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TMI Blog2023 (4) TMI 1325X X X X Extracts X X X X X X X X Extracts X X X X ..... fies that if the activity is only of transportation, then the said activity cannot be called as cargo handling service. The activities undertaken by the appellants under the disputed contract and discussed by the Learned Commissioner in impugned order primarily involves transportation of goods via Road/ Rail/ Sea. The activities incidentally even if involve some loading and unloading of goods while carrying out the principal activities under the contracts, such incidental activities of loading and unloading undertaken by the appellant cannot give the entire contracted activities the character of cargo handling services‟. As such, the activities undertaken by the Appellant are primarily in the nature of transportation. Also, this Tribunal in COMMISSIONER OF SERVICE TAX, RANCHI VERSUS M/S HEC LTD. [ 2018 (3) TMI 19 - CESTAT KOLKATA ] on a similar issue has held that ' The activities carried out by the assessee-respondents are primarily transportation of goods and loading unloading, etc., which are incidental to the transportation of goods. Such activities cannot be covered within the services of Cargo Handling‟ as has been rightly held by the lower authorities.' D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad to M/s Essar Steel Ltd. various depots /stock points/ job-workers‟ premises and accordingly charged composite rate per MT basis depending on various destination. Thus, it was alleged that looking to the scope of works, the aforesaid services appear to be classifiable under the category of Cargo Handling Service and accordingly service tax should have been discharged on entire amounts charged by them towards aforesaid service. However till 14.11.2009 Appellant had raised tax invoices bifurcating composite rate into different components like (a) transport transportation component (b) port services components in case of transportation by sea or cargo handling services component in case of transportation by rail and (C) rail freight or sea freight component in respect of handling transportation of goods by multi-modes namely raod-rail-road, sea-road etc, and by this way they had not discharges service tax liability on entire amount of services charged at composite rate, in as much as Appellant had paid service tax only in respect of (b) component under respective head of service. In case of (a) component, Appellant had classified amount of such component under transportation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, Appellant rendered only Transportation services and in respect of these services, it cannot be called upon to discharge service tax under the head Cargo Handling Services. The Appellant has not rendered any handling services whatsoever insofar while discharging transportation service. The definition of Cargo Handling Service specifically excludes mere transportation of goods from the ambit of Cargo Handling Services. Therefore, the service of mere transportation, as provided in the present case cannot be categorized under the head of Cargo Handling Service. Since Transportation is the main element of the services provided by the Appellant, the handling of the cargo, if any, was incidental to the transportation service, consequently the said activity cannot be taxed under the head Cargo Handling Service. 3.2 He further submits that appellant had initially transported goods only by road and thereafter from April 2006 onwards, it informed M/s Essar Steel Ltd. and It‟s customer that it would use multiple modes of transportation such as road, rail, sea or a combination of the same whichever worked out to be the most efficient. It is relevant to point out here that the mandates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loading, unloading, handling, etc., which was rendered by the appellant and that service that on the transportation services was rightly so discharged by M/s Essar Steel Ltd. In paras 17.09 and 17.10. it is recorded by the Learned Commissioner that the Appellant had not discharged service tax on the sea freight component or the rail freight component. Thereafter in para 17.14., 17,31, 17.8, the Learned Commissioner has concluded that the service of handling and transportation of goods by sea and rail were not transportation service but were classifiable under the head of Cargo Handling Services. Despite not accepting the case as made out in the show cause notice, the impugned order still confirms the entire service tax demanded in the notice which is clearly untenable. 3.4 He argued that impugned order proceeded on the erroneous premise that Appellant was also rendering handling service while transporting the goods by sea and rail. This finding of the Learned Commissioner overlook the fact that such a handling if any, was on the Appellants own account and not for and on behalf of M/s ESL/ Customer of M/s ESL. In so far as M/s ESL/ Customer of M/s ESL are concerned they had only en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the Bill indicates separately the amount charged for cargo handling and the amount charged for transportation, then service tax is leviable only on the cargo handling charges. 3.8 He further submits that in para 17.21. of the impugned order, Learned Commissioner has referred to the view taken by the Appellant in its letter dated 18.11.2009 where it proposed to classify the multi modal transport activity in the category of Cargo Handling Service after 14.11.2009 and held that if that was the Appellant s view, it could not classify the different activities differently even for the earlier period. However this proposed to classify the services rendered by it post 15.11.2009 differently in view of its revised role of logistic management including arranging suitable modes of transport by road/sea and by rail along with other incidental activities pertaining to loading, unloading post clearance, handling, planning and arrangement etc. under the category of Cargo Handling Service as one composite activity to avoid multiple accounting and billing. The above proposal was made due to the change in the scope of services after 15.11.2009 which were different from those rendered earlier i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any of the provisions with intent to evade payment of Service tax. None of these ingredients are available in the present case nor has the department produced any evidence to substantiate the same. Appellant in a bona fide manner believed that not service tax was payable on the portion attributable to sea freight and rail freight and therefore it is not the case where the assessee deliberately did not pay Service tax. Further Service recipient were also eligible to avail credit, and therefore the entire dispute is revenue neutral and as such the extended period could not have been invoked. The jurisdictional Service tax authority had approved the return filed by the Appellant from time to time and in fact even the investigating officer of the DGCEI who searched the premises of the Appellant on 13.04.2007 did not find anything amiss in the practice followed by them at that stage and therefore, did not issue any Notice. Similarly in June 2009, August 2010 and March 2011 also audits were conducted but the audit team, did not find any infirmity in the practice followed by the Appellant. When the appellant proposed in its letter dated 18.11.2009 to classify the different activity under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice.Regarding the Appellant s liability to service tax under the category of Cargo Handling Services it is seen that the Learned Commissioner in para 17.6 of the impugned order itself admitted the facts that Appellant have been awarded the contract by M/s ESL for movement of goods from their various premises to their various depots as well as job- workers premises by road, rail and sea modes and accordingly appellant charged composite rate per MT basis depending on various destination. The said facts itself prove that the essence of the contract is transportation of goods from one place to other place via road/rail/sea modes. We note that a similar issue came up for decision by the Tribunal in Hira Industries Ltd, 2012 (4) TMI 430, CESTAT ND = 2012 (28) S.T.R. 23 (Tri.). Tribunal observed as below : 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 Financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f freight charged per MT depending upon various destinations as fixed by contract under the category of Transportation of Goods by Road services and also indicating the person liable to pay services tax in such cases as M/s ESL, with computation of Service tax on abated value. The above finding of Learned Commissioner itself shows that the Appellant s activity is not covered under the Cargo Handling Service. From the above observation we hold that the services rendered by the appellant did not qualify to the definition as Cargo Handling Service. 5.3 We also find that Learned Commissioner in the present matter also confirmed the service tax demand related to the sea freight and rail freight components under the Cargo Handling Service , which is prima-facie wrong. As discussed above, the activity of Appellant was transportation of goods and not cargo handling service. Further on Rail Freight and Sea Freight service tax cannot be demanded under the Cargo Handling Service. We also agree with arguments of Learned Counsel that Service tax came to be levied on both the services, namely transport of goods by Sea and Transport of goods by rail, only w.e.f. from 01.09.2009, therefore under a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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