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2023 (5) TMI 99 - AT - Service TaxDemand of service tax and Penalty u/s 78 of FA - classification of services - Cargo Handling Service/Business Auxiliary Service, or not - issue involved is of interpretation - HELD THAT:- The appellant are engaged in services which involve unloading of milk cans and bottle crates from various incoming vehicles, dumping milk in weighment vessel, cleaning cans, plastic crates, and bottles, putting milk pouch in crates, putting bottles/pouch in crates, cleaning or pre-pack machine and department, loading the creates in the vehicle for dispatch - the appellant is supplying labour to their clients and the charges are based on individual item of work given in the table in the work order. It is seen that all the activities are conducted within the factory premises. All the seven activities listed in the table above do not individually quality as ‘Cargo Handling Service’. The appellant in only providing labour on piece rate basis and at no stage it is the appellant who has taken the custody of goods. The goods do not become cargo as any movement of goods within the factory does not make it a cargo. It is noticed that the contracts are not in the nature of ‘Cargo Handling’ but are in the nature of labour contract on piece rate basis. Thus, classification of these services under ‘Cargo Handling Service’ cannot be sustained. Revenue has relied on the decision of SIGNODE INDIA LIMITED VERSUS COMMR. OF CEN. EXCISE & CUSTOMS-II [2017 (3) TMI 934 - SUPREME COURT]. In the said case, it has clearly been held that only packing of goods for the purpose of transport would get covered in the category of ‘Cargo Handling Service’ - In the above case, it is seen that the entire activity under taken by the appellant is a stage prior to the goods becoming cargo. Thus, the decision is not relevant for the instant case. Appeal allowed.
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