TMI Blog2017 (9) TMI 1064X X X X Extracts X X X X X X X X Extracts X X X X ..... et operator with minimum of 50 trucks, though equipment and experience for mechanized loading in railway wagons is also one of the criteria - the pre-qualification makes it clear that the contract is essentially for transportation and incidentally for loading of transported cargo into the railway wagons. The service agreement now under consideration is essentially for transportation of lime stone over a long distance, by trucks. The appellant is not paid any consideration for loading which is automatically done from the hoppers. They are involved in stacking and loading of lime stone in the railway yard after transportation - the proposal of the Revenue to demand service tax on the whole of consideration received by the appellant treatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties for the period 16.08.2002 to 17.09.2004, resulted in the present impugned order. The ld. Consultant appearing for the appellant submitted that they are not a cargo handling agency. The pre-qualification criteria for the tender itself makes it very clear that the tenderer should have minimum two years experience in the work of transportation and mechanized loading in the railway wagon; should own/maintain a fleet of minimum 50 trucks; should have minimum turnover of ₹ 4 crores; own/maintain 5 numbers of front-end loaders etc. The appellant is a registered cooperative society and also registered with the department under the category of good transport agency services . 3. The ld. Consultant extensively referred to the contents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in nature. Clearly, the appellants are also engaged in stacking and further loading of the cargo in the railway wagons. This is not disputed. In such situation, the original authority is correct in holding the appellant to tax liability under cargo handling service . It is further submitted that the responsibility of the appellant gets discharged only after completion of loading of limestone in the railway wagons. When the cargo was unloaded in the railway yard at Jaisalmer, the transportation activity is completed. Normally, no transport agency undertakes a further loading into another transport mode. The ld. AR also relied on certain case laws in support of findings recorded in the impugned order. 6. We have heard both the sides and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basically a fleet operator with minimum of 50 trucks, though equipment and experience for mechanized loading in railway wagons is also one of the criteria. We note that read together the pre-qualification makes it clear that the contract is essentially for transportation and incidentally for loading of transported cargo into the railway wagons. 8. The agreement itself provides for detailed break-up of rates for each of the four activities to be undertaken by the appellant. As already submitted by the appellant, that out of agreed payment of ₹ 73/- PMT for a composite cycle of activities, ₹ 68/- is towards transportation of limestone over a distance of 112 kms, ₹ 0.50 is for stacking, ₹ 4.50 is for mechanized loadi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Service. We are not in agreement with the argument that the service involved is cargo handling service and not transportation service. When there is composite service, the service should be classified as per provisions in Section 65A of Finance Act, 1994. As per this section the sub-clause which gives the most specific description is to be adopted. If this criterion fails then the service is to be classified as the service which gives the essential character of the service. The composite service has elements fitting into the definitions of both the services. So, recourses is to be taken to section 65A(2)(b). Here it cannot be considered that transportation is for the purpose of loading and unloading but the contrary is true. That is loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted earlier in this order. The service agreement now under consideration is essentially for transportation of lime stone over a long distance, by trucks. The appellant is not paid any consideration for loading which is automatically done from the hoppers. They are involved in stacking and loading of lime stone in the railway yard after transportation. We find that the proposal of the Revenue to demand service tax on the whole of consideration received by the appellant treating the same is cargo handling service is not legally sustainable. 12. In view of above discussion and analysis, we find the impugned order is without merit and accordingly set-aside the same. The appeal is allowed. (Operative part of the order pronounced in the op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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