AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (7) TMI 563
X X X X Extracts X X X X
X X X X Extracts X X X X
...."terminal charges" collected by them from various Airline companies for the facilities provided in the AIR Cargo Terminal attract service tax for "storage and warehousing" provided under section 65(102) of the Finance Act, 1994 (hereinafter called "the Act"). We have heard Senior counsel Sri Joseph Kodianthara appearing for the appellant-company and Standing Counsel Sri Thomas Mathew Nellimoottil appearing for the respondent. 2. Appellant is maintaining an Air Cargo Terminal very close to the Trivandrum Airport. Air cargo for export and passenger baggage for transport by Air are brought to the terminal maintained by the appellant where the Airline officials or the employees or agents of the cargo owners unload, X-ray and transport the good....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that irrespective of the period of storage, appellant is liable to pay service tax for "storage and warehousing" under section 65(102) of the Act. It is against this order the appellant has come up with this appeal. 3. In order to appreciate the contentions, we have to refer to the two charging entries relevant, in this regard which are extracted hereunder: "Section 65(102) "Storage and warehousing" includes storage and warehousing services for goods including liquids and gases but does not include any service provided for storage of agricultural produce or any service provided by a cold storage. Section 65(23) "Cargo handling service" means loading, unloading, packing or unpacking of cargo and includes,- (a) cargo handling....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o service tax is payable for cargo handling service in respect of export cargo and passenger baggage. The appellant's specific case is that terminal charges collected by them for export cargo and passenger baggage falls within the description "cargo handling services" and so much so, by virtue of the exemption available to these two items under section 65(23), there is no justification for the department to levy service tax by treating the cargo handling service as a "storage and warehousing service". Standing Counsel brought to our notice the admission made by the appellant in the appeal that appellant or their employees are not handling cargo and they are only providing the terminal building for handling both the Air cargo as well as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d the time taken by the Airlines to lift the cargo could be treated as storage and warehousing for the purpose of levy of tax under section 65(102) of the Act. 5. The contention raised by Standing Counsel that goods are not physically handled by appellant's employees by itself does not mean that appellant is not handling the goods in the terminal building. X-ray unit is in appellant's terminal and customs formalities including inspection are carried out in the said building. The unloading of goods, X-raying, customs inspection and re-loading amount to handling of goods in transit in the course of export, whether it be as cargo or as passenger baggage. What the appellant charges is for the facilities provided in the terminal buildin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. Counsel for the appellant has referred to Circular No. B 11/1/2002, dated 1-8-2002 issued by Central Board specifically providing in clause 3(1) that the services provided in relation to export cargo and passenger baggage are excluded from tax net. However, contention of the Standing Counsel is that the Circular is issued specifically clarifying the scope of exemption under cargo handling services provided under section 65(23) of the Act. Even though Circular is issued with reference to another charging section, what is clear from the Circular is that the intention of the Government is as far as possible to avoid incidence of tax on export cargo and passenger baggage. 6. After hearing both sides and after going through the orders and re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot be treated as charges collected for storage or warehousing of goods. However, if on examination of the records and the appellant's operation with the Airlines the department notices that varying charges are levied, though under the common head terminal charges, then so much of the amount charged in excess of the normal charges for clearance without delay, can be subject to levy of service tax under section 65(102) of the Act. The appeals are allowed in part reversing the findings of the Tribunal that terminal charges levied by the appellant attracts service tax under section 65(102) of the Act, but with the finding that additional charges if any levied over standard rates for handling and clearance of goods within 48 hours can be tre....