TaxTMI 
TaxTMI 
2025 (12) TMI 369
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.... handling, transportation of goods services provided by the Appellant under the taxable category "Clearing and Forwarding Agent Services" for the F.Y. 2009-10 to F.Y. 2012-13 [Demand - 23,25,343/-] In the instant case service tax has been demanded and confirmed on the services of loading/unloading, handling, transportation of goods from Railway siding to Haldia/Paradeep/Vizag port under the taxable category "Clearing and Forwarding Agent Services". The Appellant has categorized the said services as 'Cargo Handling services' and claimed exemption from service tax, as cargo handling service provided in connection with export cargo has been specifically exempted under the definition of 'Cargo Handling Service' as defined under Section 65(23) of the Finance Act. 2.2 In this regard, the Appellant submits that they were awarded a work order bearing No. RML/2008-09/3970 dated 26.07.2008 issued by M/s. Rungta Mines Ltd. The scope of work included unloading and handling of the material from Nimpura railway siding and then transporting the same by road to Haldia port and unloading thereof (inside the port premises). Similarly, work order bearing no. A/1017/07-08 dated 2....
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....erse charge mechanism when service tax payment made to the service provider (transporter) under forward charge for the F.Y. 2010-11 to F.Y. 2012-13 [Demand - 21,61,334/-] 3.1. In the instant case, the Appellant submits that the demand has been raised and confirmed on transportation work awarded to M/s. Shiv Construction and M/s. Neel Enterprise for transportation of clinker from Railway siding to the MCL cement factory. The impugned order has confirmed the demand on the premise that the liability to pay service tax is on the service recipient under reverse charge mechanism in terms of Section 68(2) of the Finance Act read with Rule 2(1)(d) of the Service Tax Rules, 1994. In this regard, the Appellant submits that they had awarded a contract to M/s. Shiv Construction and M/s. Neel Enterprise for transportation of clinker from Railway siding to the MCL cement factory. As per the terms and conditions of such orders, service tax was required to be charged extra with the invoice value. Since, the transporters were separately registered under the provisions of the Finance Act, they raised bills on the Appellant for transportation charges and charged service tax thereon. The Appellant ....
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....ruction and M/s. Neel Enterprise (as referred above) for providing taxable output service and availed Cenvat credit amounting to Rs. 21,61,334/- on the strength of invoices/bills issued by the said transporters. In the instant case, service tax has been paid by the provider of the service and apart from the technicalities, the benefit of credit which is otherwise admissible under the law cannot be denied, particularly when there is no dispute about the admissibility of service being an "input service", used for providing taxable output service by the Appellant. 4.2. The Appellant submits that it is a well-settled position in law that procedural technicalities cannot stand in the way of availing Cenvat credit. Reliance in this regard is placed upon the judgment of the CESTAT Mumbai, in the matter of M/s. Rucha Engineers Pvt. Ltd. vs. CCE[2015 (39) STR 518 (Tri. - Mumbai)]. Reliance is also placed in the case of Umasons Auto Compo Pvt. Ltd. vs. CCE&C [2014-TIOL-126-CESTAT-Mum. 5. Issue 4 - Applicability of service tax on transportation services provided within the mining area under the taxable category "Mining Service"[Disputed demand of Rs. 1,34,07,613/for the F.Y. 2010-11 to ....
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.... the transportation of goods from pit-head to the railway sidings is a post mining activity and is more appropriately classifiable under the taxable category transport of goods by road service[Section 65(105)(zzp)]and not under the taxable category "mining of mineral, oil or gas" [Section 65(105)(zzzy)]. 5.5. Similar views have also been taken in the following cases: - M/s Karamjeet Singh & Co. Ltd. vs. CCE & ST, Raipur [2017 (9) TMI 1125] - Tribunal, New Delhi - M/s Ambey Mining Private Limited vs. CST-II [2024 (3) TMI 1106]- Tribunal, Kolkata - M/s. BLA Infra-GKMWPL (JV) vs. CST, Bolpur[2025 (3) TMI 266]- Tribunal, Kolkata] - CST-I vs. M/s Tycoon Industries Private Limited [2022 (8) TMI 281]- Tribunal Kolkata - CCGST vs. M/s Baghel Brothers [2023 (4) TMI 1022] - Tribunal Kolkata 5.6. Thus, relying on the decisions cited supra, the Appellant submits that the demand of service tax confirmed in the impugned order on this count is not sustainable. 6. The Appellant further submitted that extended period cannot be invoked in this case, as there was no suppression with an intention to evade duty. The demand has been made on the basis....
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....per Section 65(25) of the said Act, "Clearing and Forwarding Agent" means any person who is engaged in providing any service, either directly or indirectly connected with the clearing and forwarding operations in any manner to any other person and includes a consignment agent. The said definition is reproduced below for your ease of reference: (25) "clearing and forwarding agent" means any person who is engaged in providing any service, either directly or indirectly, connected with the clearing and forwarding operations in any manner to any other person and includes a consignment agent; 9.2. We find that the scope of the aforesaid taxable category was clarified vide issuance of Trade Notice No. 87/97 dated 14.07.1997 of the Madurai-2 Commissionerate, wherein it has been clarified as under: 2. Clearing and Forwarding Agents 2.1 Clearing and forwarding agent has been defined as any person who is engaged in providing any service, either directly or indirectly, connected with clearing and forwarding operations in any manner to any other person and includes a consigning agent. The taxable service has been defined as any service provided to a client, by C&F ....
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....o mean 'any services provided or to be provided to any person, by a cargo handling agency in relation to cargo handling services'. Further, the term 'cargo handling services' has been defined under Section 65(23) of the Finance Act, to read as under: (23) "cargo handling service" means loading, unloading, packing or unpacking of cargo and includes- (a) 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; and (b) service 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 applied] 9.5. The scope of the aforesaid category has been clarified by CBEC vide Circular F.No.B11/1/2002-TRU dated 01.08.2002, the relevant part of which is reproduced herein below for ease of reference: Cargo handling service 1. ........................
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....involves physical handling of cargo such as loading, unloading, packing or unpacking, cargo stacking/unstacking and transportation of goods. The same is purely operational/ physical activity where the focus is on handling of goods. Further, handling of export cargo has been categorically excluded from the definition and scope of 'Cargo Handling Services.' 9.7. In the instant case, we find that the Appellant has been awarded the contract by M/s Rungta Mines Ltd. and M/s Essel Mining & Industries Ltd. for unloading of iron ore fines at Nimpura and Panskura Railway siding and outward dispatch of the same to Haldia/Vizag/Paradeep/Kolkata port by road/railways respectively. We find that the above scope of work is squarely covered under the taxable category of 'Cargo Handling Services' and it would not be falling under the taxable category of Clearing and Forwarding services since the Appellant is neither acting as an agent of the Principal nor is involved into any logistics, documentation and maintaining records, distribution and coordination services etc. The services provided by the Appellant mostly involved unloading the material from the railway sidings and then transporting the ....
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....ort used for movement of such cargo. The relevant portion of the said decision is reproduced hereinbelow for ease of reference: 12. We have examined the sample agreement dated 22-7-03 produced for examination. That was executed between the first appellant and Mahanadi Coalfields Ltd. The sample work order dated 23-5-03 forming part of the agreement was also examined. That exhibits that the same forms part of the agreement. That further shows that there was hiring of pay loader for transferring of coal. The work order simply shows that there was a hiring of pay loader but the obligation of the appellants did not end with letting out of the pay loader. The appellants were required to carry out the object of loading of the quantity required by the work orders within the time frame and the rates were fixed for loading of the goods i.e. coal into Railway wagons. The ld. Advocate in the course of hearing was asked to explain whether the appellants were to simply deliver the pay loader to the Mahanadi Coal Fields Ltd. or anything else to be done. He explained that the appellants were to operate the pay loader and payment of Rs. 2.47 per tonne was to be made by Mohanadi Coal Field....
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.... (i) Provided for freight in special containers or for non-containerised freight; (ii) Provided by a container freight terminal or, by any other freight terminal; and (3) Cargo handling service provided which is incidental to freight. 16. What that appears to be necessity of law for taxation under the class cargo handling service is that the service provided should be relating to or in relation to cargo handling by a cargo handling agency. The service provided should be integrally or inseparably connected with handling of cargo or attributable thereto without being a mere activity of transportation of such cargo since transport service independent of cargo handling is an exception under the scheme of levy by Section 65(23) of the Act. Thus it can be said that loading, unloading, packing or unpacking of cargo and handling of cargo for freight in special containers or non-containerized freight and service provided by container freight terminal or other freight terminal for all modes of transport are subject matter of taxation under the class "cargo handling service". That apart, any activity incidental to freight of cargo is also liable to be taxed....
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....ices include those activities which pertain to clearing of the goods and thereafter forwarding those goods to a particular destination, at the instance and on the directions of the principal. In the process, it may include warehousing of the goods so cleared, receiving dispatch orders from the principal, arranging dispatch of the goods as per the instructions of the principal by engaging transport on his own or through the transporters of the principal, maintaining records of the receipt and dispatch of the goods and the stock available on the warehouses and preparing invoices on behalf of the principal. 9.13. In view of above decisions which are squarely applicable to the facts of the present case, we hold that the activities/services rendered by the Appellant can only get classified under the taxable category 'Cargo Handling Services.' However, since handling of export cargo has been specifically carved out from the purview of leviability of service tax under 'Cargo Handling services' we hold that there is no liability of service tax under the category of "Clearing and forwarding services". 9.14. Thus, we hold that the services rendered by the Appellant are appropriately cl....
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....t to double taxation, which is not tenable in the eyes of the law. 10.2. We find that this issue has been clarified by CBEC vide Circular No.341/18/2004-TRU dated 17.12.04, wherein it has been inter alia clarified that once the transporter/service provider discharges service tax, it shall not be demanded from any other person to avoid double taxation. Accordingly, we hold that the demand of service tax confirmed on this issue in the impugned order is not sustainable. In support of this view, we rely on the decision of the Hon'ble Karnataka High Court in the case of M/s. Zyeta Interiors[2022 (4) TMI 774 -HC Karnataka. The relevant extract of the said judgment is reproduced below: - 9. As regards the issue of double taxation, we find no exception. Whatever the ratio, the tax in its entirety has reached the hands of the exchequer. Merely for the reason that there was no strict adherence to the ratio as envisaged during the relevant point of time for payment of tax insofar as the assessee and the service provider, the assessee cannot be made liable to pay the double tax. What is significant to note is that the discharge of entire tax amount is not disputed. Thus, the re....
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....ce tax on freight charges under reverse charge mechanism and hence they are ineligible to claim Cenvat Credit of input services in accordance with the provisions of Rule 4(7) of the Cenvat Credit Rules, 2004. In this regard, we find that the Appellant had availed GTA services from M/s. Shiv Construction and M/s. Neel Enterprise (as referred above) for providing taxable output service and availed Cenvat credit amounting to Rs. 21,61,334/- on the strength of invoices/bills issued by the said transporters. In the instant case, service tax has been paid by the provider of the service and apart from the technicalities, the benefit of credit which is otherwise admissible under the law cannot be denied, particularly when there is no dispute about the admissibility of service being an "input service", used for providing taxable output service by the Appellant. 11.1. In this regard, we observe that it is a wellsettled position in law that procedural technicalities cannot stand in the way of availing Cenvat credit, which is otherwise eligible to the appellant. Reliance in this regard is placed on the decision of the CESTAT Mumbai, in the matter of M/s. Rucha Engineers Pvt. Ltd. vs. CCE[20....
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....inable and hence we set aside the same. 12. Issue 4 - Applicability of service tax on transportation services provided within the mining area under the taxable category "Mining Service" [Disputed demand of Rs. 1,34,07,613/-for the F.Y. 2010-11 to 2011-12] In the instant case, we find that service tax demand has been confirmed on the services of transportation of excavated iron ore/overburden from one place to another place inside the Karampada iron ore mines under the taxable category "Mining Service". We find that the demand has been confirmed for the following reasons: (i) The terms and conditions of the acceptance letter issued by M/s. Shah Brothers inter alia included "You will pay wages as per Minimum Wages Act and shall follow rules and regulations of Mines Act and other Act and rules in force in a Mines" (ii) Such transportation and other activities were limited within the mining area (iii) Appellant did not provide consignment-wise bills showing the destination of the goods transport. was awarded a work order bearing no. 12.1. We find that the Appellant was awarded a contract vide SB/MLPL/10-11 dated 18.09.2010 and SB/MLPL/11-12 dat....
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....go-round systems etc., and the same is not transported by road, no service tax would be chargeable. Service tax is, however, chargeable under cargo handling service, even if the loading, unloading and similar activities are done using mechanical systems. 12.3. From the aforesaid clarification, it is amply clear that transportation of mineral from pithead to a specified location within the mine or outside the mine are chargeable to service tax under relevant taxable service i.e. Goods Transport by Road Service and not Mining Service. 12.4. In support of our view, we rely on the decision of Hon'ble Supreme Court in the case of Commissioner of Central Excise And Service Tax, Raipur vs Singh Transporters [2017 (7) TMI 494 - SC] wherein it has been held that the transportation of goods from pit-head to the railway sidings is a post mining activity and is more appropriately classifiable under the taxable category transport of goods by road service[Section 65(105)(zzp)]and not under the taxable category "mining of mineral, oil or gas" [Section 65(105)(zzzy)]. 12.5. We also find that similar views have been taken in the following cases: - M/s Karamjeet Singh & Co. Ltd. vs....