Cargo handling service includes mechanical loading of coal into tippers for transport within a mining area

Loading, unloading and handling coal within a mining area by pay-loaders and tippers was treated as cargo handling service under section 65(23) of the Finance Act, 1994. The operative distinction applied was that goods become cargo once they are put into the mode of transport, and coal loaded into tippers for movement within the mining area was therefore within the taxable entry. Mechanical loading was not excluded from the definition, and the fact that the movement took place inside the mines did not remove the activity from tax. The challenge to taxability accordingly failed.

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Issues: Whether the activity of loading, unloading and handling coal within the mining area by using pay-loaders and tippers falls within the taxable category of cargo handling service.

Analysis: Cargo handling service under Section 65(23) of the Finance Act, 1994 covers loading, unloading, packing, unpacking and incidental handling of cargo. The decisive question was whether coal handled inside the mines remained mere goods or had assumed the character of cargo. Relying on the distinction drawn in the cited precedent between goods and cargo, and on the view that once goods are put into the mode of transport they become cargo, the activity of loading coal into tippers for movement within the mining area was treated as cargo handling. The definition does not exclude mechanical loading, and the fact that the movement occurred within the mines did not take the activity outside the taxable entry.

Conclusion: The activity is taxable as cargo handling service and the assessee's challenge fails.

Ratio Decidendi: Goods intended for transport become cargo when loaded for conveyance, and loading or unloading of coal by mechanical means within the mining area is covered by the taxable entry of cargo handling service.

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