The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no separate demand of service tax was made to an individual service of transportation under the category of ‘Cargo Handling Service’.
Maa Kalika Transport Private Limited, the appellant assessee claimed that they had provided “Transportation of Coal Services” up to a distance of 200 km against various work orders.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the service tax demand including Cess along with interest and imposing a penalty.
Kartik Kurmy, the counsel for the assessee contended that the service rendered by them is “Transportation Services”, where service receivers are liable to pay service tax. Accordingly, they had not collected service tax from their customers.
Further submitted that the demand of Service Tax had been confirmed under the category of “Cargo Handling Service” without any allegation in the show cause notice on this count.
Also submitted that the assessee transported coal within a distance of 180 KM to 200 KM, which was rightly classifiable under the transportation of Goods Service (GTA) and the services cannot be taxed under “Cargo Handling Service”.
J. Chattopadhyay, the counsel for the revenue contended that the assessee had not discharged their service tax liability on this amount and accordingly the notice was issued and no effort was made by the department to ascertain whether the amount received by the assessee was on account of rendering of any taxable service on which the assessee was liable to pay service tax.
The bench observed that when a contract was entered for a composite contract for transportation service including various intermediate or ancillary services provided concerning the principal service of road transport of goods like loading/ unloading, packing/unpacking, transshipment, warehousing, etc., which are provided in the course of transportation, such contract cannot be vivisected.
The two-member bench comprising Ashok Jindal (Judicial) and K.Anbazhakan (Technical) held that individual services in the contract of transportation cannot be vivisected to demand service tax from the assessee under the category of ‘Cargo Handling Service’ while allowing the appeal filed by the assessee.
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