TMI Blog2016 (4) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... is clear that in case of coal handlers listed as A(i) to A(v) in first para there is no contrary view. All the orders are aligned to the views expressed by the Hon'ble High Court of Orissa order dated 25.2.2011. Therefore, the matters relating to the coal handlers, not being contrary, do not appear to have been remanded to the CESTAT. Coal Packers - Classification - under packaging services and Cargo Handling Service - Engaged in Palletisation or packing of goods for the purpose of ease of transport - Held that:- in case of Packers the decision of CESTAT (Bangalore) has been upheld by Hon High Court of AP and therefore merged with it. It would appear that the correct facts were not presented before the Hon Supreme Court. The contrary views in the cases listed before the Hon Supreme Court was only between the decision of Hon High Court of AP and that of Kolkata bench Tribunal, and that too only in case of Packers. There are no two decision of CESTAT which were before the Hon Supreme Court, and which were contrary to each other. In these circumstances the contesting parties may seek guidance from the Hon Supreme Court, as to the scope of the issues for resolution by the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agarwal 7386-7387 of 2011 HC of Orissa 6 Shreem Coal Carriers 1687 of 2015 CESTAT (Mumbai) 2015 (37) STR 1067 7 SSV Coal Carriers 1697 of 2015 CESTAT (Mumbai) The preliminary issue raised by revenue relates to the scope of the remand. The revenue has argued and submitted in their written submissions as follows 4. The order of Hon'ble Supreme Court wherein it has been observed that needless of mention the larger bench of the CESTAT shall decide all the issue involved needs to be viewed in light of the above. All the issues would refer to all the issues involved in the contrary decisions of this Tribunal and not the issues which have already been settled. Reliance in this regard is also placed on the observations of the Hon'ble Supreme Court in the said para wherein the Hon'ble Court had directed that We, accordingly, set aside both the orders and remit the cases back to the CESTAT with a request to the president, CESTAT, to constitute a larger bench for deciding the is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of Tribunal and of Hon High Court of AP, taking contrary stand. The disputes involved are examined in detail in following paras. 2. In case of Coal handlers appeal was filed against following orders a) Hon'ble High Court order in case of Coal carriers dated 25/02/2011 b) Tribunal order in case of Shreem Coal carriers 2015 (37) STR 1067 Both these orders are examined below with a view to see if there were any contrary views. First of all the two orders under appeal are not of CESTAT but one is of Hon High Court and another of CESTAT. 2.1 i) Hon'ble High Court order dated 25/02/2011 In case of parties listed in first as A(i) A(ii) and A(iii) the order was passed by Hon'ble High Court of Orissa. Hon'ble High Court order dated 25/02/2011 as reported in 2011(24) STR 395 observed as follows 23. On the basis of the said terms and conditions of the contract between the parties it has come to the conclusion by the Assessing Officer and held that activity undertaken by the appellant squarely falls within the cargo handling service and service tax is payable on the gross amount received by the noticee. Further, it is held that it has viola ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed as under: 15. Combined reading of provisions of section 65(105)(zr) and 65(23) of the Act throw light 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 exceptions/exclusions: viz.,: (1) handling of export cargo or passenger baggage and (2) mere transportation of goods. These two activities are beyond the scope of such class from taxation for rationale behind them. Accordingly, cargo handling services provided in respect of domestic cargo only are liable to tax. Event of levy arises when service relating to or in relation to handling of cargo is provided by a cargo handling agency irrespective of mode of transport used for movement of such cargo. Precisely, following activities which are contemplated to be taxed as cargo handling service are: (1) By express terms: (A) Loading, unloading, packing or unpacking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants had no intention to cause evasion of revenue but at the infancy stage of implementation of law there appears to have confusion as to taxability. Accordingly, we waive the penalties levied under different Section of the law on all the appellants by the impugned orders. But we make it clear that when tax was leviable and realizable, the appellants shall be required to make payment of interest on the tax. Interest shall be calculated as per law in all cases and realised . 2.1 ii) Tribunal order in case of Shreem Coal carriers 2015 (37) S.T.R. 1067 In case of parties listed in first para as A(iv) and A(v) the order was passed by Tribunal relying upon the decision of Hon'ble High Court of Orissa dated 25/02/2011 as reported in 2011 (24) STR-395. The tribunal in its order (reported as 2015 (37) STR 1067 (Tri-Mumbai)) has observed as under 5. We have carefully considered the submissions made by both the sides. 5.1 Section 65 (23) of the Finance Act, 1994 defines the Cargo Handling Service as under: Cargo handling service means loading, unloading, packing or unpacking of cargo and includes cargo handling services provided for freight in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivity of loading and unloading of coal in the mining area would come within the purview of Cargo Handling Service . The Hon'ble High Court of Orissa in the case of Coal Carriers (supra) held that loading of coal into the railway wagons would fall within the definition of Cargo Handling Service . The Hon'ble High Court also observed that as per the dictionary meaning the goods which are being carried or transported by any means of transportation and has become load of the trucks would also come within the meaning of cargo and therefore, the activity was squarely covered by Cargo Handling Service as defined in law. In this view of the matter, we are of the view that the activity undertaken by the appellant squarely falls within the scope of Cargo Handling Service as defined in law. 5.3 .. 5.4 As regards the invocation of extended period for confirmation of demand, we notice that there was a lot of confusion regarding the scope of Cargo Handling Service and there were conflicting decisions by the Tribunal and others in this regard. Therefore, the appellant could have entertained a bonafide belief that the activity undertaken by him would not come within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court, one of Hon High Court of AP and another of Tribunal (Kolkata). i) In case of ITW INDIA LTD. The Kolkata bench of tribunal passed an order as reported in 2007 (8) STR 490 (Tri-Kolkata). In the said order the tribunal observed as under: 2. The Learned advocate appearing for the Appellants states that the Appellants are engaged in the business of material handling equipment and parts thereof and they also carry out activities like unitisation, strapping, packeting or packing, the customers' goods at their premises or sites. For the activities carried on by the Appellants in the premises of M/s. Tata Refractories Ltd., Belpahar they have been asked to take Service Tax Registration and under the impugned orders demand of Service Tax has been confirmed against them and penalty has been imposed holding that the Appellants have provided Cargo Handling Service . _____ 5. After considering the submissions made from both the sides we find that according to the definition in section 65(21) of the Finance Act, 1994 the 'cargo handling service' means- i) Loading, unloading, packing or unpacking of cargo, and includes- ii) Cargo handling services provided for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court has considered un-loading of the coal by the wagon tippling system and thereafter the coal was transported by conveyor belt and not by any other mean of transportation. Hence, the ratio of the decision based on such consideration will apply to a similar case where the goods are transported by conveyor belt etc. and not by employing any other means of transportation such as truck, rail etc.. There is no finding by the Hon'ble High Court on the fact that coal was initially moved by rail. The cited decision is entirely based on a consideration of the question that subsequent movement of the coal from the wagons to the Thermal Power Stations was by means other than employing one of the usual means of transportation such as ship, rail, aircraft or truck. Hence, we are unable to accept the prayer by the Learned Advocate that the ratio of the cited decision should be applied to the case of the Appellants where the goods have been packed for subsequent transportation by truck/rail. The Learned Advocate fairly admits that the decision of the Hon'ble High Court of Rajasthan is silent in regard to the initial movement of the coal by rail. 5.4 We find that the expression & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed an order in respect of five appeals. The said order was upheld by Hon High Court of AP. IN Tribunal three appeals were filed by ITW INDIA LTD. in respect of demand of service tax in respect of services provided. One appeal was filed by ITW INDIA LTD. against remand of refund claim and another was filed by tribunal in its order reported in = 2009 (14) S.T.R. 826 (Tri-Bang) observed as follows: 3. The Revenue proceeded against the appellants by issue of show cause notices. According to the Revenue, the activities undertaken by the appellants, M/s. ITW India Ltd., namely packaging unitization, strapping, loading of coils, seals, attending improper straps and seal feed and offline strapping are for transportation by any means of transport. The activity carried out by the assessee not only includes packaging but also loading of coils which comes under the definition of 'cargo handling service' only. Thus the activity carried out by the assessee falls under the category of 'cargo handling service' only and not under the category of 'packaging service'. Therefore the main issue to be decided in all these appeals is the category of taxable service for which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... June 2005, the appellant is paying service tax under the packaging service. The packaging activity is generally understood as the activity of bundling, bounding, making parcels putting merchandise products into containers etc. for commercial handling. ___ 17. On a very careful consideration of the entire issue, we find that the activity rendered by the appellants more appropriately can be described as packaging activity, even in terms of the activities which are described in the show cause notices. The appellant is actually doing the strapping of various steel items in the production line in the Steel Companies. It is also seen that they are a part of the manufacturing process and the value of the packaging is included in the assessable value of the goods and Excise duty is paid on the entire value taking into account the charges incurred by the manufactures for the package. Therefore once the Excise duty is paid on the charges, again the service tax cannot be levied. That apart, on going through the definition of the cargo handling service, it is very clear that the impugned items cannot be considered as cargo. Moreover after packaging the appellant does not undertake the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y careful consideration of the entire issue, we find that the party was doing 'packaging' activity. This is brought out in the Order-in-Appeal. The packaging activity came under the service tax net only with effect from 16th June 2005 . Therefore the Commissioner (Appeal) was correct in holding the view that prior to that date whatever tax was paid under any of the category is liable to be refunded. In any case, the appellants have also shown evidence to the effect that the tax paid by them under the category of 'Business Auxiliary Services' was not passed on to their customers. In these circumstances, there is no need for further verification of the unjust enrichment aspect during the relevant period. We agree with the learned Commissioner (Appeals) that the appellants are not at all liable to pay any service tax under any other category because only with effect from 16th June 2005, they are liable to pay service tax under the category of 'packaging service'. In view of this position, we allow the party's appeal and reject the Revenue's appeal. Thus in the case involving ITW India Ltd., there are two contrary decisions, one of Kolkata bench of Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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