Appellate tribunal overturns service tax liability on fly ash transportation, emphasizing primary engagement and mechanized loading.

M/s. Tripathi Transport Company Versus C.C.E. Bhopal

M/s. Tripathi Transport Company Versus C.C.E. Bhopal - 2017 (5) G. S. T. L. 384 (Tri. - Del.) Issues:
1. Whether the services rendered by the appellant to the client are liable for service tax under the category of 'Cargo Handling Service'Rs.
2. Whether the loading and transportation of fly ash by the appellant constitute cargo handling service subject to service tax liabilityRs.

Analysis:
1. The appeal challenged an order confirming service tax liability against the appellant for loading and transportation of fly ash. The appellant contended that they were primarily engaged in transportation, not cargo handling, as per their agreement with the client. The appellant argued that the loading process was mechanized at the supplier's plant, and they were not involved in labor or equipment for loading. The appellant strongly relied on the terms of the agreement and statutory definition to support their position.

2. The Revenue argued that the appellant was engaged in handling cargo at both loading and unloading points, justifying the service tax liability. The contract specified loading as part of the work, along with liaisoning and transportation. The Revenue contended that the appellant's involvement in loading and unloading activities subjected them to service tax. However, the appellate tribunal analyzed the facts and found that the transportation charges were the primary consideration, with unloading charges being a small percentage. The tribunal noted that the loading was mechanized, and the appellant's role was limited to transportation over a significant distance of 300 KM. The tribunal concluded that the service tax liability based on cargo handling services was not factually sustainable and set aside the impugned order.

3. The tribunal emphasized that the contractual agreement focused on transportation, with loading being a minor aspect. The tribunal highlighted that the loading process was mechanized, and the appellant's contribution was limited to transportation. Considering these factors, the tribunal concluded that the service tax liability under cargo handling services was not justified. Therefore, the appeal was allowed, and the impugned order was set aside.