TaxTMI 
TaxTMI 
2012 (4) TMI 430
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.... road/rail to Vishkhapatnam. (B) Infrastructure (1) Plant location Village Pandripani, Gidam Road Jagdalpur (2) Land area 7.20 acres Factory Pandripani, Geedam Road, Jagdalpur (3) Power connected load 400 KVA (4) Production capacity 6,00,000 ton per annum (5) Facilities Modern crushing unit with state of the Art cone crusher computerized 100 MT weigh bridge, office building, residential colony and Guest House (C) Process From bunker through reciprocating Feeders Lump cone will be crushed in Primary Jaw Crushers up to size of 75 mm and Secondary Crushers will then down size from 75 mm to (-) 018 mm size. Crushed ore will be transported by conveyor belt to the Vibratory Screen. The Vibratory Screen will segregate the crushed iron ore into various sizes. The iron ore will be fed into concrete storage silos from where automatic Extraction System is installed to load into trucks directly. (D) Distances Bailadila to Jagdalpur/Rail 170 Km Jagdalpur to our Crushing Unit/Road 10 Km Jagdalpur to Raipur/Road 213 Km (E) Com....
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....over of iron ore crushing charges 2. TRC Series For recovery of transportation, loading and unloading charges 3. LIA Series For recovery of Liaisoning charges 4. Debit Note under CRC Series Amongst the other, for recovery of incidental charges/expenses 3. The Appellants paid service tax on the amounts recovered by invoices in CRC series and LIA series. But they did not pay service tax on the amounts recovered through invoices in TRC series and on amounts recovered through Debit Notes in CRC series. (There is a claim that tax has been paid on amounts recovered through Debit notes). TRC series invoices were issued for recovering charges paid to their sub-contractors for unloading the goods at Jagdalpur Railway yard, loading into trucks and transportation of the goods from the railways yard at Jagdalpur to their plant at Pandripani. They took credit of such tax paid for the purpose of paying service tax on the services rendered by them to their clients under the head for Business Auxiliary service. 4. Revenue was of the view that the amounts recovered from their clients for unloading, loading and transportation of goods to the plant of the ....
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....ctor is that of transportation of goods and the nature of service provided by the main contractor is that of business auxiliary service which is a different service and this factor is also relevant in the context of the said decisions. The finding being given is that appellant is eligible to take Cenvat credit so refund is in effect being granted. The real issue in this case is the valuation of the service and whether amounts claimed as reimbursement will form part of the value of service. In this matter the decision of the larger Bench of Tribunal in the case of Sri. Bhagavathy Traders v. CCE [2011] 33 STT 1/13 taxmann.com 83 (Bang. - CESTAT) (LB)/2011 (24) STR 290 (Tri. - LB) is relevant and the decision goes against the arguments of the Appellants. The appellants have quoted about 7 decisions to argue that the service rendered by the contractors providing service to them was not cargo handling services. Since we are deciding this issue in favour of the appellants, for reasons recorded in later paragraph, there is no need to examine these decisions at length. 10. The appellants point out that the goods were sent to their clients after crushing, the freight was paid by the clie....
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....y the appellants. The revenue also argues that TRC series of invoices were not for actual amounts paid to the sub-contractor but on a flat rate agreed by them with their customers. But Revenue would not allow credit of tax paid on such services. This stand of Revenue is self-contradictory. There is further contradiction in Revenue's stand that the service can be classified as cargo handling service but the tax liability will be on the recipient of the service when such provision is applicable only to transportation of goods. 17. After considering the totality of the facts we are of the view that the contract by the appellant with their customers is for doing crushing and grading of iron ore and also for doing activities like unloading, loading and transportation necessary for this purpose. The transportation activity was done by others and paid by the Appellant along with service tax payable for transportation of goods. The appellants billed the contracted amount separately as processing charges and transportation charges claiming it to be reimbursement of transportation charges when actually what was charged were not actuals for transportation. So it is very obvious that the am....