Cargo handling versus coal transportation dispute ends with waiver of pre-deposit and stay of recovery during appeal

A contract described as cargo handling was challenged on the ground that it was in substance transportation of coal, with loading and unloading only incidental to transit. On that basis, the Tribunal waived pre-deposit of the demanded service tax, interest and penalties, and stayed recovery during pendency of the appeal. The stay petitions were allowed.

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Issues: Whether the applicants were liable to pre-deposit the service tax, interest and penalties demanded on the allegation that their contract constituted cargo handling service, or whether the contract was essentially for transportation of coal and the loading and unloading activity was only incidental.

Outcome: The Tribunal granted waiver of pre-deposit of service tax, interest and penalties and stayed recovery during pendency of the appeal, allowing the stay petitions.

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