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of <h1>Tribunal Grants Stay on Service Tax Demand for Coal Transport Charges</h1> <h3>WESTERN COALFIELDS LTD. Versus COMMISSIONER OF CENTRAL EXCISE, NAGPUR</h3> WESTERN COALFIELDS LTD. Versus COMMISSIONER OF CENTRAL EXCISE, NAGPUR - 2014 (36) S.T.R. 1302 (Tri. - Mumbai) Issues:- Demand of service tax on surface transport charges under the head of 'Cargo Handling Services'- Applicability of service tax on surface transport charges in the sale of coal- Interpretation of sale value including surface transport charges for excise duty and sales tax- Consideration of captively consumed activities in relation to manufacture and sale- Comparison with the judgment in Mahanadi Coalfields case- Time bar for the demand of service taxAnalysis:The judgment pertains to seven stay applications filed by the Applicant for waiver of pre-deposit of adjudged dues confirmed by the Ld. Commissioner, Central Excise, Nagpur. The common issue in all cases is the demand of service tax on surface transport charges under the head of 'Cargo Handling Services.' The Ld. Counsel for the Applicant argued that as they are engaged in mining and sale of coal on a principal-to-principal basis, they are not a cargo handling agency, and the surface transport charges are part of the sale value of coal, attracting excise duty and sales tax, not service tax. The Ld. A.R. for the respondent contended that the surface transport charges for loading, unloading, and transport of coal fall under cargo handling services, justifying the service tax demand.The Tribunal analyzed the activities of the Applicant, primarily engaged in coal mining and sales, where various activities are absorbed in the sale of coal. The invoices showed surface transport charges as part of the sale value, on which excise duty and sales tax were paid. Referring to the Bharat Sanchar Nigam Ltd. case, the Tribunal held that no service tax is leviable on the sale of goods. It further explained that in the sale of manufactured goods, all charges up to the place of removal are included in the transaction value, precluding service tax on the sale value of coal.Regarding the reliance on the Mahanadi Coalfields case, the Tribunal found the facts similar and applicable to the present case. On the issue of time bar for the demand, the Tribunal noted that the Applicant had been compliant with excise duty and service tax provisions, indicating no suppression of material facts. Consequently, the Tribunal granted unconditional stay to the Applicant, waiving the pre-deposit of adjudged dues, based on a strong prima facie case established by the Applicant.In conclusion, the Tribunal's detailed analysis focused on the nature of the Applicant's activities, the inclusion of surface transport charges in the sale value of coal, and the legal precedents supporting the non-applicability of service tax on such transactions. The judgment emphasized compliance with excise duty and service tax provisions, leading to the decision to grant a waiver of pre-deposit and an unconditional stay to the Applicant.
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