Mining reclamation work is outside cargo handling service; service tax demand and pre-deposit requirement were set aside.

Activities carried out in a mining area for reclamation of iron ore fines and removal of rejects after blasting were held not to constitute cargo handling service, because the work was connected with mining operations and not with handling cargo in the service-tax sense. The Tribunal followed its earlier ruling on an identical contract involving the same principal and applied the same classification reasoning. As the levy failed on classification, the pre-deposit requirement was waived and the impugned order was set aside, with the service tax demand based on cargo handling classification failing accordingly.

---

---

Issues: Whether the activities undertaken in a mining area for reclamation of iron ore fines and removal of rejects after blasting were classifiable as cargo handling service and, if not, whether the demand and pre-deposit requirement could stand.

Analysis: The activities were performed in the mining area in connection with reclamation and removal of mining rejects, and were not shown to involve handling of cargo in the sense required for service tax classification under cargo handling service. The Tribunal followed its earlier decision on an identical contract involving the same principal, where similar work was held to fall outside the scope of cargo handling service.

Conclusion: The activities did not fall within cargo handling service, the pre-deposit requirement was waived, and the impugned order was set aside.

Final Conclusion: The service tax demand based on cargo handling classification failed, and the appeal was allowed.

---