TaxTMI 
TaxTMI 
2011 (11) TMI 358
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 200/- per day under Section 76; Rs. 1000/- under Section 77 and Rs. 1,14,11,440/-under Section 78 The issue involved in these Appeals is common, therefore, they are taken up for disposal, together. 3. Briefly stated facts of the case are that the Appellants are engaged in loading/unloading of coal on a contract with M/s. Western Coalfields (here-in-after referred as WCL). The loading of coal is done on tippers by hiring pay-loaders and by using manual labour and the tippers transport coal from one place within the mining area to another place and unload it there. The officers of DGCEI working on intelligence found that the appellants were providing service under the category of 'Cargo Handling Service', however, they did not obtain the Service Tax Registration and did not discharge the Service Tax liability on the amounts received from their clients. Proceedings were initiated against the Appellants and accordingly, show-cause notices were issued demanding Service Tax by invoking the extended period of time under the provisions of Section 73(1) of the Finance Act, 1994 on the ground that the Appellants had willfully suppressed the fact of loading of coal undertaken by it at....
X X X X Extracts X X X X
X X X X Extracts X X X X
....support of their contention, they also placed reliance on the amendment to definition of 'Cargo Handling Service'; vide Finance Act, 2008 with effect from 16.05.2008. 4.4 The contention is that the definition is not to be taken as destroying the essential meaning of the term defined. The definition is merely employing apt and readily intelligible words. Thus, the term, 'cargo handling agency' service cannot be construed in a manner so as to extend it beyond the natural import and legislative intent behind the definition. 4.5 The contention is that the Appellants are ex-servicemen companies. They are incorporated pursuant to a Memorandum of Understanding (MoU) entered into between the Ministry of Energy and Ministry of Defence in 1979. The shares of the Appellants are held by War Widows and Disabled Soldiers. The aim of the MoU was to provide union free captive transport organizations to various coal companies under the Department of Energy and at the same time, provide a source of income for ex-servicemen who are registered with the Director General of Rehabilitation, Ministry of Defence, New Delhi. Thus, it is clear that the Appellants, by no stretch of imagination, are unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ded period is not invocable in this case on the part of the Appellants, therefore penalty is not imposable against the Appellants. 5.1 As regards the contention of the Appellant that there is a composite contract with WCL both for loading/unloading and transportation and the contention of the Appellant, that the contract is basically one of the transportation of coal within mining area, and loading and unloading are only incidental to transportation, the ld. Jt.CDR submitted that the contention is not factually correct. In this regard, he has drawn our attention to page 13 of the Appeal of M/s. Gangadharan Bulk Movers Pvt. Ltd., from which it is revealed that the work order dated 24.02.2007 consists of two jobs. The first job is for loading and unloading of coal for which they are paid @7.65 PMT, and the second part of the contract is that of transportation of the coal from one place to another for which they are paid Rs. 64.69 PMT and had it been a composite order for mere transportation of goods, there would be no need for showing the two jobs separately with separate rates. In the present case, the demand is confined to the first part of the work order viz. loading & unloadin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r : (a) "65(105) "taxable service" means any service provided or to be provided, - i. ** ** ** (b) (zr) to any person, by a cargo handling agency in relation to cargo handling services;" (c) In view of declaration of law as above, meaning of the term "cargo handling service" was provided by Legislature in Section 65(23) of the Act, which reads as under : 65(23) "cargo handling service" means loading, unloading, packing or unpacking of cargo and includes cargo handling services provided for freight in special containers or for non-containerised freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport and cargo handling service incidental to freight, but does not include handling of export cargo or passenger baggage or mere transportation of goods. A conjoint reading of provisions of section 65(105)(zr) and 65(23) of the Act show that cargo handling agencies are taxable entities. Cargo handling service provided by such entities attract the levy of service tax. Section 65(23) has a wide amplitude and has brought all like nature activities to its fold expressly and by inclusion of such l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ne on tipper by hiring pay-loader and the tippers and the coal is transported from one place within the mine area to another place, and thereafter the coal is unloaded. The Appellants have contended that there is a composite contract with WCL both for loading/unloading and transportation and that the contract is basically for transportation of coal within the mine area and loading and unloading are only incidental to transportation, is factually incorrect. From the copy of Work Order dated 24.02.2007 it is revealed that the work order consists of two jobs, the first job for loading and unloading of coal, for which they are paid Rs. 7.65 PMT and the second part of the contract is that of transportation of coal from one place to another, for which they paid Rs. 64.69 PMT. In case it would have been a composite order, there would have been no need for showing two jobs separately with separate rates. 6.4 As already discussed, the issue relates to job for loading and unloading. The loading of coal is done on tippers by hiring pay-loaders and the tippers transport the coal from one place within the mining area to another place and unload it there. As regard the contention of the Appel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lar 232/2/2006-C.X-4 dt 12/11/2007 has also clarified that handling and transportation of coal/mineral from pithead to a specified location within the mine/factory or for transportation outside the mine are post-mining activities and are chargeable to service tax under the relevant taxable services i.e. 'Cargo Handling Service" and "Goods Transport by Road". However, in case, such transportation is undertaken by mechanical systems, such as conveyor belt system, ropeway system, merry-go-round systems etc., and the same is not transported by road, no service tax would be chargeable, Service tax is, however, chargeable under cargo handling service, even if the loading, unloading and similar activities are done using mechanical systems. 6.7 In view of the above discussion we find no reason to interfere with the ld. commissioner's orders, holding the service rendered by the Appellants as 'cargo handling service'. 6.8 As regards limitation of time we find that the issue raised in this appeal is one of interpretation of law. This view is strengthened by the circulars issued by CBEC, from time to time, in this regard. At the infancy stage of implementation of law there appears to hav....