Waste transport, not cargo handling, applies where fly ash removal is incidental to factory operations and not taxable service.

Removal, loading, transportation and dumping of fly ash and economizer ash from factory premises was held to be predominantly transport of waste material, not cargo handling service. The waste was collected directly by tippers or trucks from below boilers and carried to dumping pits or deserted mines, so it did not answer the ordinary meaning of cargo. Incidental references to loading, unloading or handling in the contract did not change the true character of the activity. The demand for tax was therefore unsustainable.

---

---

Issues: Whether the removal, loading, transportation and dumping of fly ash and similar waste material from the factory premises to dumping yards amounted to taxable cargo handling service under Section 65(23) of the Finance Act, 1994.

Analysis: The service in question was essentially the removal of fly ash and economizer ash generated in the course of manufacture so that production could continue uninterrupted. The material was collected directly by tippers or trucks from below the boilers and transported to dumping pits or deserted mines. On these facts, the activity was held to be predominantly transportation of waste material rather than cargo handling. The waste product was not treated as cargo within the ordinary meaning of that expression, and the presence of words such as loading, unloading, handling and transportation in the contract did not alter the true character of the service. Following the earlier view that mechanical loading and overwhelmingly transport-oriented contracts do not become cargo handling merely because incidental loading or unloading is mentioned, the demand could not be sustained.

Conclusion: The service was not taxable as cargo handling service and the demand was unsustainable.

---