TaxTMI 
TaxTMI 
2018 (2) TMI 939
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....oading of the same on the tippers and then its transportation from riverbed and unloading at bunker/stockyard. ii) Transportation of the sand from stockyard to the bunker i.e. within the mine movement. The sand is to be transported for a distance of 0-1km to 18-19km by tippers. The contract between the Appellants and WCL is composite in nature as there is no separate bifurcation between transportation and the loading and unloading activity.WCL has paid service tax on the transportation of the sand from riverbed to stockyard/bunker under Goods Transportation Agencyservice under reverse charge mechanism from 1.1.2005 on the entire consideration paid to the Appellants. WCL has, however, not paid service tax on within the mine movement. The Revenue has raised service tax demand against WCL for within the mine movement. The same was confirmed by the Order-in-Original dated 16.7.2008. However, the Hon'ble CESTAT has vide order dated 30.3.2017 set aside the said demand. The revenue has filed an appeal before Hon'ble Supreme Court and thematter is now pending before Hon'ble Supreme Court. Revenue has alleged the aforesaid service rendered by the Appellants to WCL is class....
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..... CIT, Assam, AIR 1961 SC 1579, wherein it was held that the determination of measure of consideration is entirely a matter of commercial agreement between the parties. It is a settled principle of law that the measure of consideration is not determinative of the nature of the transaction. 2.3. Ld. Counsel argued that the issue is squarely covered by the decision of Hon'ble Supreme Court in the case of Singh Transporters vs. CSST, Raipur, 2017-TIOL-249-SC-ST the appellants had entered contract with M/s. South Eastern Coal Fields Ltd. for transportation of the mine coal from pit head to railways siding within the mining area. In this case, pre 30.5.2007, demand was raised under Cargo Handling Services and post 1.6.2007, under Mining Services. Tribunal set aside the demand for both period holding it as transportation of goods by road, therefore not taxable. Revenue filed an appeal against the aforesaid order to the Hon'ble Supreme Court. The Hon'ble Supreme Court in 2017-TIOL-249-SC-ST, categorically held it to be transportation of goods services and therefore, not liable to be taxed under Mining Services. The relevant extract of the order is reproduced as under: "6. Be t....
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....ervice of packing together with transportation of cargo or goods, with or without one or more of other services like loading, unloading, unpacking, but does not include, handling of export cargo or passenger baggage or mere transportation of goods;" (Emphasis supplied) 2.5. He argued that the legislature in its wisdom has chosen to tax only those services which are in relation to handling of cargo and not goods. In clause (b) of the definition, the legislature uses both the words i.e. goods and cargo. The use of the word Cargo by the Legislature is a deliberate act with an intention to restrict the scope of the levy to Cargo only and not to extend it to goods/material/articles, handling activities. The word Cargo is not defined under the Act. The word Cargohas a definite connotation in commercial parlance. He relied on the meaning of the term cargo in various dictionaries are provided as under:- Webster's Dictionary defines the term cargo as: "Cargo'- Goods and Merchandise taken on abroad, vessel, aircraft etc. The 8th Edition of Black's Law Dictionary defines the term cargo as: Goods transported by a vessel, airplane o....
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....goods is a stage prior i.e. before they became cargo and in fact on completion of such packaging the goods become cargo. The position becomes more clear if the dictionary meaning of the word "cargo" is taken into account, as set out below: As per Black' Law Dictionary, the word "cargo" means "Goods transported by a vessel, airplane, or vehicle; According to Oxford Dictionary of English, "cargo" means goods carried on a ship, aircraft, or motorvehicle and as per Webster's Comprehensive Dictionary, "cargo" is Goods and merchandise taken on board a vessel." He argued that handling of cargo alone is covered under the scope of taxable service. 2.8. Ld. Counsel argued that the movement within the mine/factory is not transportation of the goods as the same lacks origin and destination point and hence the same will be outside the scope of the levy under Cargo Handling Services. He argued that the term Cargo has a distinct meaning of goods being transported from an origin to destination and every movement of goods cannot be considered as movement of cargo. Ld counsel relied on the decision of the Tribunal in case of Sainik Mining & Allied Services Ltd. Vs CCE-2008 (9)....
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....g agencies who undertake the activity of packing, unpacking, loading and unloading of goods meant to be transported by any means of transportation namely truck, rail, ship or aircraft. Well known examples of cargo handling service are services provided in relation to cargo handling by the Container Corporation of India, Airport Authority of India, Inland Container Depot, Container Freight Stations. This is only an illustrative list. There are several other firms that are engaged in the business of cargo handling services." ....Emphasis Supplied He argued that from the language of Sec.65(23)/65(105)(zr) and understanding of the Government as per Circular it becomes very clear that the Legislature intended to cover only Cargo Handling Agents such as Container Freight Terminal, Container Corporation of India, Air Port Authority of India, other freight terminal into its fold who provides services of loading, unloading, packing or unpacking. He argued that the activity of excavation of sand and filling up the excavated mining area will be more appropriately taxable under Mining Serviceas defined U/s 65(105)(zzzy) w.e.f. 1.6.2007, He argued that the activity of mi....
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.... and no penalties are imposable on the appellants. He argued that the issue involved in the present case is one of interpretation of the statutory provisions. The dispute in the instant case relates to pure interpretation of statute and classification of services. He pointed out that WCL vide its letters dated 3.2.2005, 22.8.2005 and 4.9.2006 have sought opinion from the department for applicability of service tax on the contracts of hiring goods transport vehicles and related works. However, no response was received by WCL from department in this regard. Thus, in such a circumstance, there cannot be any allegation of supper He argued that the decision relied upon by the department are factually distinguishable from the factum of the present case. The decision relied upon by the department are factually distinguishable from the present case. The department has relied upon the decision of Hon'ble Orrisa High Court in the case of Coal Carriers Versus Commr. Of C. Ex., Cus. & S.T., Bhubaneswar, 2011 (24) S.T.R. 395 (Ori.) to support their allegation that the activity in the present case is covered under the Cargo Handling Service. However, in the said decision the activity undertak....
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....ifting/ transportation of 10-30 MM of iron ore from quarry to railway siding at Barbil which include the activity of loading and unloading, transportation and lumpsum charge of Rs. 135/MT was being paid. The contention of appellant that transportation of iron ore within mining area cannot fall within scope of CHS was rejected relying on earlier decision in case of Gayatri Carriers Pvt Ltd and Jai Jawan Coal Carrier Pvt Ltd. He also relied on the case of Nizamsingh Chauhan, 2016-41-STR-982-T-Del, handling and transport of manganese ore was held classified under CHS . He further pointed out that the decision in case of SSV Coal Carrier/Shreem Coal Carrier, 2015-37-STR-1067-T-Mum, holding that mining of sand from river bed and transporting to Western Coalfield mining area, sand being a minor mineral, comes within definition of mining services, has been set aside by SC vide Order/16.10.159 1061-38-STR-J427-SC, and it has been remanded to CESTAT to be decided by LB. Said Order in some of the parties have been recalled by SC/3.10.16,in case of Coal Carriers and ITW India Ltd , but the instant party was not there. Further in Deptt appeal against said Tribunal Order/20.8.14, has also be....
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....r riverbed or in stockyards, ii) movement of trucks from riverbed outside the premises to stockyard/bunker in the premises iii) movement of trucks from stockyard to bunker within the premises iv) unloading the sand in stockyard or in bunkers Loading in the riverbed is not a simple activity of loading as the sand has to be mined using an excavator or other machine. The location of riverbed is not fixed. The loading in the stockyard is, however, simple activity of loading. Reliance has been placed by revenue on the case of Coal Carriers (Supra). The Hon High Court in the case of Coal carriers (supra) was concerned with the following activity It is also observed that supply of Pay Loaders by the appellant were merely an aid to perform the service of loading of Coal (Cargo) into the Railway Wagon and not a case of letting out of Pay Loaders on hire basis as obligation of the appellant did not end simply with the letting out of the Pay Loaders on hire but the appellant was required to carry out loading of required quantity within the given time frame and charges were payable on the basis of coal loaded into the Railway Wagons. The activity under consi....
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....r. 9. It is stated that like the aforesaid contract, another contract was awarded to the appellant vide Work Order No. MCL/CGM/LKPA/SO(M)/Pay Loader/03.04.0020, dated 6/11-2-2004 by MCL for Hiring of Pay Loader for Mechanical transfer of coal from Railway siding/platform into Rly. Wagons at Y Curve BOCM Siding at Chingriguda of Lakahnpur Area over a period of two years for a contract value of Rs. 92.99 lacs payable @ Rs. 2.79 per metric tonne of coal transferred/loaded. Under the contract the appellant had to transfer 900.000 MT. of coal per hour. Copies of the Work order dated 14/17-12-2002, Work Order dated 29-4-2003 and Work Order dated 06/11-2-2004, which are annexed to and part of the show cause notice dated 21-2-2005 are produced. It is apparent that the activity undertaken is not merely loading but also transfer of material within the railway siding and also other places. Thus the activity would be loading of coal in pay loader at one place and unloading of the coal in the wagon. The entire purpose of the contract was loadingof the wagons and the transportation within the siding or nearby places was incidental to the activity of loading. Moreover, there was no mi....
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....m. To examine this question it is necessary to examine the nature of contract. Revenue has argued that the contract is not for the transportation but for the cargo handling as the rate quoted is on per MT basis. Following is the text of one such typical contract Letter of Intent No. WCL/GM/CMC/LOI/14/2004-05/1482 Sr.No. Items Items of work Quantity Rate/Cumt. Amount Job:1) Hiring of equipment such as track mounted excavator (back-hoe) & tippers for collection of sand from below water level and/or above water level, as the case may be, by mechanical means, loading of sand into tippers, transportation of sand, from Chorseonighat/Hadasthighat or any other ghat of Wardha River to Bunker/Stockyards of Nandgaon Incline of Chandrapur Area and unloading of sand. (a) From Hadasthighat/or any other ghat to Bunker No:10/Stockyard Lead : 6-7 Kms. Daily quantity of sand to be transported. 250 Cumt. 60,000 Cumt. Rs.66.00 per Cumt. Rs.39,60,000/- (b) From Chorseoni/any other ghat to Bunker No : 10/stockyard Lead :11-12Kms NIL Rs.94.00 per Cumt. Only rate to be quoted/obtained (c) From Chorseoni/Hadasthighat....