TaxTMI 
TaxTMI 
2026 (2) TMI 968
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....n, finance, construct, own, operate and maintain a Lignite Transportation System for transportation of lignite from Neyveli Lignite Corporation (NLC) to the power plant at Uttangal. The power plant at Uttangal was owned by ST-CMS who had entered into a Fuel Supply Agreement with NLC for the supply lignite. 3. The scope of work entrusted to the appellant included necessary equipment and facilities at NLC's loading end and power plant end, railway sidings from Southern Railways main line both at the loading end and the power plant end, removal of lignite from the NLC stockpile, loading, road transportation to the railway siding, unloading into hoppers, conveyance through conveyors and silos, loading into railway wagons, and the fully loaded rake is brought by the railways to the power plant siding, thereafter unloading at the power plant siding and further conveyance to storage or plant systems. 4. The department formed a view that the activities undertaken by the appellant constituted cargo handling services and were classifiable under "Cargo Handling Service" in terms of Section 65(105)(zr) read with Section 65(23) of the Finance Act, 1994. It appeared to the Department that ....
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.... and the nature of activity undertaken prior to and during the impugned period remained the same. He would argue that for a service to be classified under Section 65(23)(b) of the Finance Act, 1994 (the Act), it is sine qua non that the Appellant should be engaged in the activity of "packing" together with the transportation of goods. It is contended that the Appellant is not engaged in "packing" of lignite before its transportation. The Impugned Order does not state anywhere that the Appellant is engaged in the activity of packing. Thus, it is not the case of the Department that the Appellant undertakes the activity of "packing" with transportation of goods. Therefore, the amendment made to Section 65(23) will have no bearing to the instant case as the services provided by the Appellant will still be outside the ambit of 'cargo handling service'. 9. The Ld. Counsel thereafter contends, without prejudice to the earlier submissions, that assuming without admitting that the Appellant is engaged in provision of composite services including transportation, loading, unloading, construction and maintenance of LTS, etc., still, the service which gives it its essential character is the ....
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....itted that in 2003 itself, the Superintendent of Central Excise, Cuddalore sought details from the Appellant in respect of the amounts received from ST-CMS pertaining to 'Cargo handling service' vide letter dated 29.08.2003. In this regard, vide letter dated 01.09.2003 itself, the Appellant submitted that they are not engaged in carrying out any clearing and forwarding operations for ST-CMS. Further, vide letter dated 26.09.2003, the Appellant once again reiterated the submissions made. It is thus submitted that from 2003 itself, relevant facts were already within the knowledge of the Department and therefore, there can be no suppression of information with the intent to evade payment of tax. Reliance in this regard is placed on the case of Pushpam Pharmaceuticals Company v. Collector of Central Excise, Bombay, 1995 (78) E.L.T. 401 (SC). 13. Ld. Counsel also argued that non filing of ST-3 Returns cannot amount to suppression of facts without proving the intent to evade payment of service tax placing reliance on the decisions in M/s. International Air Charter v. Commissioner of Central Tax (Appeals-II), Delhi, [2023 (12) TMI 1004-CESTAT New Delhi] and Mahanagar Telephone Nigam Li....
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....duced in writing and submitted, he would contend that the definition of 'Cargo Handling Services', as under Section 65(23) has a 'means', 'includes' and 'does not include' portion. While the 'does not include' does not have a dispute in the impugned case, it is submitted that the 'means' portion intends to categorically include the activities of loading, unloading, packing or unpacking of cargo, which terms are self-explanatory. 18. Ld. A.R. contends that the 'includes' clause of the definition is to be construed only as clarificatory elaboration of the whole without extending the normal meaning of the 'means' clause and that the word "includes" is used as an explanation in the sense of 'means' to make the definition exhaustive. In support of these contentions as to how the terms 'means', 'means and includes' etc. are to be understood, reliance was placed on the decisions in Commercial Taxation Officer, Udaipur Vs Rajasthan Texchem Ltd, 2007 (3) SCC 124; 2007 AIR SCW 757, Smt. S Vanitha Vs The Deputy Commissioner, Bengaluru Urban District & Ors., 2020 (12) TMI 1213 - Supreme Court, The Executive Engineer & Anr. Vs M/s Sri Seetaram Rice Mill,2012 (2) SCC 108; 2011 (10) TM....
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....ce', the classification as 'Cargo Handling Service' is the only, inescapable, and automatic inference. It is reiterated that in the impugned case, the activity of transportation is incidental to the primary activity of handling of cargo since huge part of the service activity is committed to loading and unloading of the cargo. 21. Ld. A.R. further contends that, notwithstanding the foregoing, clause (b) of the inclusive part of the definition of Cargo Handling Service in Section 65(23), which seeks 'services of packing along with transportation of cargo or goods' was introduced only to cover the services provided by packers and movers. The Appellants have argued that since no packing is involved in their case, lignite being a bulk commodity, this sub-clause would have no applicability in the impugned case. It is submitted that this argument would serve no benefit to their cause and case since includes' portion' of the definition is only an illustrative explanation so that the scenario described therein is not interpreted in a manner to be excluded from the 'means' portion of the definition. It is argued that by no stretch of imagination, the subclause (b) of Section 65(23) is (m....
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....together on a new footing which has been held not applicable to the Appellant, in their favour, in the Impugned Order. It is submitted that the very basis of confirming the demand of Service tax in the Impugned Order was on the ground of inclusion of clause (b) to the definition of 'cargo handling service' provided under Section 65(23) of the Finance Act, 1994. In this regard, it is submitted that the Ld. Commissioner has itself given a positive finding that the term "Cargo" had a restrictive meaning and therefore, only with the amendment in the inclusive clause w.e.f., from 16.05.2008, the Appellant, who is dealing with 'goods' became liable to be taxed under this service head. 26. It was contended that, the Respondent at best, if aggrieved by any portion of the Impugned Order, ought to have challenged this portion of the Impugned Order-in-Original on the "means" clause of the Section 65(23) of the Finance Act, 1994, by way of an Appeal or Cross-objections. Without undertaking the same, the Respondent cannot seek to agitate the said point in the Appellant's appeal. Reliance was placed on the decisions in Servo Packaging Ltd. v. CESTAT, Chennai, 2016 (340) E.L.T. 6 (Mad.) and Ja....
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....al into the wagon and there was no activity of transportation undertaken. Therefore, the court in Coal Carriers (supra) had no occasion to consider whether a composite contract can be said to be covered under the category of 'Cargo Handling Service'. It was submitted that this decision has also attained finality as the Civil Appeal filed by Department before Hon'ble Supreme Court has been dismissed. 31. It was submitted that the Appellant's case is similar to that of Khandelwal Transport case and is no way similar to the Coal Carriers case, as what is involved in the present appeal is not a mere loading activity but composite contract of transportation of the lignite from one place to another through road, rail and conveyor belt, the essential service being that of transportation through rail. In light of the same, it was argued that the activities performed by the Appellant cannot be classified under "cargo handling service" and the prayer to allow the appeal was reiterated. 32. The Ld. A.R. in his written submission reiterated the Respondent's earlier submissions and further contended that a passing reference made by the Adjudicating Authority to clause (b) of the inclusive....
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....vices." 38. We notice that in the impugned order, the Adjudicating Authority has in para 4.6, held as under: "4.6. Coming to the issue of taxability of the service involved, I find that the assessee is involved in transportation of lignite in a comprehensive manner, that is to say, it is entrusted with the responsibility of picking up the mineral directly from the stockpile of NLC, loading it on to the trucks and transporting by trucks, wagons and ensuring delivery of the mineral through conveyor system to the Power Generation facility of M/s. ST-CMS. This involves a host of other activities as well, such as building and maintaining the Lignite Transport System ( LTS), wherein the assessee is required to construct and maintain Railway Sidings, Loading collection point, Unloading collection point, the access road leading to the collection points, Stock pile, weigh bridges, etc. This activity of the assessee is much more than mere transportation of goods." 39. The adjudicating authority has also gone on to note the definition of 'cargo handling service' prior to the period involved herein. Thereafter, emphasising on the 'conscious addition' of clause (b) to the definit....
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....r services like loading, unloading, unpacking, but does not include, handling of export cargo or passenger baggage or mere transportation of goods". 42. We find that for a service to be classified as cargo handling service under Section 65(23)(b) of the Act, it is imperative that the service provider should be engaged in the activity of "packing" together with the transportation of cargo or goods. Thus, the following activities will be includable under Section 65(23)(b) of the Act: i) Service of 'packing together with transportation' of cargo, with or without one or more of other services like loading, unloading and unpacking; and ii) Service of 'packing together with transportation' of goods, with or without other services like loading, unloading and unpacking; The usage of the preposition 'with' along with the adverb 'together', to form a compound preposition linking the two nouns packing and transportation in clause (b) makes it clear that the emphasis is on the conjoint nature of the service of packing and transportation. Effectively, what is being described is a bundling of the services of preparation of goods for transit and their subsequent movement i....
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....ertakes the activity of packing together with the transportation of goods, the service rendered by the appellant would itself not come within the ambit of Section 65(23)(b) as "cargo handling service", the issue of whether the service rendered by the appellant would qualify as taxable service under section 65(105)(zr) pertaining to cargo handling services is rendered otiose thereby also obviating any necessity for a further discussion of whether or not the appellant can be said to be a cargo handling agency. 45. We find that the Ld. A.R., on behalf of the Respondent, had strenuously urged that the Appellant would come within the main limb of the definition defining what "cargo handling service." However, it is seen that the Ld. Adjudicating Authority has confirmed the demand of Service tax in the impugned order on the basis of what he has chosen to term as "the conscious addition" of clause (b) to the definition of 'cargo handling service' provided under Section 65(23) of the Finance Act, 1994. Furthermore, the Ld. Adjudicating Authority has also observed that the term "Cargo" had a restrictive meaning and with his emphasis on the term "goods", he has made it amply clear that wh....
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.... law, should not aggravate the situation of the one who exercises it. 26. Had the assessee not filed an appeal, it would not be placed in a situation of inviting an adverse order, on the aspect of clandestine removal. A party who files an appeal, expects that the appellate authority would only address the grounds of appeal, made against the order impugned, and the appellant does not expect the appellate authority to go beyond the scope of appeal, and pass an order, adverse to his interest, in which event, it certainly creates a worse situation for the appellant/assessee, in his own appeal, than the order under challenge." (emphasis supplied) 47. Given our findings aforesaid that Revenue having neither preferred an appeal or filed appropriate cross-objections as per statutory procedure, cannot now contend that the activity undertaken by the Appellant is covered under the "means" clause of the Section 65(23), we find that it is not necessary for us to address the contentions to the contrary on this aspect, advanced by the appellant. Furthermore, given our elucidation of what constitutes cargo handling service under section 65 (23) (b) and our considered view that....
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....GST Act, 2017 after the advent of GST Regime. Last, if a lis can be conclusively decided on narrow points that arise in a particular proceeding, it is the discretion of this Tribunal to decide the matter only on such points, without dealing with all other arguments that are raised in the alternate. 49. Turning to the question of whether the finding of the Adjudicating Authority that the extended period is invokable is tenable, we find that the Ld. Adjudicating Authority has confirmed the demand of Service tax by invoking the extended period of limitation under proviso to Section 73(1) of the Finance Act, 1994 on the ground that nonregistration of the Appellant with the Service tax Department, non-filing of Service tax Returns and non-payment of appropriate Service tax amounts to suppression of facts with intention to evade payment of tax. 50. We find that the appellant has furnished cogent reasons in its reply substantiating its bonafide belief that Service tax is not payable on the services rendered by the Appellant, premised on the multi modal nature of its transportation of lignite, which according to the appellant was predominantly using rail service on which the levy was....