2007 (11) TMI 90

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....t entered into with M/s. Mahanadi Coalfields Ltd. The work performed by appellants involved transportation of coal inside the colliery area and mechanical transfer of coal to Tippers at quarry face. The authorities below have held that the appellants have provided cargo handling services to M/s. Mahanadi Coalfields Ltd. and hence have demanded service tax on the gross amount received by the appellants. It is the contention of the appellants that the work undertaken by them does not fall in the category of cargo handling services. They have stated that M/s. Mahanadi Coalfields Ltd. had examined, the activities undertaken under the contract and had clarified to the appellants well as to similar other contractors that the activities undertaken....

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....h the scope of cargo handling service as well as the meaning of cargo. We find that in these two cases before us, both the appellants have executed work under a contract with M/s. Mahanadi Coalfields Ltd. for Service Tax Appeal Nos. 25 & 29/06 movement of coal within mining area. The agreement entered into by the appellants with M/s. Mahanadi Coalfields Ltd. reveals that the work performed by the appellants involved transportation of coal inside the colliery area and mechanical transfer of coal to Tippers at quarry face. The amount received by the appellants also includes the cost of operation of machinery involved in the mechanical transfer of coal. The appellants have challenged the duty demand on the ground that the mechanical transfer o....

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....r point - this activity never involves loading onto or unloading from any ship/vessel/vehicle which conveys the coal from/to our own mining premises and therefore, the coal cannot stand in the same footing as that of "cargo". This is to bring to your notice that right from the coal face to Railway siding everything in between (inclusive both) constitute "mine" as defined by the Mines Act. Something going out of mines by conveyance to end user or something coming into mines by conveyance from suppliers may constitute cargo but not something moved from place to place within the periphery of one mine. The first chargeable/taxable event in order to levy service tax on "cargo handling service" is that the thing "handled" must be "cargo" - in the....