2018 (5) TMI 838 - AT - Service Tax

Appellant wins on cargo handling tax, liable for renting immovable property tax under service category.

Orient Paper Mills Versus CCE, Bhopal

Orient Paper Mills Versus CCE, Bhopal - TMI Issues:Imposition of Service Tax on amount received for providing railway siding facility and Cargo Handling Services. Interpretation of 'Cargo Handling Services' under Section 65(23) of the Finance Act, 1994. Liability for Service Tax under 'renting of immovable property service' under Section 65(90a) of the Act.Analysis:The appeal was filed against an Order in Appeal passed by the Commissioner (Appeals), Central Excise, Bhopal, regarding the imposition of Service Tax on the amount received by the appellant for providing railway siding facility and Cargo Handling Services. The Department contended that the activity of lifting and transporting coal ash/bed ash falls under 'Cargo Handling Services' as per Section 65(23) of the Finance Act, 1994. However, the appellant argued that they had made a contract with parties for the transportation of coal ash/bed ash, where all arrangements were provided by contractors, and the appellant charged a nominal amount under the head 'Coal Ash/ Bed Ash on account of providing railway siding facility as per trip basis.'The definition of 'cargo handling services' under Section 65(23) includes loading, unloading, packing, or unpacking of cargo but excludes handling of export cargo or passenger baggage or mere transportation of goods. The appellant's contract showed that they did not provide transportation or labor for the work, as all arrangements were made by the contractor. Therefore, it was concluded that the appellant did not provide cargo handling services for the transportation of coal ash/bed ash, leading to the appeal being allowed on this point.Regarding the renting of immovable property, as per Section 65(90a) of the Act, it includes renting, letting, leasing, or similar arrangements for use in business or commerce. The appellant failed to provide evidence that they rented out the railway siding without transfer of possession or control, which would have been exempt from service tax prior to 16.05.2008. As the appellant did not produce evidence that they maintained and controlled the railway sidings during the disputed period, they were held liable to pay service tax under the category of 'renting of immovable property service' along with interest and penalty, with any amount already paid to be adjusted.In conclusion, the appeal was partly allowed, and the appellant was found liable to pay service tax under the 'renting of immovable property service' category due to the lack of evidence supporting their claim of renting out the railway siding without transfer of possession or control.