AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (9) TMI 1384
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....g tax is leviable on entire amount; (v) Services provided by assessees are in the nature of Cargo Handling Services; and (vi) Appellants are liable to pay service tax on the composite charges, which comprises of freight handling charges, airway bill charges and valuation charges, which are incidental to the Cargo Handling Service. Hence, a show-cause notice dated 19.11.2004 was issued to the appellants proposing demand of service tax of Rs. 26,03,720/- with interest thereon as also imposition of penalties under various provisions of the Finance Act, 1994. 2. In adjudication, original authority in terms of order dated 09.04.2004, inter alia, upheld service tax demand of Rs. 26,03,720/- with interest and equal penalty holding that assessee was liable to pay service tax as a Cargo Handling Service provider. Learned adjudicating authority looked into the issue in para 24 and 25 of his order and held that the assessee was liable to service tax as proposed in the show-cause notice. 3. In appeal, ld. Commissioner (Appeals) concurred with the adjudicating authority but in terms of para-5.2 he did not propose penalty with the observation that there was no intention to cause evasion. W....
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....lled as a cargo handler following the decision of the Tribunal in the case of the same assessee reported in 2010 (17) STR 94 (Bangalore). Similarly, Bangalore Bench while deciding the issue has followed Ahmedabad Bench decision reported in 2008 (11) STR 645 (Tri.-Ahmd.). That was also relied upon by the appellant. According to assessee, in para-4 of the Ahmedabad Bench decision there is an observation that the activity undertaken by the appellant was transportation of cargo. Similarly, in para-5, the Bench has noticed that the assessee were admittedly not providing any cargo handling services to the public at large and as such, are not perceived to the trade or public as a cargo handling agent. The Bench further relied on the Board s Circular F.No. B-11/1/2002-TRU dated 01.08.2002 to hold that the assessee had not acted like Container Corporation of India, Airport Authority of India, Inland Container Depot, Container Freight Stations, etc. It is therefore not a cargo handler and not providing cargo handling service. 6.3 Placing the Board s Circular No. 80/2004 dated 17.09.2004 [Ref.: Exhibit H at page 75 of the appeal folder] learned advocate says that the service provided for exp....
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....105)(zr) of the Finance Act, 1994, the services provided by a Cargo Handling Agency, in relation to cargo handling is liable to service tax. As per Board s clarification under Circular F.No.B 11/1/2002-TRU, dated 01.08.2002, if a lump sum amount is charged for both transportation and cargo handling, the tax is leviable on the entire amount. On the other hand, if the Airway bill indicates the amount charged for cargo handling and transportation separately on actual basis (verifiable by documentary evidence), then the tax is leviable only on the cargo handling charges. 8.3 The assessee s main contention is that the services rendered by them are of transportation only and not Cargo Handling Services . They contend that the contract is to transport the goods and not to provide Cargo Handling Services . They argue that for transport of goods, they have to be loaded or unloaded. However, the same does not mean that every transporter would be subject to service tax under Cargo Handling Services. Assessee also points out that loading and unloading was done by independent contractors and they have themselves not neither undertaken nor performed the activity of loading or unloading. 8.4 Fr....
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....s well settled that when a new entry is brought under the levy of service tax, the same activity cannot be subjected to levy under an existing entry, unless the new entry has been specifically carved out of the earlier one. This is certainly not the case here. 8.8 We further find that vide the circular dt. 01.08.2002, Board had issued clarifications regarding service tax on cargo handling services. The said circular, inter alia, clarified that liability to tax under that category would only be services provided by cargo handling agency, undertaking activity of packing, unpacking, loading and unloading of goods meant to be transported by any means of transportation, namely, truck, rail, ship or aircraft. There is no doubt, then, that the transportation is only incidental to the cargo handling service and not the primary activity. On the other hand, the activities sought to be taxed in that cargo handling service is that those of packing, unpacking, loading and unloading of goods. The circular further clarifies that mere transportation of goods is not covered in the category of 'cargo handling' and is therefore not liable to service tax. 8.9 Viewed in this light, the transpo....
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....de or public as a cargo handling agent. As observed by the Hon'ble Supreme Court in the case of Asian Paints India Ltd. v. CC.E. - 1988 (35) E.L.T. 3 (S.C.), the expression as appeared in the taxing statute should be construed in its popular sense, which means that sense which people conversant with the subject would attribute to it and commercial understanding in respect of the same should be preferred. By applying the above criteria, the appellants are admittedly not understood in the common parlour as a cargo handling agency, inasmuch as they are admittedly airline company. It may not be out of context to observe here that in case the cargo is not booked by the said airline, they would not handle the same and would not indulge in loading/unloading or transporting cargo which is not transported by their airline. The contract entered into between the appellant and their customer is not for rendering cargo handling services but is for transportation of the appellant s cargo by air for which purpose, they may get cargo collected or delivered at the customer in which case services have to be held as an integral part of the transportation services. In fact, the independent contractor ....
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....processing and forwarding of such samples are not in the same genre as any of illustrative services under serial No. (iv). By applying the same reasoning, we hold that the incidental service of collection of cargo for the purpose of transportation cannot be held to be falling under the cargo handling service. We also note that the Board circular F. No. B-11/1/2002, dated 1-8-2002 while detailing cargo handling agent s case for example, service provider as Container Corporation of India, Airport Authority of India, Inland Container Depot, Container Freight Stations. Said list which is though illustrative and not exhaustive refers to service provider but actually perform such services and there is no reference to any of the airlines who undertake transportation of the goods. Taking the clue from the above, it has to be held that the services, if any, provided by the airlines for transportation of the cargo from one place to another cannot be covered under the category of cargo handling service. If the said services are held to be cargo handling or any trader or shopkeeper who is mainly engaged in the same product may also undertake to the bought out items the same at the customer do....
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.... is squarely covered under the entry of coastal transportation of goods and we hold accordingly." 9.5 The Tribunal decision in United Shippers Ltd. was appealed against by the department and the same was dismissed by the Hon'ble Supreme Court as reported in 2015 (39)J369 (S.C.). The operative portion of the order is as follows:- "Delay condoned. These appeals are directed against the judgment and order passed by the Customs, Excise & Service Tax Tribunal, West Zonal Bench at Mumbai in Order No.A/1626-1630/2014-WZB/C-I(CSTB) in ST/85933,86857-86859 and 87814/2013-Mum., dated 16.10.2014. We have heard Shri Mukul Rohatgi, learned Attorney General appearing for the appellant and carefully perused the material available on record in our considered opinion, we do not see any good ground to interfere with the judgment and order passed by the Tribunal. Accordingly, the Civil Appeals are dismissed." 9.6 In the case of Jet Airways (India) Ltd. Vs Commissioner of Service Tax, Ahmedabad reported in 2008 (11) S.T.R. 645 (Tri.-Ahmd.), the Tribunal has held that mere transportation is not covered under Cargo Handling Service. The relevant portion of the order is mentioned para 4 as follows:-....