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2019 (4) TMI 1418 - CESTAT KOLKATAClassification of service - Cargo Handling Service or otherwise? - activity of transportation of the minerals from the mine’s pithead to the railway siding (part of the mine) and loading the same into railway wagons - HELD THAT:- To call an activity to be cargo handling service there should be an activity of movement of cargo from one place to another place without any internal movement within the mining area. Neither handling service outside the mining area is evident from the adjudication order nor destination outside such area has come to record. Therefore, when the factual evidence demonstrates movement of the excavated minerals within the mining area from one place to another, that operation cannot be called as cargo handling service. The agreement itself provides for detailed break-up of rates for each of the four activities to be undertaken by the appellant. A plain reading of these rate schedules will show that the essence of the contract is for transportation of mineral within the mining area. The Board vide circular dated 29-2-2008 clarified the application of Section 65A while classifying a composite service - 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. Thus, the demand of ₹ 80,62,565/- in respect of cargo handling service in the first appeal is set aside. Demand of ₹ 20,96,816/- on site formation services - HELD THAT:- The activity of making of 100 meters dia holes with contractors own equipment is not one relating to site formation - definition of “Site formation and clearance, excavation and earthmoving and demolition” as defined under Section 65(97 a) of Finance Act, 1994 as amended covers Drilling, boring and core extraction services for construction, geophysical, geological or similar purposes; but in the instant case, the appellants activity is limited to supply of the machine and men. The entire job is undertaken by TISCO people and there is no liability on the part of the appellant - the appeal on this count also succeeds. Penalty - HELD THAT:- There was no suppression or mis-statement by the appellants regarding the nature of activities undertaken by the appellants and hence the imposition of penalty on them is not at all justified - appeal allowed. Appeal disposed off.
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