TaxTMI 
TaxTMI 
2011 (11) TMI 358
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....4,11,440/-under Section 78 The issue involved in these Appeals is common, therefore, they are taken up for disposal, together. 3. Briefly stated facts of the case are that the Appellants are engaged in loading/unloading of coal on a contract with M/s. Western Coalfields (here-in-after referred as WCL). The loading of coal is done on tippers by hiring pay-loaders and by using manual labour and the tippers transport coal from one place within the mining area to another place and unload it there. The officers of DGCEI working on intelligence found that the appellants were providing service under the category of 'Cargo Handling Service', however, they did not obtain the Service Tax Registration and did not discharge the Service Tax liability on the amounts received from their clients. Proceedings were initiated against the Appellants and accordingly, show-cause notices were issued demanding Service Tax by invoking the extended period of time under the provisions of Section 73(1) of the Finance Act, 1994 on the ground that the Appellants had willfully suppressed the fact of loading of coal undertaken by it at the coal-mines of WCL with intent to evade payment of Service Tax. The penal....
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....on of 'Cargo Handling Service'; vide Finance Act, 2008 with effect from 16.05.2008. 4.4 The contention is that the definition is not to be taken as destroying the essential meaning of the term defined. The definition is merely employing apt and readily intelligible words. Thus, the term, 'cargo handling agency' service cannot be construed in a manner so as to extend it beyond the natural import and legislative intent behind the definition. 4.5 The contention is that the Appellants are ex-servicemen companies. They are incorporated pursuant to a Memorandum of Understanding (MoU) entered into between the Ministry of Energy and Ministry of Defence in 1979. The shares of the Appellants are held by War Widows and Disabled Soldiers. The aim of the MoU was to provide union free captive transport organizations to various coal companies under the Department of Energy and at the same time, provide a source of income for ex-servicemen who are registered with the Director General of Rehabilitation, Ministry of Defence, New Delhi. Thus, it is clear that the Appellants, by no stretch of imagination, are understood as 'cargo handling agency' in ordinary or commercial parlance. The Appellants do....
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....e against the Appellants. 5.1 As regards the contention of the Appellant that there is a composite contract with WCL both for loading/unloading and transportation and the contention of the Appellant, that the contract is basically one of the transportation of coal within mining area, and loading and unloading are only incidental to transportation, the ld. Jt.CDR submitted that the contention is not factually correct. In this regard, he has drawn our attention to page 13 of the Appeal of M/s. Gangadharan Bulk Movers Pvt. Ltd., from which it is revealed that the work order dated 24.02.2007 consists of two jobs. The first job is for loading and unloading of coal for which they are paid @7.65 PMT, and the second part of the contract is that of transportation of the coal from one place to another for which they are paid Rs. 64.69 PMT and had it been a composite order for mere transportation of goods, there would be no need for showing the two jobs separately with separate rates. In the present case, the demand is confined to the first part of the work order viz. loading & unloading of coal. There is no demand in respect of transportation charges as ST on the same is paid by WCL, as the....
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.... any person, by a cargo handling agency in relation to cargo handling services;" (c) In view of declaration of law as above, meaning of the term "cargo handling service" was provided by Legislature in Section 65(23) of the Act, which reads as under : 65(23) "cargo handling service" means loading, unloading, packing or unpacking of cargo and includes cargo handling services provided for freight in special containers or for non-containerised freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport and cargo handling service incidental to freight, but does not include handling of export cargo or passenger baggage or mere transportation of goods. A conjoint reading of provisions of section 65(105)(zr) and 65(23) of the Act show that cargo handling agencies are taxable entities. Cargo handling service provided by such entities attract the levy of service tax. Section 65(23) has a wide amplitude and has brought all like nature activities to its fold expressly and by inclusion of such like nature activities under the class 'cargo handling services'. However classification of service under this category is subject to two except....
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....loaded. The Appellants have contended that there is a composite contract with WCL both for loading/unloading and transportation and that the contract is basically for transportation of coal within the mine area and loading and unloading are only incidental to transportation, is factually incorrect. From the copy of Work Order dated 24.02.2007 it is revealed that the work order consists of two jobs, the first job for loading and unloading of coal, for which they are paid Rs. 7.65 PMT and the second part of the contract is that of transportation of coal from one place to another, for which they paid Rs. 64.69 PMT. In case it would have been a composite order, there would have been no need for showing two jobs separately with separate rates. 6.4 As already discussed, the issue relates to job for loading and unloading. The loading of coal is done on tippers by hiring pay-loaders and the tippers transport the coal from one place within the mining area to another place and unload it there. As regard the contention of the Appellants that no manual labour is involved in loading and unloading, the contention is not factually correct and is contrary to terms and conditions of work order. Mo....
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....for transportation outside the mine are post-mining activities and are chargeable to service tax under the relevant taxable services i.e. 'Cargo Handling Service" and "Goods Transport by Road". However, in case, such transportation is undertaken by mechanical systems, such as conveyor belt system, ropeway system, merry-go-round systems etc., and the same is not transported by road, no service tax would be chargeable, Service tax is, however, chargeable under cargo handling service, even if the loading, unloading and similar activities are done using mechanical systems. 6.7 In view of the above discussion we find no reason to interfere with the ld. commissioner's orders, holding the service rendered by the Appellants as 'cargo handling service'. 6.8 As regards limitation of time we find that the issue raised in this appeal is one of interpretation of law. This view is strengthened by the circulars issued by CBEC, from time to time, in this regard. At the infancy stage of implementation of law there appears to have been confusion as to taxability. In these circumstances, the invocation of larger period of limitation is not sustainable. Further, in view of, no positive act, on the p....