2026 (4) TMI 149

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.... issue, in brief, is that the appellant is engaged in providing transport services and are having Service Tax registration under the category of "Transport of service by road". The demand has been raised on the grounds that they had not paid proper Service Tax in respect of certain charges collected by them from their customer towards loading charges / loading service. The Department felt that the said activity would be classifiable under 'Cargo Handling Service' (CHS) falling under Section 65(23) of the Finance Act. The Adjudicating Authority relied on the definition of Cargo Handling Service which, inter alia, provided for inclusion of incidental activities like loading, unloading, packing etc. The Adjudicating Authority relying on certai....

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.... (4) TMI 60 - SC Order] (iv) M/s Hindustan Steelworks Construction Ltd., M/s Visakha Constructions Vs Commissioner of Central Excise & Service Tax, Visakhapatnam - I [2025 (11) TMI 1443 - CESTAT Hyderabad] 4. Further, without prejudice to above argument, he has submitted that the demand is for period 2006-07 to 2010-11 whereas, during the period 2006-07, they had not even crossed the threshold for exemption limit of Rs. 10lakhs, as prescribed and hence entitled to exemption and no Service Tax were required to be discharged for that period. He has also argued on the grounds of invocation of extended period as well as imposition of penalty as there was a reasonable belief for them not to pay the said Service Tax, as other traders ....

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....intended for transportation to the destination of the buyer and therefore this plea is not tenable and said activity has been rightly classified under cargo handling service, even for the period prior to 2008. We have also examined the case laws cited by the appellant. In the case of Commissioner of Service Tax, Ranchi Vs M/s HEC Ltd., supra, it was, inter alia, held that these activities were related to transportation of goods by road service and that is not the issue in the present appeal. Similarly, in the case of M/s Narendre Civil Line Project & Contractor (P) Ltd., supra, is clearly distinguished as the activities weren't considered as taxable, being this mining area. In the case of Arkay Logistics Ltd., supra, again the same activiti....

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....ng a bonafide belief that they were not required to discharge Service Tax liability separately on the loading charges, as there were judgments supporting this view that mere loading of goods etc could not be an activity covered under CHS. Further, they were paying VAT on sale of goods and therefore, they felt that they said loading would be relatable to sale and cannot be subjected to Service Tax. In this regard the reliance placed by the appellant on the judgment of Hon'ble Karnataka high Court, supra, for waiver under Section 80 merits consideration. The Hon'ble High Court examined the scope of Section 76, 77, 78 and 79 and held that if reasonable cause for such failure to pay can be established then the authorities can waive such penalti....