Separate Transport and Cargo Handling Charges Not Composite Service: CESTAT Chandigarh Chandigarh

Principal Commissioner of Central Excise Vs Adani Logistics Ltd. (CESTAT Chandigarh)

Summary: The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh, dismissed the Revenue’s appeal against Adani Logistics Ltd., upholding the Order-in-Original dated 31 December 2015 that had dropped a service tax demand of ₹40,66,90,262, along with interest and penalties. The dispute covered the period from 1 April 2009 to 31 March 2015 and concerned the classification of multimodal logistics services involving transportation by road and rail, terminal handling and cargo handling. The Department alleged that the company artificially bifurcated consideration received under composite logistics contracts into rail freight, terminal handling charges and goods transport agency services to claim abatements and reduce its service tax liability.

The Revenue contended that the contracts represented comprehensive end-to-end logistics services whose essential character was cargo handling. Adani Logistics argued that customers could independently select the services they required and that the contracts and invoices separately identified the applicable charges. The company submitted that service tax had already been discharged under the relevant categories, including cargo handling, transportation by rail and goods transport agency services. It relied on judicial precedents and departmental circulars supporting separate classification where transportation and cargo handling charges were independently identifiable.

The Tribunal examined the contractual arrangements and observed that the Department had relied primarily on eight contracts despite the company providing services to more than 400 customers. It found that the contracts generally specified separate rates for different activities and permitted customers to choose the services required. Cargo handling constituted only a small proportion of the overall consideration, while transportation by road and rail represented the principal activity. Referring to Sections 65A and 66F of the Finance Act, 1994, and decisions including Balmer Lawrie & Co. Ltd., United Shippers Ltd. and Salem Starch & MFR’s Service Industrial Co-op Society Ltd., the Tribunal held that separately identifiable services could not automatically be classified as a single cargo handling service or naturally bundled service.

The Tribunal further held that the Revenue had failed to establish that cargo handling constituted the essential character of the services, either before or after the introduction of the negative list regime and bundled services guidance” target=”_blank” rel=”noopener”>negative list regime on 1 July 2012. It observed that service tax paid on transportation activities had already been accepted by the jurisdictional authorities and that demanding tax again by treating those activities as bundled services would amount to double taxation. Regarding limitation, the Tribunal found no evidence of suppression, misstatement or intention to evade tax, particularly when the company had regularly paid service tax and filed ST-3 returns. Accordingly, the extended limitation period was held inapplicable, the adjudicating authority’s order was sustained, and the Revenue’s appeal was dismissed by Final Order No. 60234/2026 dated 9 March 2026.

Cases Discussed

• Maharashtra State Electricity Distribution Company Limited vs. Ratnagiri Gas and Power Private Limited & Ors — 2023 INSC 993
• United Shippers Ltd. — 2015 (37) S.T.R. 1043 (Tri.-Mumbai)
• Balmer Lawrie & Co. Ltd. — 2014 (35) S.T.R. 800 (Tri.-Mumbai)
• R.K. Transport Company — 2012 (27) S.T.R. 496 (Tri.-Del.)
• Salem Starch & MFR’s Service Industrial Co-op Society Ltd. — 2014 (33) S.T.R. 16 (Mad.)
• Mahindra & Mahindra — 1995 (76) E.L.T. 481 (S.C.)

FULL TEXT OF THE CESTAT CHANDIGARH ORDER

M/s Adani Logistics Limited, the Respondents, a limited Company engaged, inter-alia, in providing comprehensive multimodal logistics solutions by road, rail and sea for handling a wide range of cargo, including containers, as per the requirements of customers, from/to ports/Inland Terminal Depots/ Railway Terminals in respect of domestic, import and export cargo; the respondents paid service tax on different categories based on the nature of different services. It appeared to the Revenue that different services provided by the Respondent for transportation of cargo by road or rail and Terminal Handling Service are naturally bundled service under ‘Cargo Handling Service’ and that the respondents have artificially bifurcated the amount of value of service under ‘Rail freight’, ‘Terminal Handling Charges’ and ‘Goods Transport Agency Services’ for availing abatement wrongly and to evade payment of service tax.

2. Accordingly, Revenue issued three show cause notices, dated 10.10.2014, 29.05.2015 and 15.09.2015, covering the period 01.04.2009 to 30.09.2013, 01.10.2013 to 31.03.2014 and 01.04.2014 to 31.03.2015 respectively, proposing to demand service Tax of Rs 40,66,90,262, along with interest and penalties, also proposing to impose penalty on Mr. Siddharth Niyati, Sr. Manager (F&A) of the Respondent. Commissioner, Service Tax, Delhi-IV, Gurgaon, adjudicated these three show cause notices by a common Order-in- Original dated 31.12.2015; The adjudicating authority dropped all the proceedings initiated against the respondent for demand of Service Tax, interest and penalties; also dropped the penalty proposed against Mr. Siddharth Niyati, Sr. Manager (F&A) of the Respondent Company.

2.1. Aggrieved by the aforesaid Impugned Order, the Department has preferred Appeal No. ST/60359/2016, on the following grounds.

(i). Various contracts/agreements, being for a complete end-to- end logistics solution, entered in to by M/s Adani Logistics Ltd with their customers, for example with M/s Maruti Suzuki Ltd, clearly indicate that the respondents were providing a comprehensive bundle of services which squarely fits in the category of Cargo Handling Services; while the contracts/ agreements show a single rate for the complete bundle of service rendered to their customers, the respondents contrived an artificial splitting of the single composite rate, in the invoices, into various types of rates for different services claimed to be rendered by them; mere raising of invoices/bills cannot take away the essential character of the service rendered i.e. Cargo Handling Service.

(ii). the service provided by the respondents was in relation to cargo handling and not mere transportation of cargo; it is not the case that transporter was providing the service of transportation and other services like loading/ unloading are incidental; services are provided by cargo handling agency and it includes different types of service.

(iii). Respondents’ contention that they entered into contracts to provide any one or more of the services as per the requirement of the customers and that the customers were at liberty to choose any of the services provided by the noticee and each service was charged separately, is not correct; it is a fact that for continuous nature of services, no service receiver will opt for different service provider, as it will not only add to the cost of service but will also be time consuming; Shri Siddharth Nyati, Senior Manager (Finance & Accounts) of the noticee, stated on 19.04.2013, that in case of M/s Khanna Paper Mills Ltd, they had quoted single rate of Rs.62,954.00 per container for end to end service and that bifurcation of the above amount into various categories of service was done at their level.

(iv). Reliance placed by the respondents on the cases of R.K. Transport Company 2013(27) STR 496 and M/s Gajananad Agarwal 2009 (13)STR138(Tri.-Kol) is of no avail; it was held in the case of R.K. Transport Company that mere transportation of goods is excluded from Cargo Handling services; understandably that is not the issue in the instant case and the revenue appeal in the case of R.K. Transport Company is pending before the High Court; in the case of Gajananad Agarwal the issue before Hon’ble Court was taxability of the service and penalty, which is not the issue here. Any activity incidental to freight of cargo is also liable to be taxed under such class. Mode of transport is irrelevant for incidence of levy once the service provided meets the test of handling of cargo in the manner envisaged by law

(v). The Adjudicating authority’s reliance on CBEC Circular No. 186/5/2015-ST dated 05.10.2015 is incorrect as the same is applicable to cases where entire Transportation is through road; the present case involves Handling of cargo at ICD/Port and transportation through Multi-modes.

(vi). The Adjudicating Authority has failed to take due cognizance of the fact of splitting the value in the invoices and failed to appreciate substantial evidence brought on record. The Adjudicating authority discussed the case of M/s Khanna Paper Mill Limited, wherein the rail charges and terminal handling charges are same as those of M/s Adani Wilmar Ltd, though they are at various distance from the port; this fact conclusively proves that all charges are bifurcated artificially.

3. Shri C. Dhanasekaran, Learned Special Counsel for Revenue submits that the show cause notice, issued for the period 1.4.2009 to 30.9.2013, levelled specific charges; the Respondent entered in to composite contract under CHS with their clients. They have not discharged service tax on the full value contracted under the head ‘Cargo Handling Service’; however, they had raised tax invoices bifurcating composite rates into different components like GTA, Road Transport, on which consignee was directed to pay Service Tax, Terminal Handling Charges, Rail Freight ( on abatement at the rate of 70% was availed; the respondent collected constant Terminal handling charges, though the destinations are situated at different places and distances also used different routes from Mundra to various destinations; Artificial bifurcation of the prices is evident in contracts with M/s Khanna Paper Mills Limited and others; the material evidence is presented in the Show cause Notice.

4. Learned Special Counsel submits that the Adjudicating authority instead of considering door-to-door activity as a composite service, simply relied on the defence of the Respondent and finds that

(i). There were contracts in which separate charges were quoted for providing CHS, GTA, and Railway Services; the customers are at liberty to choose any service provided by them; accordingly, invoices were raised as per the services availed by customers, showing services and charges separately; the parties’ intention and the nature of the contracts should be considered.

(ii). Though composite rates were indicated for all services in some contracts, the contract was later amended by mutual consent;

(iii). As there was no single essential character and the services of cargo handling and transportation of goods were independent, Section 65A of the Finance Act is not applicable; moreover, Section 65 (23) excludes services of” mere transportation of goods’; transportation is independent in nature and has no connection with ‘Cargo Handling Service’.

(iv). major activity was transportation and ‘Cargo Handling Service’ was an incidental activity, contributing a small percentage compared to road/ rail transportation.

(v). Circular File No.11/1/ 2002- TRU dated 01.08.2002 and Circular No.186/5/2015 -ST dated 5.10. 2015 are applicable and that no case of charging composite rate in the invoices came to the notice of the Department.

(vi). the services are separately identifiable and customers have a choice to avail or not to avail; therefore, they cannot be treated as a bundled service Even after 01.07.2012.

(vii). There is nothing wrong in having constant freight and terminal charges for the various destinations, situated at different places and the distances from Mundra, in respect of Contract with Adani Wilmar Ltd, M/s Khanna Paper Mills Limited and M/s Balkrishna Tyres.

5. Learned Special Counsel reiterates grounds of appeal and submits that the Respondent was providing a comprehensive bundle of services which squarely fit in the category of CHS at a single rate for the complete bundle of services; it can be seen from the contracts with M/s Mahavir Champas Pvt Ltd, M/s Jindal Waterways Limited, M/s Excellent Clearing Agency, M/s J.M.Kothari &Sons, M/s Balkrishna Tyres, and contract with M/s Maruti Suzuki India Ltd that the respondent provided a complete end-to-end logistics, including multi- modal transportation; customers had no option to choose any of the services provided by the Respondent; correct classification of service is therefore, ‘Cargo Handling Service’; respondents respondent resorted to artificial, contrived splitting of the single composite rate into various types of rates for different services claimed to be rendered by them; the Adjudicating Authority failed to appreciate substantial evidence brought on record to show the artificial contrivance in splitting the single composite; Shri Siddharth Nyati, stated on 19.04.2013 that in the case of M/s Khanna Paper Mills Ltd, they had quoted single rate of Rs.62,954.00 per container, for getting the cargo from Mundra and to deliver at the customers’ premises and that the bifurcation of the above amount into various categories of service was done at their level.

6. Learned Special Counsel submits that no prudent service receiver will opt for a different service provider, as it will not only add to the cost of the service but will also be time-consuming; Respondent’s reliance on the case of R.K. Transport Company 2013(27) STR 496 is of no help as the case was regarding the services of transportation, and thus, it was held that mere transportation of goods was excluded from ‘Cargo Handling Service’. He submits that similarly, reliance on Gajanand Agarwal 2009(13) STR138(Tri. -Kolkata) is also of no help as the issue therein was whether provision of pay loaders for loading of coal into Railway wagons would come under the purview of CHS or not’ respondent did not provide merely a transportation service; the fact that the Respondent provided various types of services, is confirmed by them in their written submissions as recorded in the OIO; in fact, any activity incidental to freight of cargo is also liable to be taxed under ‘Cargo Handling Service’ as held in Gajanand Agarwal 2009(13) STR138 (Tri. -Kolkata). He further relies on Gayatri Carriers Pvt Ltd 2013 (32) STR 367 (T); Gangadhar Bulk Movers Pvt Ltd 2012 (27) STR 258 (Tri-Mumbai) and Coal Carriers 2011 (24) STR 395 (Ori.).

5. Learned Special Counsel submits further that the adjudicating authority wrongly applied CBEC Circular No.186/5/2015-ST dated 05.10.2015; the said circular applies to cases where the entire transportation is through road. Whereas, the present case is regarding the Handling of cargo at ICD/Port and transport through multiple modes of transportation. He submits that the argument of the respondent that the customers were at liberty to choose any of the services provided, is wrong, as all the rates are fixed after considering all aspects of the services and after negotiation; the responsibility of the Respondent starts from the handling of cargo at the port till the delivery of cargo; therefore, all different elements of service are integral to one overall service; contracts with M/s Khanna Paper Mill Limited and M/s Adani Wilmar Ltd indicate that the rail charges and terminal handling charges are the same; though, the Adjudicating Authority discussed these cases, wrongly accepts the argument of the respondent on bifurcation, which is artificial. He submits that the Respondent claims that rate split was required for revenue purposes for preparing invoices in Terminal Operating System (TOS); however, it’s clear that they were splitting the revenue in such a way that they had to pay minimum tax and they could claim unavailable abatements.

6. Learned Special counsel supports the proposal to levy penalty on Shri Siddharth Nyati Senior Manager (Finance &Accounts); he was well aware of all facts relating to the nature of the contract and service and bifurcation of the service contract value as he confirmed in his statement dated 19.04.2013. Learned Special Counsel concludes hos arguments sating that the Order-in-Original is not legal and proper to the extent of dropping the demand of service tax and consequent non- imposition of interest and penalty under Section 78/78A of the Finance Act, 1994.

7. Shri Jitendra Motwani, Learned Counsel for M/s Adani Logistics Limited, the Respondents, submits that the services rendered by the respondents include the following items of operations, in respect of domestic cargo and import/ export cargo.

7.1. Domestic Cargo

• Transport of empty containers by truck to the customer’s factory- Service tax paid by recipient of service under RCM for “GTA Service”;
• Transport of stuffed cargo in containers owned by customers by trucks- Service tax paid by recipient under RCM for “GTA Service”.
• Unloading of cargo and loading on rakes, at the dispatching ICD/ Terminal-Respondent pays Service Tax under ‘Cargo Handling Service’
• Transport of cargo by railway rakes to the receiving ICD/Terminal. Service Tax paid by railway under “Transportation of goods by Rail Service”.
• Unloading the cargo from railway rakes at the receiving ICD/Terminal and loading onto the trucks-Respondent pays Service Tax under ‘Cargo Handling Service’;
• transportation of cargo from receiving ICD/ Terminal to customers’ premises via Road- Service tax paid by recipient of service under RCM for “GTA Service”

Import Cargo

7.2. In case of import cargo, the responsibility of the Respondent commences once the cargo after clearance of goods from the Port area

• Loading of cargo on the railways rakes at the Ports/ Dispatch ICD/Railway Yard-Respondent pays Service Tax under ‘Cargo Handling Service’;
• Transport of cargo by rakes to the receiving ICD/ Terminal by rail- via rail. Service Tax paid under the taxable category of “Transportation of goods by Rail Services”
• Unloading of cargo, from the railway rakes, and loading onto the trucks, at the receiving ICD/Terminal – Respondent pays Service Tax under ‘Cargo Handling Service’;

7.3. In certain cases, the Respondent provides services of de-stuffing the cargo from containers and stuffing of cargo into containers after completion of custom clearance procedures; Respondent does not carry on the custom clearance activity, and the same is carried out by an agent nominated by the customers; Respondent undertakes only the activity of stuffing and de- stuffing, which is classifiable under ‘Cargo Handling Service’. In cases where the custom clearance procedure is delayed, at the receiving ICD/ Terminal, then on customers’ requirement, the containers stuffed with cargo are stored at the Respondent’s warehouse at the terminals; Service Tax for storage of cargo is charged under taxable category of “Storage and Warehousing Service”; the service of transportation of cargo from receiving ICD / Terminal to customers’ premises via road is provided by the Respondent (on customers’ requirement basis) wherein the Service tax is paid by the recipient of service under the taxable category of “GTA Service”, under RCM.

7.4. Export of Goods:

• transport of cargo to/from customer’s premises (on request from customer) to Dispatch ICD/Terminal- Service tax paid by recipient of service under RCM for “GTA Service”
• loading/ un-Loading of cargo at the ICD/Terminal and loading/ unloading at railway terminals-Respondent pays Service Tax under ‘Cargo Handling Service’;
• Transport of cargo from Dispatch ICD/Terminal to receiving rail yards/Terminal Port -Service Tax paid under the taxable category of “Transportation of goods by Rail Services”
• Unloading of cargo from the railway rakes and loading on to trucks- Respondent pays Service Tax under ‘Cargo Handling Service’;

8. Learned Counsel for the respondents submits also that with regard to any of the above 3 types of cargo, other Rail operators also bring their rakes at the Respondent’s ICD /Terminal, for which the Respondent has been collecting “Terminal Access Charges” and paying service tax on such activity under the taxable category of “CHS”; In the normal course of business, the customer approaches the Respondent to avail any/all of the above-mentioned services, as per their requirement. He submits that as per the understanding between the Respondent and the Customers, they enter into contract(s) to decide the scope of services; such contracts may or may not include all the services; however, schedule of rates for the services are provided to the Customers; the above services are separately charged by the Respondent in their invoices as per the rates indicated in the Contract entered into with the customers; accordingly, the customer has the option of availing any one or more of the above services, as per their requirement and the Respondent provides services as per their instructions.

9. Learned Counsel for the respondents submits further that the respondent has provided each and every service separately; while the respondent provided Services to more than 400 parties, SCN dated 10.10.2014 has considered contracts with, and services provided to,8 parties only; Respondent has entered into contracts with a defined scope of services that it can provide, along with the rates for the services; it was open for the Customers to pick and choose the services which they wanted ALL to provide; allegation that the responded provided bundled services is bald and baseless; if the contracts were for bundled services, there was no reason to indicate separate rates for each service. He submits that the department did not discharge the onus to show that the services were bundled in nature. and the same has not been done in the present case; separate invoices are issued with respect to each service; service tax for services of GTA and Rail transport cannot be levied under Cargo Handling Services; contracts entered into with customers have terms and conditions specifically set out in writing and the same have been agreed and acted upon by both the parties; department has no jurisdiction to interfere with or interpret the contracts between the parties. He relies on

• Mahindra & Mahindra1995 (76) E.L.T. 481 (S.C.)
• Maharashtra State Electricity Distribution Company Limited vs. Ratnagiri Gas and Power Private Limited & Ors 2023 INSC 993
• Transmission Corporation of Andhra Pradesh Ltd v. GMR Vemagiri Power Generation Limited (2018) 3 SCC 716
• Essar Projects Pvt. Ltd. vs. CCE 2004 (33) STR 696 (Tri. – Ahm.).

10. Learned Counsel for the respondents submits in addition that the issue is no longer res-integra and is squarely covered in favor of the respondent; the SCN dated 10.10.2014 itself records the fact that the services availed and payments for the same are indicated separately in the invoices; CBEC, vide Circular F. No. B.11/1/2002-TRU dated 01.08.2002, clarified that when services are separate mentioned in the contract and separate invoices have been issued for the same the services cannot be treated as naturally bundled. He relies on United Shippers Ltd2015 (37) STR 1043 (Tri. – Mumbai) [ affirmed in 2015 (39) STR 369 (SC)]. which in turn relied on and R.K. Transport Company 2012 (27) STR 496 (Tri. -Del.). He further relies on

• Balmer Lawrie & Co. Ltd2014 (35) STR 611 (Tri. – Mumbai) and 2014 (35) STR 800 (Tri. – Mumbai)]
• South India Corporation Ltd2011 (22) STR 70 (Tri. – Chennai)
• R. K. Transport Company 2012 (27) STR 496 (Tri. – Del) upheld by Supreme Court 2018 (16) GSTL J78 (SC)
• Jai Jawan Coal Carriers Pvt. Ltd. 2015 (37) STR 509 (Tri. – Del.)
• Jet Airways (India) Ltd 2008 (11) STR 645 (Tri. -Ahmad.)
• Shipping Corporation of India Ltd2016 (46) STR 835 (Tri. – Mumbai) upheld in 2018 (8) GSTL J68 (S.C).

11. Learned Counsel for the respondents submits moreover, without prejudice to the above, that the Respondent has merely followed an industry-wide practice; its competitors in the industry have never been questioned while being engaged in similar if not identical practices; department has failed to justify as to why it is has not raised any dispute with regards to the service tax liability of the competitors, such as Container Corporation of India Limited. Learned counsel submits that a perusal of sample invoices issued by the Container Corporation of India, shows that CCI, who provide multimodal services, raise separate bills to their customers based on the services availed by them; respondent should not be singled out to raise demands.

12. Learned Counsel for the respondents submits the proceedings are vitiated as the demand has been raised on assumptions and presumptions without even considering all the documents; department has already accepted the tax paid by the Recipient under the heading of ‘Goods Transport Agency’ and ‘Transportation by Rail’ Services; department now cannot attempt to raise demand under the heading of Cargo Handling Services for the same transaction. He relies on CBEC’s Circular No.ST- 51/13/2002 dated 07.01.2003;

13. Learned Counsel for the respondents submits that the Department failed to establish that the essential character of the service provided is ‘Cargo Handling Service’; there is logic and no discussion in SCN as to how the various services provided by the Respondent should be bundled under the category of CHS; the revenue appeal merely states that the respondent entered into certain contracts where no options were provided to pick and choose the services and therefore, entire contract should be considered to be one for providing CHS; The said statement is totally baseless; the Department failed to discharge the onus of proving that the services are in the nature of CHS; Revenue must find out the essential character of the service for the purposes of bringing the assessee within the framework of the said activity, as held in Salem Starch & MFR’s Service INDL Co-op. Society Ltd2014 (33) STR 16 (Mad.); stand of the department is contrary to Section 66F of the Finance Act, 1994’ in the instant case, though there is one contract with one customer, each service is separately identifiable and has a separate rate; department wrongly alleges that the Respondent was providing complete end-to-end logistics solutions i.e. comprehensive bundle of services to its customers, including multi-modal transportation; the contracts show a single rate for the complete bundle of services and that only in the invoices, rates were artificially split; it was held, that the burden of proving the applicability of a taxing provision is on the Revenue as held in Garware Nylons Ltd1996 (87) ELT12 (SC); Phoenix Mills Ltd2004 (168) ELT 310 (Bom.) and Navin Chimmanlal Sutaria 1981 (8) E.L.T. 913 (Bom.)

14. Learned Counsel for the respondents submits that demand for the period 01.04.2009 to 30.09.2013, was issued on 10.10.2014, beyond one year and hence barred by limitation; department invoked extended period without establishing that there was suppression, omission or failure to disclose information etc, with intent to evade the payment of service tax; revenue did not produce any evidence to show that the Respondent had a mala fide intention to evade payment of service tax. He submits that as the dispute is purely interpretational in nature; the Respondent had submitted all requisite documents during the course of investigation and no positive evidence, to show suppression of records/facts with an intent to evade payment of service tax, has been brought on record. He submits further that the Respondent had filed its ST-3 Returns and the same were accepted and no irregularities were pointed out by the Department; therefore, extended period cannot be invoked. He submits that books of accounts had been audited by the Department every financial year during the disputed period and therefore it is well within the knowledge of the Department. He relies on the following cases.

• Kumbhi Kasari Sahakari Karkhana Ltd– 2011(266) ELT 87 (T).
• Tinplate Company of India Ltd2010 (256) ELT 595(T) [Affirmed by High Court in 2013 (289) E.L.T. 414 (Jhar.)].
• SDL Auto Pvt. Ltd2013 (294) E.L.T. 577 (Tri. – Del.)
• Essar Projects (India) Ltd2011(23) STR 140 (T)

Additional Written Submissions by Respondent

15. Learned Counsel for the appellants submitted additional written submissions, dated 10th day of July 2025, as permitted, by the Bench on his request, during the course of hearing. He counters the stand taken by the department, in grounds of appeal as well as during hearing, as follows.

16. Case of the department is based on incorrect interpretation of agreements: Learned Counsel submits that it is the case of the department that while the agreements provided for a composite price, the same has been artificially bifurcated in the invoices to evade payment of service tax. He submits that it can be seen from the contracts entered into with various companies that rates of each and every services viz., transportation of goods by road, transportation of goods by rail and cargo handling service (terminal handling charges) has been shown separately; the same rates were reflected in the invoices raised; it is not even the case of the department that the rates mentioned in the invoices were at variance to the rates mentioned in the agreement. He submits that the argument of the department that the contracted price is artificially split, is contrary to the plain and clear tenor of the agreement; even the 8 agreements relied upon in the show cause notice clarify that in each and every contract, rates of every services were provided separately; all the services were clearly independent of each other with complete discretion provided to the service recipient to avail services it desires to avail; department has made the present case on incorrect facts and with a premediated mind set; as an example, the department relies upon the contract with Maruti Suzuki to contend that the agreement was to provide a complete package for movement of imported goods, ignoring Schedule 2 of agreement, which clearly provides for rates of different services.

17. He submits with respect to cargo handling services, tax has been paid by the Respondent at 100% of taxable value; as regards the transport of goods by road, consignment note has been issued by the Respondent, on the basis of which the Recipients of service has already paid tax; service tax on transport of goods by rail, less the abatement, has been deposited by the Respondent; department has totally misinterpreted the intention of the contracting parties to treat each and every services as an independent service. He submits that it was held in Mahindra & Mahindra 1995(76) ELT481(SC) that courts should proceed on the basis that apparent tenor of the agreements that reflects the real state of affairs; revenue is permitted to prove that the tenor is not real by placing reliance on cogent evidence.

18. Issue is covered by decision of Tribunal and board Circular: Learned Counsel submits that Board Circular dated 01.08.2022, clarifies, at Para, that if the bill indicates the amount charged for cargo handling and transportation separately then tax would only payable on cargo handling charges; the practice followed by the appellants is a general practice in the trade; m/s Container Corporation of India conducts business in an identical fashion; it is not correct to accept the same practice by others and to penalise the respondents alone; moreover, the issue stands settled in favour of the Respondent vide various decisions as follows.

• R.K. Transport Company – 2018 (16) GSTL J78 (SC)
• Jai Jawan Coal Carriers Pvt. Ltd. – 2015 (37) STR 509 (Tri. Del.)
• Balmer Lawrie & Co. Ltd. – 2014 (35) STR 611 (Tri. Mumbai) and 2014 (35) STR 800 (Tri. Mumbai)
• South India Corp. Ltd. – 2011 (22) STR 70 (Tri. Chennai)
• United Shippers Ltd. – 2015 (37) STR 1043 (Tri. Mumbai) and 2015 (39) STR J369
• S.T. Electricals Pvt. Ltd. – 2019 (20) GSTL 273 (Tri. Mumbai)
• Hindustan Steel Limited – 1978 (2) ELT 159 (SC)

19. Key findings of the impugned order not challenged in appeal: Learned Counsel submits that the revenue did not challenge the finding of the adjudicating authority, at Para 9.12 and 9.13, that even if the agreement is to be treated as composite/bundled, then transportation by Rail being the major service, it is the Rail transportation that gives the essential characteristics; in that case, the appellant could have paid lesser tax with rebate at 30%; if GTA service was treated as essential service then the Respondent was not required to pay any tax at all as the entire liability was on the recipient of the service; the argument of the department is totally bereft of merits as under the Finance Act, service is to be classified under Section 65(A) (pre-negative list) and Section 66(F)(post negative list) under the sub- clause that provides the most specific description. He submits that department has also not challenged the finding of the adjudicating authority, with respect to GTA, that the service tax paid by the recipients was not disputed by the Jurisdictional Commissionerate; the said assessment has attained finality.

20. Revenue wrongly applied the Provisions of Law: Learned Counsel submits that whole case of the department has been made out by placing reliance on Section 65A (2) (b) (pre negative list) by treating the service as composite service and Section 66F(3) for period (post negative list); provisions of Section 65A(2)(b) can be invoked only in cases where the department is unable to classify the services under Section 65(2)(a); Section 65(2)(a) provides that the sub-clause which provides the most specific description shall be preferred to sub clauses providing a more general description; department has not given any reasons as to why the services cannot be classified under Section 65(2)(a); similarly, post 1.7.2012, Section 66 F(2) provides that most specific description shall be preferred for the purpose of classification of service; Section 66F(3) that deals with bundled service and has been wrongly relied upon; Section 66F (3) can be invoked only if the provisions of 66(F)(2) are not applicable; in the present case each service is separately identifiable and as such the same have been correctly classified under heading that provides most specific description; therefore, treating the service as composite service/bundled service by invoking Section 65(2)(b)/66(F)(3) as the case may be is without any basis. He submits that the revenue pleads to set aside the order just by looking at 8 sample contracts, which were also totally mis-interpreted; on the other hand, the Adjudicating

Authority after going through 150 contracts has given a categorical finding that the basic intention of the customer in each contract is to avail service as per their requirement.

21. Case laws relied upon by department not applicable: Learned Counsel submits that the ratio of cases relied upon by the Department counsel are not applicable to the facts of the present case inasmuch as all the said case laws do not deal with the issue involved in the present case; in all the cases, the issue before the respective courts was whether hiring of loaders for mechanical transfer of coal would amount to cargo handling services or not; as such, it was held that the activity carried out by the loaders was that of loading and unloading of cargo but would fall under the taxable category of cargo handling service; on the other hand the cases relied upon by the respondents involve identical facts; judgement of this Hon’ble Tribunal in United Shippers (supra) has been upheld by Hon’ble Supreme Court is applicable to the facts of the present case on all fours; Though the department tries to distinguish the cases of R.K. Transport Company and Gajanand Agarwal (both supra), relied upon by the respondents, no reasons are provided as to why the decision will not apply to the facts of the present case.

22. Heard both sides and perused the records of the case. The Respondent is providing various services like Transportation by Road, Transportation by Rail, Cargo Handling etc to their customers, under various agreements; the respondents are billing the customers item- wise in the invoices, claiming that though the agreements quote rates for all the services, the customers are free to avail the services they want; the respondents/their customers paid service tax on different categories based on the nature of different services. The department alleges that the agreements are comprehensive and as such the services cannot be vivisected and need to be treated as one service, classifiable under the main Service i.e. Cargo Handling Service before 1.7.2012 and after 1.7.2012 as a bundle of services. The Respondents offer services the logistics solutions by road, rail and sea for handling a wide range of cargo, including containers, as per the requirements of customers, from/to ports/Inland Terminal Depots/ Railway Terminals in respect of domestic, import and export cargo. Thus, the main issue that requires our consideration as to whether each activity undertaken by the respondents to their customers is taxable under respective category of service or whether the entire gamut of activities performed by the respondents is classifiable under cargo handling services during the period 01.04.2009 to 30.06.2012 and as a bundled or composite service for the period 30.06.2012 to 31.03.2015.

23. We find that the respondents’ defence, in brief, is as follows.

(i). while the respondent provided services to more than 400 parties during the period of dispute, SCN dated 10.10.2014 has considered services provided to only eight (8) parties mentioned therein; the show cause notice reads the contracts in a skewed manner ignoring the fact that the customers are free to choose from the services; Hon’ble supreme Court held in the case of Mahindra & Mahindra 1995(76) ELT 481 (SC) that ordinarily the Court should proceed on the basis that the apparent tenor of the agreements reflect the real state of affairs; it is, no doubt, open to the revenue to allege and prove that the apparent is not the real; revenue failed to prove instant case that the agreements were for composite contract rather than individual services as opted by the customers.

(ii). The issue is no longer res-integra and is squarely covered in favour of the Respondent as per the cases relied upon by them.

(iii). Board, vide CircularF.No.B.11/1/2002 TRU dated 01.08.2002 clarified that if lump sum amount is charged for both transportation and cargo handling, the tax will be payable on the entire amount. On the other hand, if the bill indicates the amount charged for cargo handling and transportation separately on actuals basis (verifiable by documentary evidence), then the tax would be leviable only on the cargo handling charges.

(iv). The Department has failed to establish that the essential character is derived from Cargo Handling Service and not Goods Transport Agency Service.

(v). Revenue must find out the essential character of the service for the purposes of bringing the assessee within the frame work of the said activity, as held in Salem Starch & MFR’s Service Industrial Co-op Society Ltd 2014 (33) STR 16 (Mad.); Since the Revenue failed to discharge its onus, the proposal to classify CHS as essential service is correctly rejected by the Adjudicating authority; the act of the department to consider CHS as essential service is contrary to Section 66F of the Finance Act,1994; in the present case though under one contract the service is clearly identifiable and as such service can be classifiable under 66(1).Invocation of Section 66(3) itself is bad in law.

(vi). Entire demand is barred by limitation.

24. We find that the entire case hinges on the contracts that are entered into by the respondents with their customers and the manner in which they were operationalized. Learned Commissioner finds that firstly, there were contracts wherein separate charges were quoted for providing cargo handling service and service of transportation of cargo by road and railway; accordingly, invoices were raised as per services availed by the customers and Secondly, there were contracts wherein composite rates were indicated for all the services but the contract was later on changed by mutual consent and the composite rate was bifurcated; based on availment of services by the customer, invoices were raised as per mutual understanding.

25. On going through some of the contracts, copies of which are made available by rival parties, it is seen that some contracts, as with M/s Sical Multi Model Services Pvt Ltd, M/s Maruti Suzuki etc are elaborate detailing each item of work, the process, obligations of either party, conditions etc, while contract with some like some M/s Adani Wilmar Ltd; M/s Mahaveer Champas Ltd; M/s Balakrishna Tyres; M/s Jindal Waterways Ltd; M/s Excellent Clearing Agency; M/s J.M. Kothari & sons etc, indicate just the rates for different items of work and/or for different places. However, we find that all the contracts indicate rates for different items of work invariably such as Terminal Handling (Exclusive or inclusive of cargo handling), Rail freight, Road Freight etc. There is no contact where a consolidated amount is quoted for door-to-door logistics. A study of contracts, along with the invoices indicate the tenor of the contracts, that the customers of the respondents are free to choose among the services and pay for the services availed. We find that the Revenue seeks to view the activity as a composite service on the basis of a composite rate quoted in a couple contracts as with M/s Maruti Suzuki and M/s Khanna paper Mills. We find that such an approach taking only a couple of contacts in to account, wherein too rates are indicated and charged on the basis of services availed. Moreover, commissioner finds that the Show Cause notice was given on the basis of about 8 contracts, out of more than 400 contracts.

26. We find that Hon’ble supreme Court in the case of M/s Variety Body Builders 1976 SCC online 180 held that it is well-settled that when there is a written contract it will be necessary for the court to find out there from the intention of the parties executing the particular contract. That intention has to be primarily gathered from the terms and conditions which are agreed upon by the parties. Hon’ble supreme Court held in the case of Mahindra & Mahindra – 1995 (76) ELT 481(SC) that ordinarily the Court should proceed on the basis that the apparent tenor of the agreements reflect the real state of affairs and that when the agreement entered into between the parties is clear and it is not open to the revenue to construe it differently by reading into it something which is not there. We find that the services offered by the respondents are comprehensive multimodal logistics solutions by Road and Rail. It can be seen from the totality of the contracts and Invoices that the respondents and their customers entered in to contracts to provide one or more services as per their requirements. There is no condition in any of the contracts that the customers are required to avail all the services. It is not proper to say that the respondents have artificially bifurcated the charges in to various components. It can also be not said that the main service is cargo handling and other services are incidental to the same. We find that the Learned Commissioner has rightly held that

9.7 I have gone through sample contracts and agreements mentioned in the show cause notices and related invoices and found that the Noticee bifurcated charges for different activities in the invoices. The bifurcation was made with mutual consent of both the parties. I observe that the Noticee followed standard practice of bifurcation of separately identifiable activity for all contracts. SCN alleged that Noticee deliberately bifurcated the composite amount to avail abatements which was ideally classifiable under ‘cargo handling service’ on full value. The purpose of bifurcation was that each and every customer didn’t avail all services provided by the Noticee. Customers availed services of transportation, loading, unloading, stuffing etc. as per their requirement. That is, every transaction was considered as separate scope of work.

27. We find that the learned commissioner discusses the provisions of Section 65(23) of the Finance Act, 1944 and concludes that

9.11 As per the aforesaid definition of Cargo Handling Service under Section 65(23) of the Finance Act, 1994, it specifically excludes services of “mere transportation of goods”. It would be clear from the above definition that when the service of transportation is independent in nature and has no connection to the Cargo Handling Service, it cannot be considered as part of Cargo Handling Service.

28. The allegation against the respondents is that they have provided mainly the service of Cargo handling and all other services were incidental to the same. We find that the impugned order correctly finds that the main service offered by respondents is transportation of cargo rather than cargo handling. A perusal of the contracts would indicate that the rate offered and bills raised for cargo handling is but a miniscule portion of the billed amount. The main character of the service is transportation of goods by road and/or by Rail. We find that the adjudicating authority has given elaborate and reasoned findings as below.

9.12 After perusal of aforesaid definition and Section 65A, I observe that major activity in the entire gamut of activities is that of transportation and cargo handling is only an incidental activity. Even if we go by revenue and charges collected for the entire contract, it is found that major revenue comes from transportation of goods (rail & road) and amount received as ‘cargo handling charges’ is very minimal. Taking one of contracts as an example, in respect of Contract entered into with M/s Balakrishna Tyres, the Noticee provided service of terminal handling service, transportation of cargo by road and transportation of cargo by rail. In providing the above three different services, the Noticee charged Rs 2,000/- for Terminal Handling Charge, Rs. 19,000/- for Road Transportation Charge and Rs.30,500/- for Rail Charges which amounted to Rs. 51,500/- in total for providing all the three services. It can be seen that Terminal Handling charges which falls under ‘Cargo handling service’ is very nominal amount, consisting only 3.88% of the total charges and majority of the revenue generated from transportation by road or rail. Like-wise, in respect of contract entered into with M/s Mahavir Chemplast Pvt Ltd, the Noticee provided all the three services i.e. terminal handling service, transportation of cargo by road and transportation of cargo by rail as well. In providing the above three different services, the Noticee charged Rs. 3,500/- for Terminal Handling Charge, Rs. 18.390/- for Road Transportation Charge and Rs. 28,000/- for Rail Charges which amounted to Rs. 49,890/- in total for providing all the three services. It can be seen that Terminal Handling Charges which falls under ‘cargo handling service’ is very nominal amount, consisting only 7% of the total charges and majority of the revenue generated from transportation by road or rail.

9.13 Therefore, it cannot be considered that transportation is the purpose of loading and unloading but the contrary is true. That is loading and unloading is for transportation. To qualify for a service under Cargo Handling Service, transportation part should be incidental contrary to that in the present case, terminal handling service is incidental to transportation service. Any person dealing with the situation perceives the services as one for transportation and not for loading and unloading. Every contract is to be construed with reference to its object and the whole of the terms. The whole context must be considered to ascertain the intention of the parties.

9.14 The Noticee contended that the services of cargo handling and transportation of goods were independent in nature and did not have a common essential character. The Noticee referred to Departmental Circular No. B11/1/2002-TRU dated 1-8-2002 wherein it was clarified that if the cargo handling service, and transportation service has been charged on a lump sum basis, then tax is charged on the entire amount (lump sum amount), but if the cargo handling service and the transportation service has been charged separately in the bill, then the tax would be leviable only on the Cargo Handling Charge and not on the transport charge since it has to be paid by the service recipient under reverse charge mechanism

9.15 I have gone through the Circular F. No. B 11/1/2002-TRU dated 01.08.2012 relied by the notice. I find that the said circular was issued by the board office at the time of introduction of Cargo Handling service to clarify the levy of cargo handling service in certain situations where multiple services such as transportation, warehousing, port services including cargo handling services were provided. I find that the said circular was withdrawn vide Circular F.No B1/4/2006-TRU dated 19.04.2006 and no more in force during the maternal period, but the gist of the Circular that if the bill indicates the amount charged for cargo handling and transportation separately on actual basis, then the tax would be leviable only on the cargo handling charges under Cargo Handling Service, will remain applicable. Moreover, I find that in the present case, the bifurcation of different activities has been given not only in invoices but also in the contracts. I also find that para 11 of the said circular is relevant to the present case, which is reproduced below:

“11. Another point raised relates to cases where the CFS offers a total package rate, which includes transportation and handling in respect of imported laden containers from Port to CFS. The question is if the cost of transportation is shown separately in the bill raised, will it be excluded from the levy of service tax. If the cost of transportation is claimed on actual basis, then it will not be includible in the taxable value of cargo handling services.”

29. We find that the above findings of the learned commissioner have a legal basis. We find that the Tribunal in the case of Balmer Lawrie & Co. Ltd. 2014 (35) S.T.R. 800 (Tri. – Mumbai) held that

5.1 The C.B.E. & C. vide Circular No. B-11/1/2002-TRU, dated 1-8-2002, inter alia clarified that in case where the Cargo Handling Service and transportation services are rendered and if in the bills raised for the services rendered, transportation is shown separately (on actual basis, verifiable by documentary evidence), the tax would be leviable only on the cargo handling charges. This clarification issued by the Board applies even to the facts of the present appeal. Since the appellant has discharged the Service Tax liability on both these services, the question of leviability of Service Tax on whole amount under one taxable service of Cargo handling is not sustainable in law.

30. We find that the Tribunal in the case of United Shippers Ltd 2015 (37) S.T.R. 1043 (Tri. – Mumbai) held that

5.4 As regards the second issue as to whether in a composite contract for transportation services and cargo handling services which provides for separate rates for these activities, can Service Tax be levied under a single category of cargo handling service, we find that this issue has been settled in favour of the appellant and against Revenue by this tribunal in a number of cases. In Hira Industries Ltd. case, this Tribunal considered a more or less identical issue and held as follows: –

“18. The next issue is the classification of service rendered by the transport contractors whether it is Transportation of Goods or Cargo Handling Service. We are not in agreement with the argument that the service involved is cargo handling service and not transportation service. When there is composite service the service should be classified as per provisions in Section 65A of Finance Act, 1994. As per this section the sub-clause which gives the most specific description is to be adopted. If this criterion fails then the service is to be classified as the service which gives the essential character of the service. This composite service has elements fitting into the definitions of both the services. So recourse is to be taken to Section 65A(2)(b). Here it cannot be considered that transportation is for the purpose of loading and unloading but the contrary is true. That is loading and unloading is for transportation. Any person dealing with the situation perceives the services as one for transportation and not for loading and unloading. So, on this count we are not in agreement with the argument of Revenue.” The same view was taken by this Tribunal in Jet Airways (India) Ltd. v. Commissioner of Service Tax, Ahmedabad [2008 (11) S.T.R. 645 (Tri.-Ahmd.)] and R.K. Transport Company v. CCE, Raipur [2012 (27) S.T.R. 496 (Tri.-Del.)]. Following the ratio of these decisions, we answer this question in favour of the appellant and against the Revenue, in the facts of the case before us. The C.B.E. & C. Circular B/11/1/2002-TRU, dated 1-8-2002 also make this position very clear. In Annexure II to the said circular, in para 4 thereof, it has been clarified if the bills raised for the services rendered indicates the amount charged for cargo handling and transportation separately on actual basis, then the tax would be leviable only on the cargo handling charges. The contracts entered into with the customers show separately the charges towards shipping charges of cargo from Mother Vessel to Dharamtar jetty. Therefore, there is no merit in the contention that transportation charges should be included in the value of taxable services in respect of cargo handling service.

31. Moreover, we find that the unmissable feature of the agreements is the offer given by the respondents for the multimodal Logistics solution for transport of goods; cargo handling is incidental to the transportation by rail/road. We find that the learned Commissioner has correctly evaluated the position of Law by reading the contracts in the tenor and spirit they have been entered in to and executed. We find that department, while treating the individual vivisectable, separately charged services as a bundle of services, could not establish that the essential character of the service is Cargo Handling Service and not Goods Transport Agency Service. Learned Commissioner demonstrated with examples that the essential service, if any, is pf transportation and not of Cargo Handling. We find that Revenue has to find out the essential character of the service for the purposes of bringing the assessee within the frame work of the said activity. We find that department has not discharged its onus and the attempt to classify the services as a composite or bundle of services is contrary to the provisions of the Finance Act,1994. We find that in the impugned case, though all the services are rendered under one contract, individual services are identifiable and are separately charged. Thus, revenue has not discharged burden of proving either that the services are bundled services, not identifiable separately or that the essential character is that of cargo handling. Therefore, we find that there is no merit in the grounds of appeal made by the department.

32. We find that Hon’ble High Court at Madras, in the case of Salem Starch & MFR’s Service Industrial Co-op Society Ltd 2014(33) STR16(Mad.), held that: .

15. The case of the Department is that the nature of services accepted by the assessee included receiving of goods from the principal, warehousing of the goods, receiving the dispatched orders from the principal, arranging dispatch of goods as per the directions of the principal, maintaining records of the receipt and dispatch of goods and the stock available at the warehouse and preparing invoices on behalf of the principal. As far as the parameters which are contained in Circular dated 11th July 1997, as applicable to the facts of the case is concerned, as already seen from the extract of the Commissioner’s order, it is no doubt true that the assessee prepared invoices on behalf of the principal. The invoice consisted of the amount payable to the Society by way of storage charges, testing charges and other handling charges. We do not find any material herein to hold that the assessee was having any responsibility for receiving the goods from the factory or from the premises of Principal or his agents. It is only the principal who brought their products to the doorsteps of the assessee to make use of the common market platform provided by the Society for its members and on the request of the principals for warehousing of the goods the assessee offered the storage facility. It is a matter of record that for the purpose of auction sale, on receipt of the goods, the same was sorted out according to the quality testing and kept in a lot in the godown. A lot number was assigned and stacked. The samples were drawn for quality testing as well as to display in the tender hall. Once tenders were received, they were opened. On opening, the highest rate offered for each lot was displayed. On confirmation from the principal on the price offered, the sale was confirmed. Thereupon, the buyer took delivery of the goods.

16. As far as maintenance of records were concerned, there is no denial of the fact that the assessee-maintained records on receipt of the amount and the stock received and available after the sale. On a reading of the nature of activity thus rendered by the assessee, it is clear that except for receiving the goods which were brought to its door steps by its Principal and displaying the goods received for sale, practically, nothing else was done by the assessee in the matter of taking the goods from the Principal and for further dispatching of the goods to the buyer by engaging transporter or on its own transporter. The conduct of the assessee, handling the goods on receipt raising invoices on sale or maintaining of the records as to the stock availability, at best, showed it only as an agency offering storage facility. This act, per se, does not convert the assessee’s transaction as that of a clearing and forwarding agency. Thus, when the burden is on the Revenue to prove that the assessee, in fact, received the goods from the premises of the Principal and arranged dispatch of goods as per the directions of the Principal by engaging transporter on its own or through various transporters, we have no hesitation in accepting the submission of the assessee that the nature of transactions viz., dispatching of goods and offering storage facilities by the assessee, does not fit in with the criteria given in the circular to treat the assessee as a clearing and forwarding agent. As pointed out by the learned counsel appearing for the assessee, the nature of activity is a composite one, enabling the Principal to bring the products to the assessee’s premises and the assessee giving financial facility to the members, so that, ultimately on the sale of sago, on the receipts received by the assessee on behalf of the Principal, the same was settled after deducting whatever amounts were due to the assessee on the advance payment made by the assessee to the principal. Thus, providing a platform for the sellers and buyers to meet in a common place, providing a storage facility to the manufacturer, the financial help rendered to the members and organising of the sale of the products, per se, do not, in any manner take the assessee anywhere near the activities discharged by a clearing and forwarding agent. Thus, going by Section 65A(2) of the Finance Act, the essential predominant character of the activity being one of facilitating the sale of the products, apart from providing storage facilities, the view of the Revenue that the nature of activity, per se, has to be tested from the point of facilitating the sale, thereafter, could not be sustained. In any event, even as per the conditions prescribed in the circular dated 11th July 1997, we do not find that the nature of activity undertaken by the assessee could be brought under ‘clearing and forwarding agency’. Thus, the incidental services offered in the transaction in arranging the transporting of the goods to the buyer would not, however, decide the nature of the transaction as one of clearing and forwarding agency.

32. Coming to the period after 01.07.2012, after the negative list regime is introduced, as per the Explanation to Section 66F of the Finance Act, 1994, “For the purposes of sub-section (3), the expression “bundled service” means a bundle of provision of various services wherein an element of provision of one service is combined with an element or elements of provision of any other service or services. As per the definition, in order to constitute Bundled Services, there should be provision of various services; such provision of various services should be provided combined with an element of one service with other and such combination be offered as per the nature of service or as a general trade practice. Learned Adjudicating authority finds that

9.26 Further, if the service provider clubs various service to provide a single service to the receiver and if such single service finds place in the statute book as a separate entry vide Negative list or Mega exemptions or declared services, then the service would be classifiable under that specific entry instead of applying the provisions of bundle of services. Example a software development service which includes implementation and training. Only if the single service is not finding a specific entry in statue, then the concept of bundle of services would be applicable and taxability to be determined as explained below. Example Child care services which include pick up and drop, food in the afternoon etc.

9.27 Thus, for services to be naturally bundled in the ordinary course of business, services provided should be such that they will not serve purpose if provided separately and cannot be provided individually. As also discussed in above paras, in the present case, each and every activity provided by the Noticee is separately identifiable and voluntary for customer to avail or not to avail, hence, it cannot be treated as bundled service. Therefore, the legal position will remain same during pre- negative list and post-negative list, as the character of service did not change.

33. Thus, we find that post 01.07.2012 also the essential elements of services being same, remaining separately identifiable and separately charged, Revenue has not made out any case for bundling of the Services. We find that Revenue has not made out any case, with evidence to controvert the findings of the adjudicating authority. We find merit in the finding of the adjudicating authority that even if the agreement is to be treated as composite/bundled, then transportation by Rail being the major service, it is the Rail transportation that gives the essential characteristic to the services rendered by the respondent. In such a situation, the respondent could have ended paying lesser tax, if rebate is taken in to account and there too the entire liability would have been on the recipient of the service. Moreover, we find merit in the argument of the respondents that the service tax paid for Rail and Road transport under GTA, has been accepted by the respective jurisdictional officers and the assessments have attained finality. Demanding the tax again on the same under the guise of composite or bundled services, amounts to double taxation. We find that the Adjudicating Authority correctly as per Section 65(A) (pre- negative list), under the sub-clause that provides the most specific description and under Section 66(F) (post negative list).

34. We find that the learned counsel for the appellants has also raised the issue of limitation in respect of the show cause notice dated 10.10.2014. We find that the show cause notice was issued covering the period 01.04.2009 to 30.09.2013. However, we find that no case of suppression, omission or failure to disclose any material information, collusion etc. with intent to evade payment of duty, has been brought forth with supporting evidence. The appellants are regularly paying the service tax and filing ST-3 Returns and no irregularities were noticed or communicated by the Department. Moreover, we find that the issue relates to interpretation of statutory provisions and therefore, extended period cannot be invoked. Further, looking into the fact that service tax stands discharged on each of the items of work which the Department tries to group/ bundle together, intent to evade payment of service tax cannot be alleged. We find that Revenue did not establish the burden to prove tax evasion with cogent, tangible and positive evidence. Therefore, we are of the considered opinion that Revenue has not made out any case for invocation of extended period.

35. In view of the above, we are of the considered opinion that the Revenue did not bring out any substantial evidence or provisions of law that render the impugned order liable to be set aside. We- find that no case is made by the Revenue so as to require the revision of the impugned order by this Bench. We find that the impugned order is a reasoned, logical and thus legally maintainable. Thus, we do not find any merit in the appeal filed by the Revenue. Accordingly, the appeal is dismissed.

(Order pronounced in the open court on 09/03/2026)