Central Excise & Service Tax-Bhopal vs Jai Stambh Chowk, Satna (M.P.)

[Arising out of Order-in-appeal no. 341/BPL/2009 dated 02.09.2009 passed by Commissioner Customs, Central Excise & Service Tax-Bhopal]

1. Whether Press Reporter may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of the 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 Department Authorities?

Commissioner, Customs,

Central Excise & Service Tax-Bhopal Appellant

Vs.

M/s. Khajuraho Transport Agency,

Jai Stambh Chowk, SATNA (M.P.) Respondent

Appearance: Shri Amreesh Jain, AR for the appellant.

None for the respondent

Coram: Honble Mr. Justice G. Raghuram, President

Honble Shri R.K. Singh, Member (Technical)

Final Order No. 52059/2015

Per: R.K. Singh

Revenue is in appeal against order-in-appeal No. 341/BPL/2009 dated 02/09/2009 which set aside the order-in-original dated 02/09/2009.

2. The facts of the case are as under:

The respondent entered into a contract with M/s NFL and M/s IFFCO for transportation of the goods which also involved unloading of fertilizer from railway wagons onto trucks, unloading and stacking in warehouse and destacking and loading into trucks. In addition, the respondent was to ensure every necessary steps to protect fertiliser from damage. The primary adjudicating authority vide order-in-original dated 13/01/2009 held that the service provided amounted to cargo handling service (Section 65 (23)/(105) (zr)) and confirmed the demand of Rs. 7,78,365/- along with interest and penalties including the mandatory penalty under Section 78 of the Finance Act 1994. The Commissioner (Appeals) observed that a plain reading of the agreement showed that the respondent were mainly hired for transportation of goods and that loading/unloading were only incidental to the main activity which was transportation of goods, and therefore, the service provided was covered in the scope of GTA service. As a consequence, the Commissioner (Appeals) vide impugned order set aside the order-in-original dated 13/01/2009.

3. In its appeal Revenue has contended that as per the definition of cargo handling service given in Section 65 (23) ibid., loading, unloading, packing, unpacking is clearly covered under the scope of cargo handling service and, therefore, prayed for setting aside of the impugned order.

4. The Ld. Advocate, on the other hand, stated that the essential nature of the contract was to provide transport service and loading unloading were only incidental thereto. He stated that it was a composite contract and no separate amounts were mentioned for loading unloading etc

5. We have considered the contentions of both sides. We find that the copy of the contract is not attached with appeal papers. However, the Commissioner (Appeals) has categorically observed that a plain reading of the agreement showed that the respondents were mainly hired for transportation of goods. That being the case and having regard to the contention of the respondent that there were no separate charges mentioned for loading/unloading, the impugned service provided under such a composite contract would be classifiable under GTA services by virtue of Section 65 A(2)(b) ibid. In the case of Dalveer Singh Vs CCE Jaipur 2008(9)STR491(Tri-Del), CESTAT held as under:

The authority below has held that all the activity mentioned in the definition of cargo handling service have been undertaken by the appellant in terms of the contract for transportation, inasmuch as they include unloading from train railway wagons, staking on railway platform, loading/unloading in contractors trucks and loading trucks at companys warehouse and would constitute cargo handling services. However, I find that the above loading, unloading in the truck is a part and parcel of the transportation of goods services. Reading of the definition of cargo handling service suggest loading, unloading and packing or unpacking of cargo including freight special containers. The emphasis is on handling of cargo and such service may be incidental of freights, whereas transportation of the goods would incidentally include loading and unloading the same would not get covered by the definition of cargo handling services. To the same effect is the Boards Circular dated 1-8-2002 clarifying that mere transportation of goods is excluded from the purview of cargo handling service. The terms of the contract made on 8-4-2004 are only to the effect that the contractor was to make arrangement to transport the fertilizers from railway station. The said terms are different from the terms of second contract, which is for handling the goods. As such, I agree with the appellant that mere transportation of the goods would not make them as cargo handling service provider.

6. In the light of the foregoing discussion, we do not find the Revenues appeal sustainable and therefore dismiss the same.

(Justice G Raghuram)

President

(R.K. Singh)

Member (Technical)

Ritu

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