TMI Blog2023 (4) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant did not involve any packing or unpacking. From the work order referred in the impugned matter it is also clear that Appellant were concerned only with the movement of material within the factory area of M/s Essar Steel. In the present matter appellant merely shifts goods within the plant area and were not carrying any cargo. The Tribunal has dealt with the identical issue in case of SAINIK MINING ALLIED SERVICES LTD. VERSUS COMMR. OF C. EX., CUS. ST [ 2007 (11) TMI 90 - CESTAT, KOLKATA] related to transportation of coal within a colliery area where a demand under Cargo Handling Service was made against the contractors. The Tribunal in this case held that the dominant activities undertaken being primarily within a mine, the said activity is not taxable as Cargo Handling Service. In the present case too, the service provided for the authorized operation by the appellant to the SEZ based service recipient, demand of service tax is not sustainable - Appeal allowed. - Service Tax Appeal No.10644 of 2013 - Final Order No. A/10795/2023 - Dated:- 3-4-2023 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU MEMBER (TECHNICAL) Shri Vishal Agarwal Ms. Dimple Gohi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said services could not be taxed under the head of Cargo Handling Services as the same did not involve transportation of goods for the purpose of freight by truck, aircraft or ship. 3.1 He also submits that after referring to the terms of a work order placed on the Appellant by M/s Essar Steel Ltd., Learned Commissioner concluded that the services rendered by the Appellant were in nature of logistic management. Assuming without admitting the finding to be correct, and the services rendered by the Appellant were that of managing logistics, the same would have been taxable under the head of Business Support Services. The Learned Commissioner having come to a conclusion that the services rendered were other than cargo handling services, ought to have dropped the show cause notice. 3.2 He further submits that in terms of the different work orders placed by M/s Essar Steel Ltd., appellant was engaged for the purpose of moving of inputs/ raw materials from the jetty of M/s ESL, which is part of the factory ground plan to the production area, movement of semi-finished goods from one plant to other plant and for movement of the finished goods from the production area to the jetty f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urs, also in respect of the services rendered to the SEZ unit of M/s ESL. 3.7 He further submits that Section 26(1)(e) of the SEZ Act specifically provides the every developer and entrepreneur would be entitled for exemption from Service Tax under Chapter V of the Finance Act , 1994 on taxable service provided to a developer or entrepreneur to carry on the operation in the SEZ. Section 51 of the SEZ Act provides that the provision of the SEZ Act will have overriding effect over anything inconsistent in any other Act including in the Notification or the Rules made thereunder. Further, Rule 31 of the SEZ Rules provides that exemption from payment of Service tax on taxable services rendered to a developer or a unit, by any service provider, shall be available for authorized operations in an SEZ. Since the alleged services of Cargo Handling Services had been rendered by it to the SEZ unit to carry on its authorized operations, it was eligible for exemption from payment of Service tax. 3.8 Without prejudice, he also submits that even if one was to assume, as has been held in the impugned order, that exemption in terms of SEZ Act , has been operationalized by Notification No. 4/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner in the impugned order, is that it has not disclosed the receipts of consideration towards the services in question in its ST-3 returns and has therefore, willfully and deliberately suppressed the facts with intention to evade duty. However appellant s belief that the amount received by it was not taxable and for this reason it did not show the consideration received by it in the ST-3 returns. 04. Shri Prabhat Rameshwaram, learned Additional Commissioner (AR) appearing on behalf of revenue opposed the contention of the Learned Counsel and reiterated the findings of impugned order. He also placed reliance on the following decisions:- GANGADHAR BULK MOVERS PVT. LTD. VS. CCE, NAGPUR -2012 (27)STR 258 (TRI. MUM) GAJANAND AGARWAL VS. CCE BBSR 2009(13)STR 138 (TRI. KOL) VISHAL TRADERS VS. CCE, JAIPUR I- 2010(19)STR 509 (TRI. DEL) SINGH BROTHERS VS. CCE, INDORE 2009(14)STR 552 (TRI. DEL) DEPUTY COMMISSIONER VS. CENTRAL EXCISE VS. SUSHIL COMPANY CCE, NEW DELHI VS. HARI CHAND SHRI GOPAL -2010(260) ELT 3 (SC) CCE, VISAKHAPATNAM VS. MEHTA CO. 2011(264) ELT 481 (SC) CCE, SURAT I VS. NEMINATH FABRICS P LTD. - 2010(256)ELT 369 (GUJ) 05. We hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used by them for receipts of raw materials and also clearances of their finished goods. This captive jetty is a part of the factory of M/s Essar Steel Ltd. Any movement of goods from Jetty to production area and vice-versa is therefore, a movement within the plant. Appellant shift the raw materials/goods from the receipt area i.e Jetty to the production floor, from one production floor to another production floor and from production floor to the dispatch area. Clearly this activity of appellant cannot be considered as Cargo Handling Service. Appellant s services only involved movement of goods within the factory premises of M/s Essar Steel Ltd. Further the activity undertaken by the Appellant did not involve any packing or unpacking. From the work order referred in the impugned matter it is also clear that Appellant were concerned only with the movement of material within the factory area of M/s Essar Steel. In the present matter appellant merely shifts goods within the plant area and were not carrying any cargo. 5.2 We find that the Tribunal has dealt with the identical issue in case of Sainik Mining Allied Services Ltd. v. CCE - 2008 (9) S.T.R. 531 related to transportation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et in the present case. As such, the impugned order confirming the service tax liability is without merit, hence the same is not sustainable. 5.4 We also find that in the present matter demand of service tax of Rs. 1,89,55,549/- also confirmed by the Learned Commissioner in respect of the disputed services provided by the Appellant to SEZ unit on the ground that the exemption under Notification No. 4/2004-ST dated 31.03.2004 is in respect of services which are consumed within the SEZ only and not services which are partly consumed in SEZ. Majority work of inter-carting is initiated outside the SEZ area or ends outside the limits of SEZ, thus services provided to SEZ are not consumed within the SEZ. The services provided to SEZ are exempt if the same are consumed within the limits of SEZ. The issue whether the appellant are eligible for the service tax exemption under the Notification No. 4/2004 for the services rendered to SEZ unit and whether service tax payable or not on services provided to SEZ. For better appreciation, the relevant part of the notification is reproduced as under :- .the Central Govt. being satisfied that it is necessary in the public interest so to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.T., dated 3-3-2009. In such notification also, there is no restriction that the service has to be consumed within the geographical location of the SEZ. When the notification previous as well as after does not put forward any such restriction, the contention of the department that the exemption would be eligible only for the services which are consumed within the geographical area of the SEZ is without legal basis. 5.7 We further find that on identical dispute the Tribunal in the matter of Norasia Container Line Vs. Commissioner of C.Ex., New Delhi 2011 (23) S.T.R. 295 (Tri. - Del.) also held as under: We have considered the submissions from both the sides. The notification No. 4/2004 uses expression for consumption of services within such Special Economic Zone , but at the same time also uses the expression taxable services provided to a unit of the SEZ . Both the expressions are required to be read harmoniously. In any case, the subsequently enacted SEZ Act further provides in Section 26 as under : Section 26. Exemptions, drawbacks and concessions to every Developer and entrepreneur. - (1) Subject to the provisions of sub-section (2), every Develope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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