TaxTMI 
TaxTMI 
2024 (9) TMI 926
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.... Rs.3,58,15,811/- on differential value between Profit & Loss A/c and ST-3 returns. 2.1 The Department is in appeal against dropping of service tax demand of Rs.14,92,41,316/- under the category of "Cargo Handling Service" on activities of "Transportation of Ash upto distance of 25 km./31 km. with incidental Loading of Ash (evacuation of Ash)" from Ash Ponds of Thermal Power Plant. WORK ORDERS - TAXED UNDER "CARGO HANDLING SERVICE". 2.2 The Assessee executed Four Work Orders dated 01-04-2008 & 27-02-2008 awarded by M/s Rungta Projects Ltd, work order dated 29-06-2009 awarded by M/s A.K. Transport and work order dated 25-09-2009 awarded by M/s Sainik Mining & Allied Services Ltd for "Transport of Coal upto the distance of 11km to a place outside the mines with incidental loading". 2.3 The Assessee further executed contracts for "Transportation of Ash" generated from Mejia Thermal Power Station (MTPS) and Durgapur Thermal Power Station (DTPS) of Damodar Valley Corporation (DVC) and NTDS SAIL Power Company Ltd., Ranchi. Under the said contracts, the Assessee was obliged to load the Ash and transport the same to specified location upto a distance of 25 km/31 km (approx.) wh....
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....ara Railway Siding is Rs.96.10/- PMT, for picking of shale/stone is Rs.3/- PMT, for breaking of clean Coal the rate is Rs.4.60/- PMT, for loading of broken coal into tipper by pay loaders the rate is Rs.6/- PMT and the rate for loading of coal into wagon by pay loaders and other allied jobs is Rs.15/- aggregating to Rs.124.70. SEARCH & SEIZURE/INVESTIGATION 2.9 On dated 05-09-2013 the Officers of the DGCEI conducted Search and Seizure operations and seized certain documents. SHOW CAUSE NOTICE 2.10 Show Cause Notice dated 13-10-2014 was issued by the Ld. Addl. Director, DGCEI, Kolkata classifying the said work orders under (i) Cargo Handling Services and (ii) Mining Services and alleging inter alia that the Assessee has not paid Service Tax of Rs.25,11,40,162/- during the period from 2008-09 to 2012-13 under the said two heads. Further, under Annexure - C2 of SCN Service Tax of Rs.3,58,15,811/- is demanded on the differential value of services as per Profit & Loss A/c vis-à-vis ST-3 returns (without specifying the category of services under which tax is demanded). 2.11 The Assessee in their exhaustive reply to SCN vide letter dated 18-11-2015 vehemently dispute....
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....tara Railway Siding between the lead of 26 - 27 K.M./28 - 29 K.M. and loading the same into Railway Wagons for transportation outside the mines" @ Rs.124.70 PMT. The contract is essentially for transportation upto lead of 26 km to 29 km. 3.5 He states that out of the aggregate rate Rs.124.70 PMT, Rs.96.10 PMT i.e. 77% relates to transportation of coal. Incidental "Picking", "Breaking" etc. of coal is carried out inside Mine which constitute just 6% of the PMT rate of Rs.124.70 PMT. Loading & other allied job constitutes 17%. 3.6 It is stated that the said contract is essentially for "transportation" of clean broken coal upto distance of 26 - 27 K.M./28 - 29 K.M and not providing any Mining Service. 3.7 He submits that in Circular No.334/1/2008-TRU dated 29/2/2008, it is clarified that method of charging or invoicing does not in itself determine whether the service is a single service or multiple service, Single Price normally suggest single supply though not decisive. The real nature and substance of the transaction and not merely the form of the transaction should be the guiding factor for deciding the classification. Classification must be determined based on essential f....
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....ort of his contention, he relies on the following judgments- (i) Maa Kalika Transport Pvt. Ltd. Vs. CCGST reported in 2023 (79) GSTL 263 (Tri.-Kolkata (Para 13,14,15,16,17,18); (ii) Deputy Commissioner of Central Excise Vs. Sushil and Company reported in (2016) 13 SC 223 (Para 6) Service Tax Demand of Rs.3,58,15,811/- on difference of value as per Profit & Loss A/c and ST-3 returns. 3.14 It is submitted that Service Tax of Rs.3,58,15,811/- is demanded on "adhoc basis" on the differential value as per Profit & Loss A/c vis a vis ST-3 returns without specifying the category under which the said service tax is demanded @ 10.30 %/12.36%. 3.15 It is submitted that the differential relates to work contract service on which tax is paid @ 4.12% on which now tax is demanded @ 10.30%/12.36%. 3.16 Further, he submits that the tax @ 10.30%/12.36% is also demanded on the value of free supply of HSD (Diesel). 3.17 In the case of Maa Kalika Transport Pvt. Ltd. Vs. CCGST reported in 2023 (79) GSTL 263 (Tri.-Kolkata) [Para 19], it is held that demand cannot be raised on the basis of data from Income Tax Department without any corroborative evidence that the value is....
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....ation of law hence, extended period of limitation cannot be invoked as held by the Hon'ble Supreme Court in the case of International Merchandising Company, LLC, Vs. CST reported in 2022 (12) TMI 556 - SC]. 4.9 He further submits that the dispute in the instant case relates to the period from 2008-09 to 2012-13 whereas the Show Cause Notice is issued on 17-07-2014 i.e. beyond the normal period of limitation under Section 73 of the Act. 4.10 It is submitted that the normal period of limitation from 2008-09 to 27-05-2012 was "one year". The normal period of limitation from 28-05-2012 to 13-05-2016 was "eighteen months". Financial Year Period Due date of filing ST-3 Date of filing ST- 3 Months upto 17-07-2014 (Date of SCN) Status 2008- 2009 Apr,08 to Sep,08 Oct,08 to Mar,09 25-10- 2008 25-04- 2009 17-02- 2010 17-02- 2010 4 years 5 months 4 years 5 months Time Barred Time Barred 2009- 2010 Apr,09 to Sep,09 Oct,09 to Mar,10 25-10- 2009 25-04- 2010 15-12- 2010 15-12- 2010 3 years 6 months 3 years 6 months Time Barred Time Barred 2010- 2011 Apr,10 to Sep,10 Oct,10 to Mar,11 25-10- 2010 25-04- 2011 21-07- 2011 21-07- 2....
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....rks order for transportation of coal up to the distance of 11 km to a place outside the mines with incidental loading. Further, in respect of the transportation of ash, the assessee was a specific location up to the distance of 25 km/31 km, which was automatically uploaded. The said activity of transportation of ash, sought to be classified by the adjudicating authority under "Cargo Handling Service". We find that this issue has been examined by this Tribunal in the case of Maa Kalika Transport Private Limited Vs. Commissioner of CGST & C.Ex., Rourkela reported in 2023 (79) GSTL 263 (Tri.-Kolkata), wherein this Tribunal has observed as under : "11. The issues to be decided in this appeal are : (i) Whether the Appellant has rendered "Transportation Service" as claimed by them or "Cargo Handling Service" as claimed by the department? (ii) Whether the service rendered are essentially "Transportation Service" naturally bundled or the individual services in the contract can be vivisected to demand service tax? (iii) Whether the demand of service tax under "Cargo Handling Service" has gone beyond the scope of the Notice? (iv) Whether the deman....
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....mediately after issuance of mining permit issued by Deputy Director of Mines, Co-ordination with M/s. MCL, providing trucks, ensuring proper quality and quantity loading, ensuring proper quality of coal to be lifted and transported in respect of Gross Calorific Value (GCV), Volatile matter (VM) and Moisture Content (with applicable penalty clause on Noticee for failing to ensure guaranteed quality of Coal). In view of all these contractual specifications, the agreement dated 30-5-2015 is not a plain transportation work. It involves series of item of works right from arranging necessary statutory/transaction documents to safe and quality lifting, handling and ultimate delivery of coal from mines to the plants of service recipient M/s. Vedanta Ltd. Thus such multitude of activities cannot be termed as transportation job/GTA." 13. We observe that the Ld. Commissioner has arrived at the conclusion that the Appellant has provided multiple services in the form of loading, unloading, handling, providing trucks, obtaining delivery orders obtaining mining permission etc. and hence the services provided are not mere transportation. We observe that the contract is a composite contrac....
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....ordingly classified. While taking a view, both the form and substance of the transaction are to be taken into account. The guiding principle is to identify the essential features of the transaction. The method of invoicing does not alter the single composite nature of the service and classification in such cases are based on essential character by applying the principle of classification enumerated in Section 65A. Thus, if any ancillary/intermediate service is provided in relation to transportation of goods, and the charges, if any, for such services are included in the invoice issued by the GTA, and not by any other person, such service would form part of GTA service and, therefore, the abatement of 75% would be available on it." 15. The Board has issued another Circular No. 186/5/2015-ST, dated 5-10-2015 on similar lines. The said clarifications issued by Board are reproduced below : "3. Goods Transport Agency (GTA) has been defined to mean any person who provides service to a person in relation to transport of goods by road and issues consignment note, by whatever name called. The service provided is a composite service which may include various ancillary servi....
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....t for transportation of goods and other activities are naturally bundled along with this principal service. Once the services rendered are classified as Transportation Service, the liability of payment of service tax on these services was not on the Appellant, as the service recipients in all these cases are Companies registered under Companies Act, 1956/2013, and the liability to pay service tax is on the recipients of service as provided under Rule 2(1)(d)(i)(B) of the Service Tax Rules, 1994. 17. Regarding classification of the service rendered by the Appellant under the category of "Cargo Handling Service" we observe that Board has issued a clarification as to what type of services will fall under the category of "Cargo Handling service" and cited certain illustrations of "Cargo Handling Agents" i.e. Container Corporation of India, Airport Authority of India, Inland Container Depot, Container Freight Stations etc. The relevant portion of the said circular is reproduced below :- "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....
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....d laying down the principles to be followed in respect of the issues raised by AIMTC. 2. The issues raised by AIMTC and the clarifications with respect to those issues are given below : 3. Issue : GTA provides service to a person in relation to transportation of goods by road in a goods carriage. The service provided is a single composite service which may include various intermediary and ancillary services such as loading/unloading, packing/unpacking, transshipment, temporary warehousing. For the service provided, GTA issues a consignment note and the invoice issued by the GTA for providing the said service includes the value of intermediary and ancillary services. In such a case, whether the intermediary or ancillary activities is to be treated as part of GTA service and the abatement should be extended to the charges for such intermediary or ancillary service? Clarification : GTA provides a service in relation to transportation of goods by road which is a single composite service. GTA also issues consignment note. The composite service may include various intermediate and ancillary services provided in relation to the principal service of the road tran....
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....ent note for transportation of goods by road in a goods carriage and the amount charged for the service provided is inclusive of packing, then the service shall be treated as GTA service and not cargo handling service. 5. Issue 3 : Whether time sensitive transportation of goods by road in a goods carriage by a GTA shall be classified under courier service and not GTA service? Clarification : On this issue, it is clarified that so long as, (a) the entire transportation of goods is by road; and (b) the person transporting the goods issues a consignment note, it would be classified as "GTA Service". 6. Pending disputes on the above issues may accordingly be decided expeditiously. 7. Trade & field formations may be informed suitably. 8. Hindi version will follow." 9. Admittedly in this case, the assessee is providing transportation service, accordingly, the loading and unloading is incidental thereto. Therefore, the activity undertaken by the assessee falls under the category of "Transport of Goods by Road" , not under the category of "Cargo Handling Service". Therefore, we hold that the adjudicating authority has rightly dropped the dema....
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....e excavation or drilling underground, as may be, but also to the peripheral area on the surface. The said definition has no apparent nexus with the activity undertaken and the service rendered."" 11. Further, we find that the Circular No.334/1/2008-TRU dated 29.02.2008, has clarified that the method of charging or invoicing does not in itself determine whether the service is a single service or multiple service. Single price normally suggest single supply though not decisive. The real nature and substance of the transaction and not merely the form of the transaction should be the guiding factor to decide the classification. The classification is to be determined based on essential feature or dominant activities. 12. We further find that this issue has also been examined by this Tribunal in the case of M/s Abey Mining Private Limited Vs. Commissioner of Service Tax II, Kolkata in Service Tax Appeal No.75839 of 2015 vide Final Order No.75611/2024 dated 22.03.2024, wherein this Tribunal has held as under : "6.3. Regarding the demand of service tax under 'Mining Services', the Appellant submits that the Service Tax demand has been raised by merely comparing ST-3 ....