In this case contract is essentially for the transportation of goods which incidentally involving loading of tipper/unloading of tipper at Railway Track head/Railway Siding which cannot be taxed under the category of Cargo Handling Service simply because rates for loading of tipper at Dump Yard and unloading of tipper at Railway Siding is not provided separately. The Learned Commissioner (Appeal) has erred in placing reliance on Circular No.B11/1/2002-TRU dated 01-08-2002 which does not apply to the facts of the instant case. Further, it is no body’s case that the Appellant is a Cargo Handling Agent to attract the levy under the category of Cargo Handling Services.
FULL TEXT OF THE CESTAT JUDGEMENT
This Appeal arises out of the Order-in-Appeal No. 05/ST/B-II/2009 dated 30 January 2009 passed by the Learned Commissioner (Appeal) of Central Excise, Customs & Service Tax, Bhubaneswar.
2. The facts of the case in brief are that during the period under dispute i.e. January’ 2005 to December’2005 the Appellant executed composite activity of local transportation of Iron Ore from mines dump yard to the Rail Track Heads/Railway Siding upto lead of 1/2 km in Automated Tipping Trucks (goods carriage), with incidental loading into such tipping trucks & automated unloading at the Railway Track Head/Railway Siding.
3. The automated tipping trucks are fitted with Hydraulic Jack facility for automatic unloading without any human intervention. The Appellant prepares bills for “local transportation” on their client. Department has confirmed Service Tax demand of Rs.18,50,827/- on such activities. It appears from Page 16 & Page 17 of the Show Cause Notice dated 01-02-2007 that the said transportation for short distance is treated by the department as “Shifting” for short distances which the Appellant has claimed to be transportation but as per the show causing authority, it cannot be transportation activity but Cargo Handling activity. As per Para 8 of the show cause notice the rate is composite and no charges for loading, unloading is collected separately by the Appellant. On perusal of the quantification of demand placed at Annexure-1 of the show cause notice (Page 309) it appears that there are separate contract for local transportation and wagon loading activities and the two contracts are distinct & separate and in the instant case service tax is already paid by the Appellant on the wagon loading activities but no service tax is paid on the transportation/shifting activities on which service tax is now demanded.
4. The Learned Advocate for the Appellant Shri Kartik Kurmy took us through the bills raised by the Appellant for wagon loading and Local Transportation/Shifting to demonstrate that the wagon loading contracts and local transportation contract are separate. The Appellant has already discharged service tax on wagon loading activities. In the show cause notice service tax is demanded only on the local transportation/shifting work (with incidental loading of tippers and automated unloading at Railway Track Head).The Learned Advocate further submits that the Learned Commissioner(Appeal) in the impugned Order under Para 33 following the Board Circular No.B11/1/2002-TRU dated 01-08-2002 (Para 4) has sought to tax the entire consideration under the category of “Cargo Handling Services” on the ground that for loading of tippers, transportation and unloading of tippers at the Railway Track Head/Railway Siding, there is no separate rates provided, therefore, as per the said circular the entire consideration shall be taxable under the category of Cargo Handling Services. The Learned Advocate submits that they are transporter and not Cargo Handling Agents and to attract the levy unless the twin test of handling of “cargo” by a “Cargo Handling Agent” are not satisfied, no tax can be demanded by implication and without clear authority of law. In the instant case it is nobody’s case that the Appellant is a Cargo Handling Agent. The Learned Counsel further relied upon the decisions of this Tribunal in the case of Shri Raj Coal Carriers P. Ltd. Vs CCE vide Order dated 24-04-2019 bearing No. FO/75464/2019 in Appeal No.ST/158/2009, M/s Lakhanpur Coal Carriers Vs CCE vide Order dated 24-04-2019 bearing No.FO/75466/2019 in Appeal No.ST/159/2009 and Khanduja Coal Transport Company Vs CGST reported in 2019-TIOL-1018-CESTAT-DEL to contend that transportation for short distance cannot be taxed under the category of Cargo Handling Services but as transport services. The Learned Advocate further relied upon judgment of the Hon’ble Supreme Court in the case of CCE Vs Singh Transporters reported in 2017-TIOL-249-SC-ST to contend that transportation for short distance is taxable as transportation service. The Learned Counsel also contended that the demand is barred by normal period of limitation.
5. The Learned Authorized Representative for the Respondent supports the impugned Order. It is contended by the Learned Authorized Representative that since the contract is composite for loading of tipper, transportation upto 1/2 km and unloading at Railway Track Head and under the contract the rate is composite, hence, as per Circular No.B11/1/2002-TRU dated 01-08-2002 the entire transportation charges shall be taxable under the category of Cargo Handling Services.
6. Heard both the sides and perused the appeal records.
7. We find from Page 16, 17 & 18 of the show cause notice that service tax is demanded only on the local transportation/shifting charges collected by the Appellant which is inclusive of loading of tipper, transportation upto Railway Track Head and automated unloaded of tipper at the Railway Track Head. A perusal of the show cause notice shows that the demand in the instant case is on the “Work of Shifting of Iron Ore Lumps and Fines from Dump Yard to Railway Siding” which involved loading at Dump Yard, transportation and unloading at Railway Siding. The Appellant has already paid service tax on wagon loading activities which is clear from the quantification made in the show cause notice.
8. We find that the contract is essentially for the transportation of goods which incidentally involving loading of tipper/unloading of tipper at Railway Track head/Railway Siding which cannot be taxed under the category of Cargo Handling Service simply because rates for loading of tipper at Dump Yard and unloading of tipper at Railway Siding is not provided separately. The Learned Commissioner (Appeal) has erred in placing reliance on Circular No.B11/1/2002-TRU dated 01-08-2002 which does not apply to the facts of the instant case. Further, it is no body’s case that the Appellant is a Cargo Handling Agent to attract the levy under the category of Cargo Handling Services.
9. We accordingly, set aside the impugned Order and allow the Appeal with consequential relief(s) to the Appellant.
(Order pronounced in the open court on 22 October 2019.)