out cargo handling service and activity of a person ..... X X X X Extracts X X X X X X X X Extracts X X X X
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