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TMI Blog2024 (9) TMI 926X X X X Extracts X X X X X X X X Extracts X X X X ..... ant as Cargo Handling Agent service . In the impugned order, the adjudicating authority classified the services under the category of Cargo Handling Agent Service on his own. As the issue has already been settled that the transportation of goods outside the mines, do not qualify under Cargo Handling Service . Therefore, the demand of Rs.14,92,41,316/- has been rightly dropped by the adjudicating authority and the demand of Rs.13,77,14,657/- is also not sustainable under the Cargo Handling Service , which is only transportation of goods agency service. Mining Service - HELD THAT:- The activity undertaken by the assessee, is the transportation of coal up to the distance of 7 km, which is incidental loading and the same is taxable under Transport of Goods by Road Service as held by the Hon ble Supreme Court in the case of Commissioner of Central Excise and Service Tax, Raipur Vs. Singh Transporters [ 2017 (7) TMI 494 - SUPREME COURT ], wherein it has been held that the transportation of coal from pit head to railway siding inside the mines is taxable as Goods Transport Agency Services . Circular No.334/1/2008-TRU dated 29.02.2008, has clarified that the method of charging or invoicing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts Ltd, work order dated 29-06-2009 awarded by M/s A.K. Transport and work order dated 25-09-2009 awarded by M/s Sainik Mining & Allied Services Ltd for "Transport of Coal upto the distance of 11km to a place outside the mines with incidental loading". 2.3 The Assessee further executed contracts for "Transportation of Ash" generated from Mejia Thermal Power Station (MTPS) and Durgapur Thermal Power Station (DTPS) of Damodar Valley Corporation (DVC) and NTDS SAIL Power Company Ltd., Ranchi. Under the said contracts, the Assessee was obliged to load the Ash and transport the same to specified location upto a distance of 25 km/31 km (approx.) where it is automatically unloaded. The said activity of "Transportation of Ash" was sought to be classified under the category of "Cargo Handling Service" in the Show Cause Notice however, the Ld. Commissioner by the impugned Order has dropped service tax demand of Rs.14,92,41,316/- accepting contention of the Assessee that the said contract is essentially for "Transportation of Ash". Against said dropping of demand department is in Appeal. WORK ORDERS TAXED UNDER "MINING SERVICE". 2.4 The Assessee executed Work Orders for "Transportation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. Addl. Director, DGCEI, Kolkata classifying the said work orders under (i) Cargo Handling Services and (ii) Mining Services and alleging inter alia that the Assessee has not paid Service Tax of Rs.25,11,40,162/- during the period from 2008-09 to 2012-13 under the said two heads. Further, under Annexure - C2 of SCN Service Tax of Rs.3,58,15,811/- is demanded on the differential value of services as per Profit & Loss A/c vis-à-vis ST-3 returns (without specifying the category of services under which tax is demanded). 2.11 The Assessee in their exhaustive reply to SCN vide letter dated 18-11-2015 vehemently disputed and denied the allegations. The Assessee challenged the Show Cause Notice on grounds of merit, vagueness and also on limitation. Service Tax Appeal No.75485/2016 (Assessee's Appeal) 3. The ld.Counsel for the assessee, submits that under the impugned Order, the Ld. Commissioner while confirming the demand under Mining Service and Cargo Handling Service has held in the following lines- "11.13 Similarly exclusive coal transportation is also considered as part of mining service where the providers transports the coal within the mining area to the washery or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said contract is essentially for "transportation" of clean broken coal upto distance of 26 - 27 K.M./28 - 29 K.M and not providing any Mining Service. 3.7 He submits that in Circular No.334/1/2008-TRU dated 29/2/2008, it is clarified that method of charging or invoicing does not in itself determine whether the service is a single service or multiple service, Single Price normally suggest single supply though not decisive. The real nature and substance of the transaction and not merely the form of the transaction should be the guiding factor for deciding the classification. Classification must be determined based on essential feature or dominant element of transaction. 3.8 The principle of classification set out under Section 65A/Section 66F of the Finance Act, 1994 in respect of composite services is classification of the entire contract under the service which is predominant or principal service. The principle of classification of goods on the basis predominance is accepted by the Hon'ble Supreme Court in the case of CCE Vs. Champdany Industries Ltd. reported in (2009) 241 ELT 481 (SC) (Para 24). The said principle would apply to service tax also in view of specific provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the said service tax is demanded @ 10.30 %/12.36%. 3.15 It is submitted that the differential relates to work contract service on which tax is paid @ 4.12% on which now tax is demanded @ 10.30%/12.36%. 3.16 Further, he submits that the tax @ 10.30%/12.36% is also demanded on the value of free supply of HSD (Diesel). 3.17 In the case of Maa Kalika Transport Pvt. Ltd. Vs. CCGST reported in 2023 (79) GSTL 263 (Tri.-Kolkata) [Para 19], it is held that demand cannot be raised on the basis of data from Income Tax Department without any corroborative evidence that the value is received in connection with provision of taxable service. Similar views have been expressed in the case of Go Bindas Entertainment Pvt. Vs. CST reported in 2019 (27) GSTL 397 (Tri.-All.). Service Tax Appeal No.75775/2016 (Revenue's Appeal) 4. In respect of the Revenue's Appeal, he submits that the demand of Service Tax of Rs.14,92,11,316/- on activities of "Transportation of Ash" under the categories of "Cargo Handling Service" is rightly dropped by Ld. Commissioner. 4.1 It is submitted that the contracts in hand are essentially for transportation of Ash upto a distance of 25 K.M./31 K.M. with incidental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date of filing ST-3 Date of filing ST- 3 Months upto 17-07-2014 (Date of SCN) Status 2008- 2009 Apr,08 to Sep,08 Oct,08 to Mar,09 25-10- 2008 25-04- 2009 17-02- 2010 17-02- 2010 4 years 5 months 4 years 5 months Time Barred Time Barred 2009- 2010 Apr,09 to Sep,09 Oct,09 to Mar,10 25-10- 2009 25-04- 2010 15-12- 2010 15-12- 2010 3 years 6 months 3 years 6 months Time Barred Time Barred 2010- 2011 Apr,10 to Sep,10 Oct,10 to Mar,11 25-10- 2010 25-04- 2011 21-07- 2011 21-07- 2011 2 years 11 months 2 years 11 months Time Barred Time Barred 2011- 2012 Apr,11 to Sep,11 Oct,11 to Mar,12 25-10- 2011 25-04- 2012 08-01- 2011 21-01- 2013 3 years 6 months 1 years 5 months Time Barred within normal period 4.11 He further submits that prior to the instant SCN, they were issued with another SCN dated 13-02-2008 by the Ld. Addl. Director DGCEI, Kolkata for the immediately preceding period i.e. 16-08-2002 to 31-03-2007, invoking extended period of limitation classifying similar "Transportation contract (with incidental loading) within the Mines" as taxable under the category of "Cargo Handling Service" whereas in the instant case the similar contracts are sought to be ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s rendered "Transportation Service" as claimed by them or "Cargo Handling Service" as claimed by the department? (ii) Whether the service rendered are essentially "Transportation Service" naturally bundled or the individual services in the contract can be vivisected to demand service tax? (iii) Whether the demand of service tax under "Cargo Handling Service" has gone beyond the scope of the Notice? (iv) Whether the demand can be made only based on the data received from Income-tax department, without any corroborating evidence? (v) Whether suppression of fact involved in this case or not, to demand service tax by invoking extended period? Consequently, whether penalties imposed in the impugned order are sustainable or not? 12. From the terms and conditions of the contracts mentioned in para 2 above, we observe that the contracts are basically meant for transportation of coal. However, the adjudicating authority has observed that the services would fall under the category of "Cargo Handling Service" on the basis of his findings in paras 13.2 and 13.3 of the impugned order, which are reproduced below : "13.2 On scrutiny of the scope of work specified under W/O-SRPL/Trans/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be termed as transportation job/GTA." 13. We observe that the Ld. Commissioner has arrived at the conclusion that the Appellant has provided multiple services in the form of loading, unloading, handling, providing trucks, obtaining delivery orders obtaining mining permission etc. and hence the services provided are not mere transportation. We observe that the contract is a composite contract primarily for the purpose of transportation of coal beyond 180 to 200 KM. The activities like loading, unloading, obtaining delivery orders etc. are incidental or ancillary to the transportation service. The contract has not provided any separate charges for these activities. The composite contract cannot be vivisected to arrive at the value of service for each activity artificially. 14. We observe that the Board has issued Circular No. 104/07/2008-S.T., dated 6-8-2008, wherein it has been clarified as under : "3. Issue : GTA provides service to a person in relation to transportation of goods by road in a goods carriage. The service provided is a single composite service which may include various intermediary and ancillary services such as loading/unloading, packing/unpacking, transshipme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilar lines. The said clarifications issued by Board are reproduced below : "3. Goods Transport Agency (GTA) has been defined to mean any person who provides service to a person in relation to transport of goods by road and issues consignment note, by whatever name called. The service provided is a composite service which may include various ancillary services such as loading/unloading, packing/unpacking, transshipment, temporary storage etc., which are provided in the course of transportation of goods by road. These ancillary services may be provided by GTA himself or may be sub-contracted by the GTA. In either case, for the service provided, GTA issues a consignment note and the invoice issued by the GTA for providing the said service includes the value of ancillary services provided in the course of transportation of goods by road. These services are not provided as independent activities but are the means for successful provision of the principal service, namely, the transportation of goods by road. 4. A single composite service need not be broken into its components and considered as constituting separate services, if it is provided as such in the ordinary course of busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort Authority of India, Inland Container Depot, Container Freight Stations etc. The relevant portion of the said circular is reproduced below :- "3. The services which are liable to tax under this category are the services provided by cargo handling agencies who undertake the activity of packing, unpacking, loading and unloading of goods meant to be transported by any means of transportation namely truck, rail, ship or aircraft. Well known examples of cargo handling service are services provided in relation to cargo handling by the Container Corporation of India, Airport Authority of India, Inland Container Depot, Container Freight Stations. This is only an illustrative list. There are several other firms that are engaged in the business of cargo handling services." 18. In the instant case, we observe that the Appellant was not providing any of the services mentioned above which fall under the category of "Cargo Handling Agent Service". Further, we observe that there was no proposal in the Notice to categorize the service rendered by the Appellant as "Cargo Handling Agent service". In the impugned order, the adjudicating authority classified the services under the category of " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o transportation of goods by road which is a single composite service. GTA also issues consignment note. The composite service may include various intermediate and ancillary services provided in relation to the principal service of the road transport of goods. Such intermediate and ancillary services may include services like loading/unloading, packing/unpacking, transshipment, temporary warehousing etc., which are provided in the course of transportation by road. These services are not provided as independent activities but are the means for successful provision of the principal service, namely, the transportation of goods by road. The contention that a single composite service should not be broken into its components and classified as separate services is a well-accepted principle of classification. As clarified earlier vide F.No. 334/4/2006-TRU, dated 28-2-2006 (para 3.2 and 3.3) [2006 (4) S.T.R. C30] and F. No. 334/1/2008-TRU, dated 29-2-2008 (para 3.2 and 3.3) [2008 (9) S.T.R. C61], a composite service, even if it consists of more than one service, should be treated as a single service based on the main or principal service and accordingly classified. While taking a view, both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see falls under the category of "Transport of Goods by Road" , not under the category of "Cargo Handling Service". Therefore, we hold that the adjudicating authority has rightly dropped the demand of Rs.14,92,41,316/- and the demand of Rs.13,77,14,657/- are not sustainable against the assessee. 10. The assessee further submits that the demand has been raised under the category of "Mining Service". The activity undertaken by the assessee, is the transportation of coal up to the distance of 7 km, which is incidental loading and the same is taxable under "Transport of Goods by Road Service" as held by the Hon'ble Supreme Court in the case of Commissioner of Central Excise and Service Tax, Raipur Vs. Singh Transporters reported in 2017 (4) GSTL 3 (SC), wherein it has been held that the transportation of coal from pit head to railway siding inside the mines is taxable as "Goods Transport Agency Services". In this case, the Hon'ble Supreme Court has held as under : "5. Though the learned Customs, Excise & Service Tax Appellate Tribunal, New Delhi ("Tribunal" for short) in answering the issue in favour of the respondent leading to the present proceedings has relied upon its earlier jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regarding the demand of service tax under 'Mining Services', the Appellant submits that the Service Tax demand has been raised by merely comparing ST-3 returns with Balance Sheet/Profit & Loss A/c without any investigation. They further submit that the activity of transportation of Coal outside the mines and also within the mines cannot be classified under the categories of Mining Services, as defined under Section 65(105)(zzzy) of the Finance Act, 1994. We also observe that he activities of the Appellant "Shifting and Feeding of Coal into the Hoppers" round the clock inside the Power Plants, were also categorized under 'Mining Service". We have perused the scope of works under all these contracts. We observe that the activity undertaken by the Appellant is mainly transportation of Coal, within the mining area and out side the mining area. The activity of transportation is most appropriately classifiable under "Goods Transport Agency Services" and the liability to pay Service Tax on the transportation service lies on the service receiver under the reverse charge mechanism. Accordingly, we hold that the transport services provided by the Appellant cannot be classifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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