TaxTMI 
TaxTMI 
2012 (7) TMI 566
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 3. Dolomite is used in steel making chiefly for refractory purposes. SAIL uses the dolomite for the production of pre-fluxed sinter. In the sinter plant it is used in the form of chips and as refractory material in the open hearth furnaces for fettling and steel making. 4. After due investigation, show-cause notice dated 22.9.04 was issued by the Revenue alleging that the activities rendered by the appellant fall under the category of "cargo handling service" and as such are liable to service tax. The said show-cause notice was contended by the appellant on merits as also on limitation. However, the adjudicating authority, by rejecting the appellant's plea held that the services provided by them are "cargo handling service" and accordingly confirmed the tax along with imposition of penalties. The present impugned order passed by the Commissioner stands assailed by the appellant on merits as well as on limitation. 5. After hearing both sides, duly represented by Shri Ravi Raghvan, learned Advocate appearing for the appellant and Shri Sheo Narayan Singh, learned JCDR appearing for the Revenue, we find that the tender invited by SAIL and schedule of work under the contract and ent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed and operated by the appellant. The crushed dolomite is screened by a "Vibrating Screen" into various sizes of 0-10 mm, 10-60 mm, 0-60 mm, 10-25/10-30 mm and is carried by Belt conveyors and dropped at designated stacking places. The stacking place is also located within the mine. 06 mm and below size material is treated as waste. The appellant loads the waste into tippers by using Pay Loader, transports it from the stacking place to about 1 km away and unloads the waste into waste dump. The waste dump is also located within the mine. 9. The aforesaid different sizes of dolomite (0-10 mm, 10-60 mm, 0-60 mm, 10-25/10-30 mm.) are loaded into Tippers by Pay Loaders from the stack and they carry them to and unload them at Dadhpara Railway Siding, which is about 6.422 kms from the mine. SAIL officials issue Gate pass/Transit pass showing the quantity being transported by each Tipper from the mine to Dadhpara Railway Siding. 10. At the Railway Siding, which is private siding of SAIL within the mining lease area, the dolomite is loaded into open Railway Wagons. This loading operation is done by the Pay Loaders (mechanised means). Pay loaders come under the category of Heavy Earth Movi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....actors own trippers before transporting to Dadhapara railway siding. (vi) Loading of dolomite of various sizes into railway wagons at Dadhapara Railway siding by mechanized means. 14. He has concluded that the appellants have rendered the services cargo handling as defined under the Act. As such, by taking into account the entire consideration received by the appellant for various items of work, including crushing, sorting, transportation within the mine as also loading it into Railway wagons, he has confirmed the service tax liability against the appellants. 15. We, after examining the contract, find that the same was entered into between the appellants and SAIL for the main job of breaking and crushing of dolomite boulders. The said contract was entered into in response to the tender floated by SAIL, which required the person having technical requisites and having possession of various technical equipments. The primary job of the appellant was breaking the dolomite boulders, separating the various sizes including the separation of waste and reject through vibrating grizzly. Amended section 65 (23) of Finance Act, 2003 defines "cargo handling service" means loading, unloading, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aid activity is specified in the contract. 18. At this stage, we refer to some the precedent decisions of the Tribunal. In the case of N. Rajashekar & Co. v. CCE [2008] 16 STT 130 (Bang. - CESTAT), [Final order No. 751 of 2008, dated 4.7.2008] the activity of breaking and crushing of limestone into jelly and transportation of the same was held as not covered under the definition of "cargo handling service". In the case of CCE&C v. B.K. Thakkar [Final Order No. A/1877 (Kol.) of 2007, dated 24-10-2007], it was held that contract entered into by the appellant with SAIL for excavation, transportation and feeding of iron ore to the hill top crusher plant for further processing of iron ore were held to be mining service which has been brought under service tax net only with effect from 1.6.2007. The contract was held as not for loading or unloading or handling of cargo so as to fall under "cargo handling service". In the case of Sainik Mining & Allied Services Ltd. v. CCE,&ST [2008] 12 STT 433 (Kol. - CESTAT), it was held that transportation of coal within mining area from the coal face to tippers cannot be held to be covered under "cargo handling service". In the case of CCE v. Giriraj....
X X X X Extracts X X X X
X X X X Extracts X X X X
....om where it is being loaded in wagons by mechanical means for further transportation of the same to Bhilai would get covered by the definition of "cargo handling service" or not. As is seen from the definition of cargo handling service extracted above, in the preceding paragraph, we find the same would include loading and unloading of cargo for all modes of transportation. As such, it appears to us that the activity of loading of finally processed dolomites at Dadhapara Railway sidings for transportation of the same to Bhilai would get covered by the definition of "cargo handling service". Learned Advocate had drawn our attention to the Hon'ble Rajasthan High Court in the case of S.B. Construction Co. v. Union of India [2007] 6 STT 385 (Raj.). Para 10 of the said judgement reads as under:- "In the instant case, the coal is handled/moved from railway wagons to the site of Thermal Power Station with the aid of wagon tippling system to be fed in the boiler bunkers through conveyor system. It is evident that handling of the coal is done through wagon tippling system or conveyor system, they are mechanical devices and no motor vehicle is involved in the said handling. The clarification ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pay loader, tipper or shovel are used the activity will fall outside the scope of the entry. "Cargo handling service" does not have to be done necessarily by hand. 22. For arriving at the above finding, we may refer to the decision of the Tribunal in the case of Gajanand Agarwal v. CCE&C [2009] 18 STT 353 (Kol. - CESTAT) wherein loading of coal on railway wagons for further transportation were held to be covered under the category of "cargo handling service". For better appreciation, we reproduce a part of para 17 of the said judgment:- "It was noticed from the agreement of the parties that time was essence of the contract. The nature of activity that was carried by the appellants was to load the cargo i.e. coal in the Railway wagons. Such an activity squarely falls under the definition of cargo handling service provided by section 65 (23) read with Section 65 (105) of the Finance Act, 1994 and brings the appellants to the fold of law for such service provided. Accordingly, we decline to intervene to the orders passed by the Ld. First Appellate Authority." 23. In view of the above, we hold except above activity of loading of the dolomite in the wagons at Dadhapara Railway siding....