TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 1165
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.... & ST, Rajkot (i)2006-07-2010-11 (ii)Oct'11 to June'12 (i)Rs. 2,85,94,612/- with equal penalty u/s.78,Penalty u/s.76 and Penalty of Rs.10000/- us.77 (ii)Rs. 1,27,86,465/-with Penalty u/s 76 and Penalty of Rs.10000/-u/s.77 16.04.2012 14.02.2013 23.08.2013 29.04.2014 ST/14076/2013 Mundra International Container Terminal p.Ltd. CCE & ST, Rajkot 2006-07 to 2010-11 Rs.4,61,07,792/-with equal Penalty u/s.78 and Penalty u/s.76 17.04.2012 11.09.2013 ST/11699/2014 Allcargo Logistic Ltd. CCE & ST, Rajkot 2007-08 to 2011-12 Rs. 2,76,93,198/-with equal Penalty u/s.78 and Penalty u/s.76 and Penalty of Rs.10000/-u/s.77 04.10.2012 13.01.2014 ST/11582/2015 ST/11719/2014 Honeycomb Logistic P. Ltd. CCE & ST, Rajkot (i)April,2010 to June'2012 (ii)2007-2008 to 2011-2012 (i)Rs.19,19,937/-with equal Penalty (ii)Rs.1,95,28,737/-with equal Penalty. Also Penalty u/s 76,Penalty of Rs.10000/-u/s.77 (i)18.10.2013 (ii)04.12.2012 (i)30.09.2014 (ii)13.12.2013 2. Learned Counsel for M/s Seabirds Marine Service Pvt. Ltd. pointed out that they are a CFS (Container Freight Station) involved in the activity relating to import and export of goods. He pointed ....
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....time of carting the cargo, a tally is prepared by the surveyor staff (contractor of the Appellants), which includes examination of physical cargo and tallying the quantity with the Shipping Bill and Cargo Carting Form. The H& T Contractor raises a bill on the Appellant for the Handling of Cargo services provided by them. However, as the services are provided in relation to handling of export cargo, no service tax is charged by them. At the end of the carting process, the cargo is stored inside the warehouse. Storage of export cargo is charged based on per ton/ per day basis as provided in the Tariff Card. However, there could be cases where the cargo is received & stuffed into the containers on the same day without incurring any storage charges or the Appellant do not charge any consideration for export cargo stored for the agreed period / days, after which, the storage of export cargo is charged as per the rates specified in the Tariff Card. For the consideration received towards storage of cargo, the Appellant was duly paying service tax under the taxable head "storage and warehousing service". 2.5 Thereafter, once the CHA obtains permission of "Stuffing Allowed", the empty cont....
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....e head "cargo handling services" and GTA Services. 2.7 The Learned Counsel argued that the impugned order classified the above Service under "Storage and Warehousing in following grounds: (i) Services of Handling cargo provided the Appellant are in relation services of storing & warehousing during import and export. The said cargo handling activity carried out by the Appellant was considered by the Respondent as an integral part of the "warehousing and storage" services provided by them in the CFS area and therefore, chargeable under the criteria of "Storage and Warehousing Service" (ii) Service of "Handling of Cargo" provided in CFS area was classifiable under the category of "Cargo Handling Service" only when it was provided in the context of transportation and when incidental to freight. It was held that the Appellant provided place for keeping cargo goods, loading, unloading, stuffing, security handling/storage and warehousing of empty containers etc. facilities within their CFS and therefore, the said services cannot be considered in the context of transportation, but were in relation to "Storage and Warehousing Services". (iii) The Appellant artificially split charg....
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....age of agricultural produce (scope of the term "agricultural produce" is given under the storage and warehousing service) or for goods meant to be stored in cold storage have been exempted from the levy of service tax. (See Notification No. 10/2002 S.T.). 4 A point has been raised as to what would be the value of service tax in a case where transport and cargo handing service is provided in a composite manner. The measure of tax is the gross amount charged by the cargo handling agency from the customer. Therefore, if lumpsum amount is charged for both transportation and cargo handling, the tax will be payable on the entire amount. On the other hand, if the bill indicates the amount charged for cargo handling and transportation separately on actuals basis (verifiable by documentary evidence), then the tax would be leviable only on the cargo handling charges Annexure III Storage and warehousing services 5. It has been stated that in some case a storage owner only rents the storage premises. He does not provide any service such as loading/unloading, stacking, security etc. A point has been raised as to whether service tax would be leviable in such cases. It is clarified th....
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.... STR 574 (Ker.) * A.S. Transport Vs Commissioner of Central Excise, - 2010 (17) STR 21 (Tri. Kolkata) * (iv)Gajanand Agarwal Vs. Commissioner of Central Excise -2009 (13) STR 138 (Tri. Kolkata) 2.11 Learned Counsel argued that the Revenue erred in holding in Para 8 of the impugned order that services of "Cargo Handling Service" provided in CFS are classifiable under "Cargo Handling Service" only when it is provided in the context of transportation and when it is incidental to freight. He relied on the Board Circular No. 104/7/2008-ST dated 06.08.2008 wherein the Board clarified that transportation is not an essential character of "Cargo: Handling Service" but only incidental to "Cargo Handling Service". 2.12 Learned Counsel stated that the Appellant submits that in terms of the Tariff Card, the Appellant provided free facility for storage of goods for import and export cargo to its client for specific period of time. If the cargos are stored for more than the specific period mentioned in Tariff Card, the Appellant charged extra amount towards "Storage and Warehousing Services" along with Service Tax. 2.13 Learned Counsel argued that the Revenue failed to appreciate that if t....
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....t cover handling or transporting of cargo/container. The definition could not be read to cover handling of export cargo which was specifically covered under the definition of cargo handling services. The services rendered in the nature of loading, unloading and packing of export/import cargo/ container specifically covered under cargo handling services, and they were correctly classified by the Appellants under Cargo Handling services. 2.18 Learned Counsel stated that The Show Cause Notice had raised a demand for the period 2006-07 to 2010-11 and had been issued on 16th April, 2012, Invoking the longer period of limitation. Learned Counsel argued that the extended period of limitation could be invoked only in a case where the service tax had not been paid on account of fraud, collusion, and wilful mis-statement, or suppression of facts with an intention to evade payment of tax. Learned Counsel stated that the Appellants were duly registered with the service tax department under the categories of Cargo Handling services, Storage and Warehousing services, Renting of Immovable Property, and as an Input Service Distributor. Further, the Appellants were duly filing Returns and paying s....
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....ine Service Pvt. Ltd. He asserted that the activities under taken by the appellant in respect of which demand has been raise are not "Storage and Warehousing Services" but Cargo Handling Services. Learned Counsel relied on para 3 under the head of "Cargo Handling Services" of the CBEC Circular No. B/11/1/2002-TRU dated 01.08.2002 (supra). 3.1 He argued that even as per CBEC circular also Service provided by Container Freight Station is in the nature of Cargo Handling Services. Learned Counsel relied on the decision of Hon'ble High Court of Kerala in the case of Kerala State Industrial Enterprises Ltd. Vs. CCE,. C & S.T., Kochi -2012 (28) STR 574 (Ker.) 3.2 He argued that in the instant case they are charging tariff for handling of cargo at specified rate for all exports and imports. The tariff card specifically lays down the amount i.e. chargeable for storage in excess of free time allotted as per in tariff card for cargo handling storage. He argued that they are paying Service Tax on such storage charges collected by them for the period over and above the free period allowed as per the tariff card. On such charges the appellant's are paying Service Tax at the applicable rates. L....
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....a paying guest accommodation and also provides food to the resident, can that person be held to be providing the services of Restaurant, when such food providing is only restricted to the paying guest and not to any independent person, who can come at any point of time and enjoy the food facility. Similarly, if a hotel provides services of washing and ironing of clothes to its resident guests, can it be called as a laundry or a dry-cleaning service provider? The answer to both the above propositions would be an emphatic 'NO'. Applying the above analogy to the fact of the present case, it has to be held that the appellant is a minor port which was leviable to tax w.e.f. 1-7-03 and any incidental services of storing the goods in terms of legal obligations of Rule 42 of the Major Port Trust Act, cannot be separately made liable to tax as storing and warehousing services." 3.3 Learned Counsel also relied on the decision of tribunal in the case of Associated Soapstone Destributing Co.Pvt. Ltd. Vs. CCE - 2014 (34) STR 865. He relied on para 5 of the said judgment as under: "5. After hearing both sides, we find that issue involved is whether activity undertaken by the appellants falls ....
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....d. stated that he was registered centrally in Mumbai with effect from 01.04.2011 and therefore the Authorities in Rajkot did not have jurisdiction for the issue show cause notice for the period of 01.04.2011. Learned AR for the revenue relied on the impugned orders. 3.5 Learned AR argued that M/s HoneyComb Logistics Pvt. Ltd (Appeal No. ST/11582/2015)have submitted Tariff Card. On perusal of this Tariff Card,(Page No.167 to mainly the Tariff of Exports, it is very clear that appellant was recovering two types of charges one related to Cargo Handling and other for Storage Charges". For Export, composite charges includes carting, stuffing, de stuffing & movement of loaded container to MICT/MP& SEZ. These charges are covered under 'Cargo Handlings Service' whereas the Storage Charges for Export and storage charges for back to town cargo' are not covered under 'Cargo Handlings Service and therefore, covered under 'Storage & Warehousing Service' as defined. 3.6 Learned AR argued that Tariff Card existing embodying separate contracts for each kind of service provided and Revenue has not attempted to vivisect composite services as there is no single composite ser....
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....pellant have earned the considerable revenue from the storage and warehousing facility. Apart from these, in global trading, the export goods purchased from nearer to CFS, or considering the affordability/viability of costing of storage and warehouse, the exporters, intentionally avail the storage and warehousing' services inspite of knowing that there would be charged for storing the goods over and above the free days. Thus, these charges are collected with clear motive to provide 'storage and warehousing facilities' and therefore, cannot be termed as 'cargo handling service'. 3.11 Learned AR also stated that so far as the export of Agri produces is concerned, matter should be remanded back for quantification of storage and warehousing service' rendered to Agri produces." 3.12 Learned AR relied on the Following case laws: (5.7) * 2015 (37) STR 555 (Tri.- Mum)- CCE, Raigad Vs. MAERSK India P. Ltd. * 2020(42) GSTL 98 (Tri-Hyd)- Tinna Oils & Chemicals Ltd Vs.CCE, CCE,Raigad Vs. Visakhapatnam-I * 2016 (46) STR 470 (Tri.-Mum)-Crescent Organics P Ltd. Vs. CCE, Mumbai- IV * 2019 (25) GSTL 226 (Tri.-Hyd)- Duraflex Services & Constuction Technologies Ltd V....
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....cludes cargo handling services provided for freight in special containers or for non-containerised freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport, and any other service incidental to freight, but does not include handling of export cargo or passenger baggage or mere transportation of cargo. The taxable service, as per sub-clause (zr) of clause (90), is any service provided, to any person, by a cargo handling. agency in relation to cargo handling services. 3.The services which are liable to tax under this category are the services provided by cargo handling 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. 3.1 The services provided in relatio....
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....sing they raise a separate bill. The question is whether CWC is liable to pay service tax on cargo handling services and if so, whether they can take credit of the tax paid on cargo handling services by the H&T contractor. Similar situations may exist in respect of other storage and warehouse keepers. It is clarified that if the storage and warehouse keeper undertakes cargo handling services also and raises its own bill to the customer for such service, then he would be liable to pay service tax under the category of cargo handling services also. However, he would be eligible to take credit of service tax paid on cargo handling services rendered by the H & T contractors and adjust the same against his service tax liability on cargo handling services provided he raises a separate bill for the same to his client. In other words, he cannot adjust the credit against storage and warehousing service charges." In the aforesaid background it can be seen that the Board clearly prescribed that the Service Tax provided by "Container Freight Stations" would fall under the category of "Cargo Handling Services" and the services provided by the Warehouse keepers would fall under the category of ....
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.... on account of delay in lifting the goods within the cut off period of 48 hours, then such charges over the normal rates are certainly attributable for storage and safe custody of goods which squarely falls within the scope of Section 65(102) of the Act. Unfortunately none of the authorities including the Tribunal have chosen to find out whether from out of the terminal charges collected by the appellant from the Airlines, any portion is attributable to storage and custody after completion of the formalities and handling of the goods at the terminal building. In other words, if the appellant has standard rates based on quantity, volume or type of cargo or the nature of handling of cargo or passenger baggage in the terminal building irrespective of the time taken for the same within the cut off period of 48 hours, then such charges cannot be treated as charges collected for storage or warehousing of goods. However, if on examination of the records and the appellant's operation with the Airlines the department notices that varying charges are levied, though under the common head terminal charges, then so much of the amount charged in excess of the normal charges for clearance without....
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....pugned order, that the appellants are basically engaged in various composite activities starting from receipt, shifting, handling, loading, packaging in suitable manner, security X-ray, scanning and loading of cargo for outward movement by aircraft. These activities are not relating to storage and warehousing of cargo. To complete these processes some time is taken and during this time, the cargo is held by the appellant in a secured area. The cargo brought by exporters are not for storage or warehousing in the airport. The cargo is brought for shipment and the shipment happens at the earliest available opportunity. Till the shipment, the cargo is held for a short duration by the appellant. During this duration, various activities to make the cargo fit for shipment is undertaken. As such, we are in agreement with the appellant that they are not involved in providing storage and warehousing service with reference to the cargo. As such, there is no tax liability under this tax entry for the appellant up to 9-9-2004. 6. With the introduction of airport service w.e.f. 10-9-2004, we find that the appellants are correctly liable to tax under this tax entry. The taxable service under t....
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....container from stuffing point to CFS stack and from there to terminal yard. The said activities are all handling of cargo undertaken in the CFS in relation to storage and warehousing services. The said services are services incidental to their service of storing of import or export cargo; the cargo received in their area are required to be handled either before or after providing the service of storing or warehousing and without such handling activity the service or storing or warehousing is not possible. Therefore, I find that such handling services provided within the CFS area is not an independent activity to get classified under the separate category of cargo handling services just because cargo is handled and hold that the activity carried out by the Noticee is a part of their storing and warehousing services in the CFS and does not fall under Cargo Handling Services as contended by them. 9. In this regard, I find that the notice has provided space for loading docks for stacking, to store/keep cargo meant for container export, bulk expert, handing of loaded as well as empty containers, storage of cargo arrived in import with additional benefit of inventory, safety/security ....
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....dling activity the service of storing or warehousing is not possible. Therefore, such handling services provided within the CFS area is not an independent activity so as to get classified under the separate category of cargo handling simply because of the fact that cargo is handled. As such, the activity of handling of cargo by the noticee as a part of their storing and warehousing services in the CFS does not fall under cargo handling services as contended by them. 13. In this regard, I find that the Noticee is paying service tax under the category of "Storage and Warehousing Services" in the case of storage of imported cargo but in the case of storage of export cargo they are not paying service tax by classifying the same services under the category of "Cargo Handling Services" even though the nature of service rendered for import and export is identical. This can only be to wrongly avail the benefit of the exemption available for export cargo. In view of my discussions above, I find that the cargo /goods received in their area were not merely handled, but were provided with facility of storage, security and other amenities normally provided by a storage and warehouse keeper. ....
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.... container fright station just for the purpose of "warehousing or storage". Goods are brought to "Container Freight Station" for the purpose of import or export. Such goods are in transit either into India or outside India. All the appellant's have pointed out that they have fixed rates for handling different sizes of container of cargo for the purpose of processing within the container freight station. All of them asserted that storage and warehousing charges are levied only if the period of such storage and warehousing that exceeds the minimum period prescribed in the package rates for processing of goods. 4.7 In view of above we do not find any merit in the argument of Revenue that the activity of Cargo Handling in the Container Freight Station is incidental to the Storage and Warehousing activity. From the above discussion it is apparent that storage in the container freight station is only incidental to the cargo handling activity. The main purpose of the Container freight Stations is to handle cargo for the purpose of import or exports. The main purpose of the container Freight Stations is not Storage and Warehousing. In these circumstances, we do not find any merit in....
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....ect of the agreement dated 1-2-2005, he held that the appellant had changed the terms of the contract. While they continued to perform the same services including reservation of space, they deliberately avoided mentioning of the rental for the space reservation and increased the charges for cargo-handling which amounted to deceit on the part of the appellant. Accordingly he confirmed the demand for the period 1-2-2005 along with interest and also imposed equivalent amount of penalty both under Sections 76 and 78 of the Finance Act, 1994. Hence the appeals before us." It is seen that the facts of this case are significantly different in the case in hand. 4.8.2 The Revenue have also relied on the decision the case of Tinn Oils & Chemicals Ltd Vs. CCE, Visakhapatnam-I- 2020(42) GSTL 98 (Tri.-Hyd). In the said order in para 12 following as observed: "As far as the payment in question is concerned, the demand is on the entire amount which the appellant has received under the agreements. The salient features of the agreement as discussed above would show that the services required of the appellant are not just of storage or warehousing but are essentially one of stevedoring and handl....
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....f Rs. 10/- pmt will be available where quantity handling crosses 100,000 mts and additional Rs. 5/- pmt where quantity handled crosses 150,000 mts. It is understood that the rebate will be given only for the quantity exceeding the limits mentioned above." From the above it is apparent that in the said case Warehousing charges were collected only for the period exceeding 1 month. And Service Tax was levied only on the amount charged under the head of warehousing. Thus, the said case supports the conclusion reached in the instant case. 4.8.3 In the case of Crescent Organics P Ltd Vs. CCE, Mumbai-IV- 2016 (46) STR 470 (Tri.-Mum) also the facts are different. In the said case the appellant's have storage facility in Mumbai Port and were not involved in cargo handling. Consequently, it was held that the services provided by them would be "Storage and Warehousing Services". 4.8.4 Revenue also relied on the decision of Tribunal in the case of Duraflex Services & Construction Technologies Ltd Vs. CCE, Visakapatnam- I- 2019 (25) GSTL 226 (Tri- Hyd). The facts in the said case are also different. In the said case purely "Storage and Warehousing Services" were provided for export cargo and....