CESTAT, AHMEDABAD BENCH
Commissioner of Central Excise, Rajkot
Abbas J. Chavda
Order No. A/1632/WZB/AHD./2012
Appeal No. ST/423/2012
October 5, 2012
1. This appeal is directed against the Order in Appeal No. 319/2012/COMMR(A)/RBT/RAJ DATED 06/06/2012.
2. The issue in brief is that during the course of audit of one of the service providers for the period from October, 2004 to March, 2009, the Revenue authorities found that the Respondent herein was rendering taxable services related to loading, unloading and stevedoring to M/s. J. M. Baxi & Co, under the category of ‘Cargo Handling Service’. It was noticed by the departmental officers that the appellants have not discharged Service Tax liability of such services during the aforesaid period. Coming to such conclusion, show-cause notice was issued to the appellants to show cause as to why the demands of service tax should not be confirmed on them along with interest and also for imposition of penalties.
3. The Respondent herein contested the matter on merits by filing reply to the show-cause notice.
4. The Adjudicating Authority after following due process of law confirmed the demands with interest and imposed penalty on the Respondent.
5. Aggrieved by the order, respondent preferred an appeal before the First Appellate Authority. The First Appellate Authority after granting personal hearing in the matter, by the impugned order set-aside the demand confirmed by the Adjudicating Authority.
6. The Revenue is in appeal against such an order. The learned Authorized Representative (Commissioner) would submit that the Appellate Authority while passing the impugned order has considered the Respondent as an individual, while that is not so. It is her submission that the Original Adjudicating Authority has over-looked the fact that the respondent, as an individual, cannot earn Rs.50,73,604/- within a period of six months by rendering service of loading and unloading of cargo; the Respondent’s Income Tax Return was not called for and the quantity of loading & unloading indicated in the invoices cannot be ascertained from the appeal filed by the respondent as being delivered in his individual capacity. It is her submission that the Appellate Authority erred to hold the respondent being a sub-contractor, is not liable to service tax for the period prior to 23/08/2007 in light of the Board Circular No.96/7/2007-ST. It is her submission that the Original Adjudicating Authority has over-looked the decision in the case of Niranjan Lal Agarwal v. CCE  34 STT 424 (CESTAT – New Delhi) and Sew Construction Ltd. v. CCE  32 STT 120. It is her submissions that the impugned order to be set-aside and the appeal be allowed.
7. The learned Counsel appearing on behalf of the respondent would support the findings of the First Appellate Authority. He would also draw my attention to the Board Circular dated 1st August, 2002 and submit that the respondent herein was an individual undertaking the activity of loading and unloading of Cargo. It is his submission that the Hon’ble High Court of Jharkhand, in the case of CCE v. Modi Construction Co.  33 STT 161has categorically held that shifting of unfinished and finished goods within the factory premises would not be covered under Cargo Handling Services.
8. I have considered the submissions of both sides. It is undisputed that the respondent herein is an individual rendering services to M/s.J.M. Baxi & Co. as regards loading & unloading of cargo. It is also undisputed that these services are cargo handling services. At the same time, I find that the Adjudicating Authority as well as department representative have not adduced any evidence as to hold that the respondent herein has functioned as a firm and not as an individual. It is the only submission from the department representative that the first appellate authority has not gone into detail as to whether the respondent is functioning as an individual or a firm. The challenge to findings of facts need to be corroborated with evidence by the Revenue. The claim of the respondent who is functioning and rendering services of loading & unloading and stevedoring seems to be correct. If this is so, the first appellate authority’s findings to hold that the respondent is covered under the Board Circular dated 1/08/2002 cannot be faulted with, as the Board Circular categorically clarifies, that if an individual is undertaking activity of loading and unloading of cargo, it would not come under the purview of service tax as Cargo Handling Services. Yet, another angle in this case has been correctly propagated by the learned Counsel by producing the judgment of Hon’ble High Court of Jharkhand in the case of Modi Construction Co. (supra). It is undisputed in this case that the respondent is providing services for loading & unloading within the premises of M/s. J.M. Baxi & Co. The judgment of the Hon’ble High Court of Jharkhand categorically has settled law in as much, that any services provided within the factory premises would not come under the definition of Cargo Handling Services. With respect, I reproduce the entire judgment of their Lordships:
“[Order] – Heard learned counsel for the appellant.
2. The case before us relates to the revenue matter. M/s.Modi Construction Company is handling the goods in the premises of the factory of M/s. Bihar Sponge Iron Ltd. Their act of handling the unfinished and finished goods with the factory premises of M/s. Bihar Sponge Iron Ltd. covered under the category of “Cargo Handling Services”, according to the appellant .
3. We have given our considered opinion to the submission of the learned counsel. As per sub-section (23) of Section 65 of the Act, cargo handling service means loading, unloading, packing or unpacking of cargo. The definition does not in any way can be considered to cover handling of goods within the factory premises because cargo, according to the dictionary meaning of the expression, means ‘loaded or unloaded on a truck, aircraft and ship’.
4. In that view of the matter, since the activity of: shifting the goods finished and unfinished goods within the factory premises could not come within the definition of cargo handling service and, therefore, this kind of service activity could not be termed as service activity.
5. In that view of the matter, there is no forceful merit in this appeal and it is accordingly dismissed”.
9. In view of the foregoing reasons and in the facts and circumstances of this case, I find that the impugned order of the First Appellate Authority is correct and legal and does not suffer from any infirmity. The appeal filed by the Revenue is devoid of merits and is rejected.