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2018 (2) TMI 939 - AT - Service TaxClassification of services - cargo handling services or transportation services? - appellants have argued that loading and unloading done is a kind of self-service necessary to undertake the service of transportation undertaken by them. Held that: - Loading in the riverbed is not a simple activity of loading as the sand has to be mined using an excavator or other machine. The location of riverbed is not fixed. The loading in the stockyard is, however, simple activity of loading. The contract describes it to be a contract for excavation from riverbed, transportation from riverbed to warehouse and transportation from warehouse to bunker. Rates have been quoted for both on per MT basis but the rate changes with the distance between the origin and destination. In these circumstances it is to be examined if the activity is primarily an activity of transportation or of cargo handling. There is no doubt that the activity of removing/excavating sand from the riverbed amounts to mining activity. However for the period in dispute mining was not a taxable service. In any case, the activity of movement of sand from warehouse to bunker cannot be considered as mining activity. From the terms of the contract it is apparent that the prime purpose of the contract is to bring the sand from the riverbed/ warehouse to the bunker. The loading or unloading are merely necessary requirements to complete activity of movement of the sand. The contract is primarily intended for the purpose of transportation of sand and the activity of loading/unloading is merely incidental. No tax under the head of Cargo Handling Service can be levied in these circumstances. Appeal allowed - decided in favor of appellant.
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