Cce, Bhopal vs M/S Jagat Enterprises

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

Service Tax Appeal No. 521 of 2009 and C.O. 158 of 2010

(Arising out of order-in-appeal No. 209/BPL/2009 dated 11.05.2009 passed by the Commissioner (Appeals) Customs, Central Excise and Service Tax, Bhopal).

CCE, Bhopal Appellant

Vs.

M/s Jagat Enterprises Respondent

Appearance:

Shri Ranjan Khanna, DR for the Revenue

None for the Assessee- Respondent.

Coram: Honble Mr. Justice G. Raghuram, President

Honble Mr. B. Ravichandran, Member (Technical)

Final Order Nos. 53234 / 2015

Per: B. Ravichandran:

This appeal by Revenue is against Order-in-appeal dated 11.05.2009 of Commissioner (Appeals), Bhopal. The respondent are engaged in providing services of loading/ unloading of cement into wagon and trucks for M/s Maihar Cement and they are paying service tax under the category of manpower recruitment services w.e.f. 16.06.2005. Revenue felt that the respondent is liable to pay service tax under the category of Cargo Handling Services for the period 16.08.2002 to 15.06.2005. Proceedings were initiated against the respondent resulted in order-in-original dated 16.12.2008 which confirmed the service tax demand under Cargo Handling Services for the aforesaid period and imposed penalty under Sections 76, 77 and 78 of the Finance Act, 1994.

2. On an appeal, the ld. Commissioner (Appeals) vide the impugned order set-aside the order-in-original and allowed the appeal of the respondent. Aggrieved by this order the Revenue is before us in appeal.

3. Ld. AR Shri Ranjan Khanna submitted that the ld. Commissioner (Appeals) erred in holding that the respondent are not providing Cargo Handling Services during the impugned period. Though the cement plant for which the respondent is providing services is fully automated for provide stacking and arranging the cement bags, the manual labour supplied by the respondent is required. The condition in the contract that no hook shall be used in handling the bag is indicative that the loading, unloading works involves manual labour. Further, he pleaded that they received fixed amount PMT of cement as agreed upon for payment. The fact that the respondent is registered as a labour contractor is of no consequence to decide the classification of service.

4. No one appeared on behalf of the respondent. However, they have filed Cross-objection in which they stated that the labourer supplied by them were deployed for managing various points in the mechanised process of packing and loading of cement. The cement factory has installed machines for packing or repacking and loading of these bags into tucks or wagon is done through a conveyor belt. The labourers do help in proper arranging of the bags but they are not involved in loading or unloading of the cargo as such. As far as wages based on PMT, the respondent pleaded that the same is based on Cement Wage Board circular which is mandatorily to be followed. The respondent also relied on the Tribunal decision in the case of J. J. Enterprises vs. CCE, Raipur- 2006 (3) STR 655 (Tri.) and K. K. Appachan vs., CCE  2007 (7) STR 230 (Tri.). These decisions were relied upon by the Commissioner (Appeals) As such the respondent pleaded that the appeal by the Revenue is without merit.

5. We have heard the ld. AR and examined appeal records alongwith Cross-objection filed by the respondent. The short point for decision is the classification of services rendered by the respondent and their liability during the impugned period. It is seen that the respondent were registered with the department and were paying service tax for the same service under Manpower Supply Agency w.e.f. 16.06.2005. The Revenues case is prior to that date, they should be charged service tax under Cargo Handling Services. We have examined the impugned order. The following observations in para 5 of the said order is crucial to the finding of the case:

Maihar Cement is having a completely automatic plant, from the stage of production of cement up to its delivery. Packed Cement bags automatically move on conveyer belt for loading into trucks or wagons. Labourers are required to keep watch on production, packing & delivery of cement and arranging the bags systematically in trucks and wagons. They are not required to carry or load the cement manually in truck/ wagons. The bags are simply pushed for storage. These type of activities are not covered under the activity of Cargo Handling Services, as held by the Tribunal in the matter of M/s J & J Enterprises vs. CCE  2006 (3) STR 655 (Tri. Del.).

6. Ld. Commissioner (Appeals) also observed that he had seen, through CD provided by the respondent, the actual process of packing loading in the cement factory. He noted that all these activities are done automatically by machinery and conveyor owned by the cement manufacturer. The manpower supplied by the respondent is for mainly supervising and supplementing the mechanised packing and loading. We are in agreement with the reasoning and findings of the ld. Commissioner (Appeals).

7. Further, we notice that the Revenue has not given any reason as to why the impugned services were classifiable under Cargo Handling Services before 16.06.2005 and as manpower recruitment from 16.06.2005. The admitted fact is that the services remain same and there is no reason for different service tax treatment for different period. Considering the detailed discussions and findings in the impugned order we find no reason to interfere with the same. The Revenue has not succeeded in making any sustainable ground to overturn the said order. Accordingly, the appeal filed by the Revenue is dismissed. Cross objection filed by the respondent is also disposed of.

(Justice G. Raghuram)

President

(B. Ravichandran)

Member (Technical)

Pant