TaxTMI 
TaxTMI 
2008 (6) TMI 22
X X X X Extracts X X X X
X X X X Extracts X X X X
....ess of Rs. 3,779, aggregating to Rs. 6,43,999 was leviable under section 68 read along with sub-section 2 of section 73 of the Finance Act, 1994. This levy has followed by interest under section 75 of the said Act. (2) Up to 28-2-2005, service tax was required to be deposited by 25th of the month following the calendar month during which value of the taxable services were received. Thereafter from 1-3-2005 onwards, this was modified to 5th of the month. Failure to make deposit of tax, penalty equal to Rs. 100 for everyday of failure was imposed under section 76. Subject to the conditions that penalty amount shall not exceed Rs. 6,43,999. (3) Penalty of Rs. 1,000 was imposed under section 77 for non-filing of the prescribed returns and for no registration under section 69 of the Act. (4) Penalty of Rs. 6,43,999 was imposed under section 78 for suppressing the value of taxable service subject to condition that if the demand was paid within 30 days from communication of the adjudication order, the penalty amount shall get reduced to Rs. 1,61,000 (25 per cent of the confirmed Service Tax amount).' 1.2 On the basis of information, Revenue Authorities visited premises of the appe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(c) He denied that this bifurcation have been done in keeping view of Service Tax liability if it arises at a latter stage. (d) He also denied that his work comes under the purview of Service Tax. They have taken expert opinion in this regard." 1.5 Recorded statement of Chief Executive of BSIL revealed as under:- "(a) M/s. Modi Construction Company are working as contractor for BSIL for the last ten years. They are doing in plant transportation of raw material, waste material and finished goods, maintenance of BSIL Railway siding and maintenance of signalling and telecommunication. (b) The bifurcation on lump sump account in to loading and transportation charges have been done for accounting purposes only. (c) He also denied that bifurcation has been done in keeping view of liability of Service Tax if arises." 1.6 Perusing work order of BSIL which was issued on 14-7-2003 and 27-4-1995 for the work of loading, un-loading and shifting of raw materials L e., coal, iron ore and dolomite from any place in the plant to any other place within the within two kms., the Authority being opined that 'cargo handling service' was provided by appellant. 1.7 With the aforesaid backg....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the factory, that was not at all a 'cargo handling service'. Both the Authorities misconceived both on fact as well as law without testing nature of activity on the touchstone of law. When there was no liability, invoking of a longer period was unwarranted and no penalty was also leviable. There was no suppression of fact at all and the appellant provided all materials to the inspecting Authority as well as cooperated in the course of proceeding. The appellant was under bona fide belief that there shall not be liability under the Act for the nature of activity carried out by it. In view of no reasoned and speaking order passed, adjudication was bad in law. 2.2 It was submitted by the learned Counsel that while the appellant has all along cooperated and complied with the law as and when called for and also sought registration for maintenance and repair service and registration was thus granted on 9-11-2004, it was crystal clear that the appellant was very well in the record of the revenue with all fairness for examination of its facts and circumstances. The Authorities failed to appreciate that if at all there was a liability, CENVAT Credit was available to the client of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on of law as above, meaning of the term "cargo handling service' was provided by Legislature in section 65(23) of the Act, which reads as under "(23) '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 cargo handling service incidental to freight, but does not include handling of export cargo or passenger baggage or mere transportation of goods;" 4.4 The word "service' is a noun of verb "to serve'. To serve means to perform functions; do what is required for. It is an act of helpful activity - help, aid or to do something. With such normally understood meaning of the word "service", economic activity resulting in service were brought to tax by the Act. Consideration received by an assessee for the taxable service provided forms measure of taxation as value of taxable service. 4.5 Combined reading of provisions of section 65(105)(zr) and 65(23) of the Act throw light that cargo handling agencies are taxable en....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e test of handling of cargo in the manner envisaged by law. It is also not necessary that the cargo should only be meant for transport either by vessel in ships or aircrafts. 5. Looking to the admitted facts of the case and finding of learned Adjudicating Authority which remained uncontroverted throughout, applying aforesaid interpretation of the law, it may be held that the scope of activity carried out by the appellant, inside the plant does not call for taxation under the class 'cargo handling service' following decision of this Bench in the case of Sainik Mining & Allied Services Ltd. (supra) . For convenience of reading Para-8 of the decision is reproduced as under :- 8. We find that the activity undertaken by both the appellants for mechanical transfer of coal from the coal face to tippers and subsequent transportation of the coal within the mining area, does not come under the purview of cargo handing service. The dominant activities undertaken by the appellants under the contract in question are primarily the movement of coal within mining area and transfer of coal from the coal face to the tippers, if at all, includes loading and unloading which are merely incide....