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2022 (5) TMI 1165
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....97/2014 Seabird Marine Services P. Ltd. CCE & 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)....
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....of cargo from trucks and carrying/transporting it to the CFS's warehouse. At the 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". ....
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....to CFS storage area, and transportation of container the CFS to the port under the taxable 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 rela....
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....gory of cargo handling and is therefore not liable to service tax. 3.3 Cargo handling service provided in relation to storage 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 servi....
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.... • Airport Authority of India Vs. Commissioner of Service Tax - 2017 (3) GSTL 390 (Tri. Del.) • Kerala State Industrial Enterprises Ltd. Vs. C.C.E, C. & S.T 2012 (28) 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....
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....torage and warehousing services was restricted to the act of storing and warehousing the goods and could not extend to the activities of handling of export cargo. It covered only storage and warehousing of goods and did not 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....
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.... Service Tax as per applicable rates. He also showed few invoices for Storage of Cargo for the purpose of export wherein they have charged Service Tax at the applicable rate. Learned Counsel adopted the arguments made by the learned Counsel in the case of Seabird Marine 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 f....
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....roach the keeper for the purposes of storage and warehousing. In the present case, no storage and warehousing services are provided to the public at large and the same are exclusively meant for exporters and importers who use the port facilities. Taking an example from common life, if a person is rendering 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 Lea....
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....d Earth moving and Demolition service. Following the said decision, we hold that since the activity undertaken by the appellants is also excavation and removal of over burden and mining of ore, it is not classifiable under Site Formation, Cleaning, Excavation, Earthmoving and Demolition services." 3.4 The Learned Counsels for M/s Allcargo Logistic P. Ltd. & Honeycomb Logistic P.Ltd. 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 ....
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....y whereas in export, the all the activities as claimed as cargo handling are done i.e. transportation, carting, de-stuffing, loading/unloading, storage and warehousing etc. however not paying service tax on storage and warehousing facility is not acceptable. 3.10 Learned AR argued that the service of Storage & Warehousing' cannot be termed as ancillary to cargo handling services as the appellant 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 pr....
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....ce from such stations." From the above it is apparent that the Custom fright station are established essentially to handling imports/ Exports cargo and for temporary storage of cargo or loaded/ empty containers. Cargo Handling Services was introduced in the Service Tax net in the year 2002 and Circular No. B11/1/2002-TRU dated 01-August, 2002, clarified as follows: "2. As per clause (21), the term "cargo handling service" means loading, unloading, packing or unpacking of cargo and includes 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,....
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....e purview of cargo handling services." 4.1 In the same year storage and Warehousing Services were also included the Service Tax net the aforesaid circular dated 01.08.2002 clarified as follows in respect of "Storage and Warehousing Services". "10. Another point made by the CWC is that they engage handling and transport contractors (H&T contractors) to provide handling and transport services who would be charging them service tax for cargo handling services. CWC add supervision charges and raises the bill to the customers. For warehousing 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 rend....
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....as to whether appellant is charging varying rates for the same cargo depending on the period of retention of the goods, whatever be the reason, in their terminal. If appellant charges the same rates for the goods lifted after arrival in the terminal building after all processing and on completion of all formalities, i.e. within 48 hours, then there is no scope for levy of any service tax on the ground of storage and warehousing because appellant is not charging for the same. On the other hand if appellant charges more than the normal tariff of terminal charges 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 quantit....
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....ehouse charges are collected the same are liable to service tax both in respect of import and export cargo. 4.5 Similar view has been taken by tribunal in the case of Airport Authority of India Vs. Commissioner of Service Tax-2017 (3) GSTL 390(Tri. Del.) wherein para 5. The following has been observed: "5. We have heard both the sides and perused the appeal records. On the first issue whether the appellants were engaged in providing taxable service under "storage and warehousing", we note that based on the submissions made and the findings recorded in the impugned 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. ....
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....rt to CFS or otherwise then such transportation would be liable to Service Tax on reverse charge basis under GTA service. 4.6 The order impugned in case of M/s Mundra international Container Terminal Pvt. Ltd. observes as follows: "7. In this regard, I find that as contended by the Notice; to impress on the activity carried out by the Noticee, I reiterate the contention of the Noticee that; stuffing of goods includes carting of cargo from truck into CFS area, lift on and off of empty containers, transportation within the CFS area and stuffing point, lift on and off of full 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 ....
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.... it is provided in the context of transportation and when incidental to freight. I find that, in the case of the noticee, handling of cargo takes place while providing the services of storage and warehousing and such handling of cargo done by the noticee within their CFS area can, in no way, be related to the context of transport or freight. The said services, in fact, are nothing but 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 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 Wareh....
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....h 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 there is no element of cargo handling present in the instant service and therefore, the activity carried out by the Noticce is correctly classifiable under the category "Storage and Warehousing Services"." From the above it is apparent that the order proceeds on the line that container fright stations are primarily meant for "Storage and Warehousing". This is totally contrary to common sense. No person would bring goods to 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 prescri....
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.... submitted that the reservation of space was in the context of cargo-handling of export cargo which was specifically excluded from the scope of "cargo handling service and hence the demand is not sustainable. The adjudicating authority, held that the reservation of space in the CFS fell under the category of "storage and warehousing service" and liable to Service Tax. However, he held that in as much as the appellant had submitted a letter dated 13-3-2003 and the fact of space reservation was clearly mentioned in the said letter, no suppression can be alleged and held the demand to be time-barred for the period prior to 1-2-2005. in respect 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 a....
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.... supplier) Gross for Net In JUTE BAGS GROSS FOR NET IN PP BAGS 1. Where cargo is received by rail, unloaded in warehouse and then shipped 375.00 227.00 355.00 2. Where cargo is received by road, unloaded in Warehouse and then shipped 305.00 157.00 285.00 3. Where cargo is received by rail and directly taken to port for shipment 325.00 177.00 305.00 4. Where cargo is received by road and directly taken to port for shipment 255.00 107.00 235.00 Notes: (i) Above rates are inclusive of one month free storage and for tween decker vessel. Rebate of Rs. 25/- pmt will be available to TIA for bulk carriers. (ii) Further rebate of 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 ....