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M/s Rungta Projects Ltd. Versus Commissioner of Central Excise& Service Tax, Allahabad

Classification of services - Cargo Handling Service - Site Formation Services - CBEC through Circular No. 104/07/2008-ST dated 06.08.2008 - Held that: - in the contracts executed by the appellant loading and unloading was incidental and transportation was the essential feature for the contract. The transportation of coal was mostly within the mining area. For the purpose of transportation and loading unloading was undertaken - in the present case transportation of coal was main activity and load .....

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erefore, the service which was proposed by Revenue to be covered by Site Formation Service was not eligible to be called Site Formation Service - appeal allowed - decided in favor of appellant. - Appeal Nos. ST/1779/2011 & ST/51756/2014-CU[DB] - Final Order Nos. 70975-70976/2017 - Dated:- 17-8-2017 - Mr. Anil Choudhary, Member (Judicial) And Mr. Anil G. Shakkarwar, Member (Technical) Shri B.L. Narsimhan (Advocate) for Appellant Shri Mohd. Altaf (Assistant Commissioner) AR for Respondent ORDER Pe .....

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ral Excise and Service Tax, Allahabad. 2. Brief facts of the case are that the appellants were engaged in executing projects and operations or implementations of projects and were also engaged in the activity of transportation and handling of coal. The appellant had entered into contracts for executing works orders received by them from their clients such as M/s Northern Coalfields Ltd. (NCL), M/s National Thermal Power Corporation Ltd. (NTPC), M/s Kanoria Chemicals Industries Ltd. (KCL) and M/s .....

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by drilling, blasting, earth work, excavation etc. Revenue conducted investigation against the appellant and during the investigation various statements were recorded. Statements of Shri Rajesh Gupta, Authorized Signatory and Shri A.J. Wilson, Manager (Projects) were recorded on various occasions and during the investigation various work orders issued by the clients to the appellant were also examined. On the basis of statements and work orders, it appeared to Revenue that appellant were engaged .....

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te has been fixed and that breaking of bigger blocks of coal into smaller blocks or reducing them to smaller sizes amounted to packing. It is stated in the said show cause notice that the work assigned to the appellant was breaking of coal into sizes smaller than 200 mm was like preparation/packing of the cargo so that it can become suitable for loading and subsequently, can be transported. It was further contended that the job of loading/lifting of the coal through tippers and loaders was also .....

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nt of main sump, site cleaning from main sump, land development of pond ash, removing overburden dump with little blasting, excavation of fly ash from ash dykes and therefore, the said activity was site formation and clearance, excavation and earth moving and demolition service . Therefore, through the said show cause notice 18.03.2008 which covered period from 01.10.2002 to 28.02.2008, the appellant was called upon to show cause as to why, an amount of ₹ 8,05,10,268/- + Education Cess of .....

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nt. Further there were proposals for imposition of penalty. The said demand included demand on account of Cargo handling Service to the tune of ₹ 7,92,54,380/- and on account of Site Formation Service to the tune of ₹ 29,32,467/-. Subsequently another show cause notice dated 11.10.2010 was issued covering a period from 01.03.2008 to 31.03.2010 alleging that the appellant were required to pay service tax of ₹ 7,93,86,401/- towards Cargo handling Service. The said two show cause .....

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coal and then loading the same into trucks and its transportation and they contended that loading of coal into tipping trucks by pay loaders do not come under the definition of Cargo handling Service as coal in such case is not cargo. They further submitted that in respect of services rendered to M/s KCIL the service was related to transportation of coal from Bina Project to their work at Renukoot and transportation of coal from Gevra mines to their works and movement of coal by road from the S .....

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er taken by them was transportation of coal from different sites to their units as per the work orders and therefore, their activity cannot be classified under Cargo handling Service but it is a simple case of transportation of goods. They further contended that CBEC Circular No. B.11/1/2002-TRU reported in 2002 (144) ELT T-6 to T-24 has clarified at Para 3.2 that mere transportation of goods is not covered in the category of cargo handling and is therefore not liable to service tax . They furth .....

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e includes drilling, boring, etc. for construction, geological or similar process and work being done by them was within area of mines and that was for mining by the service recipients and it was not for the purpose of construction and therefore the activity undertaken by them did not qualify to be defined as site preparation service. The Original Authority did not appreciate the submissions made before him and confirmed the demand and imposed equal penalty through Order-in-Original dated 30.08. .....

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2010 to March, 2011 on same grounds contending that the services provided by appellant were cargo handling service and raised the demand of ₹ 2,44,79,555/-. Further another show cause notice dated 18.12.2012 was issued covering a period from April, 2011 to March, 2012 making allegations of providing cargo handling service and demand of ₹ 1,84,15,850/- was raised. The above stated two show cause notices dated 08.05.2012 and 18.12.2012 were adjudicated through Order-in-Original No. (S .....

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he said activity is liable to service tax under GTA service and the services recipient is the person liable to pay service tax and persons liable to pay service tax have already discharged their service tax liability therefore the demand in the present proceedings is double taxation. In the contract with NCL appellant was mainly responsible for transportation of coal and the responsibility of the appellant was transportation of specific quantity of coal per day as agreed upon by the parties and .....

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tax under Cargo Handling Service and that the definition of Cargo Handling Service excludes mere transportation of goods. They contended that cargo handling service includes loading, unloading, packing or unpacking of cargo and mere transportation of goods was excluded from cargo handling service and Revenue has not submitted any evidence that they were involved in packing of cargo and that the contention in the said show cause notice that breaking of coal amounts to packing is not sustainable. .....

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e was treated by Revenue as packing and such contention is not tenable in law. He has further taken order through the clarification issued by CBEC through Circular No. 104/07/2008-ST dated 06.08.2008 wherein at Para 3 CBEC have clarified that the guiding principle for classification is to indentify the essential characters of the activity and the clarification reads as follows:- Such intermediate and ancillary services may include services like loading/unloading, packing/unpacking, transshipment .....

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service provided by them was covered by the definition of GTA. Further he has relied on following case laws (i) CCE, Ranchi v/s Modi Construction Company reported at 2011 (23) STR 6 (Jhar.), (ii) CCE v/s Manoj Kumar reported at 2015 (40) STR 35 (All), (iii) Signode India Ltd. v/s CCE 2017-VIL-11-SC-ST. He further contended that Hon ble Allahabad High Court in the case of CCE v/s Manoj Kumar as well as Hon ble High Court of Jharkhand in the matter of CCE, Ranchi v/s Modi Construction Company hav .....

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s been issued by invoking incidental provision and the same is barred by limitation. He has further contended that show cause notices issued on similar contention for subsequent period were dropped by Commissioner and Assistant Commissioner through orders dated 24.01.2017 and 07.03.2017 respectively and the said orders have reached finality and the same view of Revenue should be made applicable to the present appeals. 6. Heard the learned AR for Revenue who has supported the impugned Orders-in-O .....

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