Jai Ram Yadav vs Cce, Chandigarh-Ii

(Arising out of OIA No.8/ST/APPEAL/CHD-II/2009 dt.30.4.09 passed by Commissioner of Central Excise (Appeals), Chandigarh)

Jai Ram Yadav Appellants

Vs.

CCE, Chandigarh-II Respondent

Appearance:

Present for the Appellant: Shri Naveen Bindal, Advocate

Present for the Respondent: Shri D.V.Nagvenkar, AR

HonbleMr.P.K.Das, Member (Judicial)

HonbleMr.P.S.Pruthi, Member (Technical)

1.

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

No

2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No

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

seen

4. Whether order is to be circulated to the Department Authorities?

Yes

Coram:Honble Mr.P.K.Das, Member (Judicial)

HonbleMr.P.S.Pruthi, Member(Technical)

Date of Hearing/decision: 21.01.2015

FINAL ORDER NO.50750/2015

PER: P.S.PRUTHI

The appellant is in appeal against the impugned Order-in-Appeal confirming classification of service rendered by them under the category of Cargo Handling Service, confirmed the demand of service tax with interest and imposition of penalty under section 75A, 76, 77 and 78 of the Finance Act, 1994.

2. The facts of the case are that the appellant was working as contractor for M/s.Shreyans Industries Ltd. and he employed 15-20 persons and provided them as labour to M/s.Shreyans Industries Ltd., who are engaged in the manufacture of papers. The labour so contracted were given the job work of stitching/stacking, shifting of ream, bundles, etc. from the finishing house to excise godown, loading of finished bundle/reels etc. in the truck. The case of the appellant is that they were merely providing contract labour for job work to be undertaken as above. The Revenue was of the view that activity amounted to providing of Cargo Handling Service on which service tax is payable.

3. Heard both sides.

4. Learned Counsel for the appellant emphasized that they have provided labours as an individual and do not come under the purview of Cargo Handing Service as they are not cargo handling agency.

5. Learned AR for the Revenue reiterated the findings of the Commissioner (Appeals).

6. We have considered the rival contentions. The Cargo Handling Service in terms of section 65(23) of the Act is reproduced as under.

cargo handling service means loading, unloading, packing or unpacking of cargo and includes cargo handling services provided for freight in special containers or for non-containerised freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport, and cargo handling service incidental to freight; andservice of packing together with transportation of cargo or goods, with or without one or more of other services like loading, unloading, unpacking,but does not include, handling of export cargo or passenger baggage or mere transportation of goods.

The statutory meaning of the Cargo Handling Service has been given under section 65 (105) (zk) of the Finance Act, 1994 which reads as under:-

Taxable service means any service provided to any person, by a Cargo Handling Agency in relation to cargo handling services.

We find that the appellant in this case is a small contractor who hires labour and provides the same to Shreyans and his service may not be equated with activities covered under the definition of Cargo Handling Service. The Commissioner (Appeals) in his order stated that the appellant that have not brought on records to prove conclusively that they are merely supplying the labour. But we find that the Revenue has not established beyond doubt that a contract was entered into between the appellant and M/s.Shreyans Industries Ltd. for Cargo Handling. We find that the activities undertaken are akin to labour jobs. The labour is not employed by the appellant but only hired and used in the factory of Shreyans.

7. Learned Counsel for the appellant relied on the Boards circular No.B-II/I/.2002-TRU dated 1.8.2002 wherein it has been stated that service provided by a an individual by way of hiring labour for loading/unloading in their individual capacity will not be liable to tax under the category of Cargo Handling Service. We also note that even if service tax is paid by the contractor, the same could be availed as credit by M/s.Shreyans leading to a revenue neutral situation.

9. In view of above circular of the board, we find that the activity undertaken by the appellant is not covered under the category of Cargo Handling Service. The appellant is as individual engaged in providing contract for various jobs and in the circumstances the activity of the appellant does not come under the purview of Cargo Handling Service.

10. The appeal is allowed.

(Pronounced in the court)

(P.S.PRUTHI) (P.K.DAS)

MEMBER (TECHNICAL) MEMBER(JUDICIAL)

mk

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