Chuttan Lal Agarwal Vs Commissioner of CGST and Central Excise (CESTAT Delhi)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi, examined an appeal challenging an order that had confirmed a demand of service tax, along with interest and penalties, under the category of “Cargo Handling Services” for the financial years 2013-14 and 2014-15. The appellant, a sole proprietor, was engaged in transporting and distributing newspapers printed by Dainik Bhaskar Limited from its printing press to various designated centres. Under an agreement with the newspaper company, the appellant also performed activities such as binding, counting, bundling, packaging, loading and unloading in connection with newspaper distribution.
The service tax demand arose after scrutiny of third-party information received from the Income Tax Department, which showed tax deduction at source on payments made to the appellant. The department alleged that the services provided were not covered under the negative list of services under Section 66D of the Finance Act, 1994, and that the appellant had neither obtained service tax registration nor filed ST-3 returns. Consequently, a show cause notice demanded service tax, interest and penalties.
The appellant argued that the authorities had incorrectly classified the activities as “Cargo Handling Services” merely because the agreement referred to loading, unloading and packaging. It was submitted that the actual nature of the activity was transportation and supply of newspapers, which was either exempt under the Mega Exemption Notification or covered by the negative list under Section 66D of the Finance Act. The appellant also contended that no service tax had been charged in bills or recovered from the recipient.
