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2023 (4) TMI 664 - AT - Service TaxCENVAT Credit of Service Tax paid - exempt services or not - hire charges for the use of Fork Lift and Cranes for providing cargo handling services in the Inland Container Depot, which were hired from M/s. St. John Heavy Equipment Ltd., for loading, unloading and transporting both export and import cargos - export of services or not - exempt service or not - Circular No. 868/6/2008 dated 09.05.2008 - whether the Revenue is justified in demanding Service Tax at the rate of 8/6% of the value of services rendered and received in respect of export of cargo by treating the handling of export cargo as an exempted service? HELD THAT:- It is clear from the definition under Rule 2(e) ibid., as was applicable for the periods under dispute, that an exempted service is one on which no Service Tax is leviable. That is to say, but for the fact that it is exempted, otherwise the tax is leviable. Further, no service could be treated as an exempted service unless it is specified so under Rule 2(e) ibid - The definition of “cargo handling service” per Section 65 (23) ibid. clearly excludes the handling of export cargo and hence, the lis between the appellant and the Revenue here is whether the ‘exclusion’ tantamounts to ‘exemption’ and consequently, whether the same could be brought within the definition under Rule 2(e) ibid. The services which are ‘excluded’ cannot be given the colour of ‘exemption’ just to fit it somewhere so that a benefit flowing from the statute to a taxpayer is denied. The words “does not include” in the definition of cargo handling service takes the service very much out of the purview of taxability, thereby touching upon the jurisdiction of the taxing authority and hence, the same, at no stretch of imagination, could be held or equated with an exempted service. Hence, the services rendered by the appellant in this case, insofar as the same related to the handling of export cargo, is excluded from taxability and thus, the same cannot be brought as ‘exempted’ under Rule 2(e) ibid. Once it is held as ‘excluded’, there is also no scope to consider the same as an ‘exempted’ service just for the purposes of Rule 6 of the CENVAT Credit Rules, 2004. The Revenue is not justified in demanding the Service Tax by treating the handling of export cargo as an exempted service - Appeal allowed.
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