Transportation of Goods involving Loading and Unloading of Tipper at Railway Siding which can’t be Taxed under Cargo Handling Service: CESTAT [Read Order]

The Kolkata bench of the Customs, Excise And Service Tax Appellate Tribunal (CESTAT) has ruled that, the transportation of goods which incidentally involving loading of tipper/unloading of tipper at Railway Track head/Railway Siding which cannot be taxed under the category of Cargo Handling Service simply because rates for loading of tipper at Dump Yard and unloading of tipper at Railway Siding is not provided separately.

The Appellant executed composite activity of local transportation of Iron Ore from mines dump yard to the Rail Track Heads/Railway Siding up to lead of ½ km in Automated Tipping Trucks, with incidental loading into such tipping trucks & automated unloading at the Railway Track Head/Railway Siding. Department has confirmed Service Tax on such activities. It appears from the Show Cause Notice that the said transportation for short distance is treated by the department as “Shifting” for short distances which the Appellant has claimed to be transportation but as per the show causing authority, it cannot be transportation activity but Cargo Handling activity. As per the show cause notice, the rate is composite and no charges for loading, unloading is collected separately by the Appellant. There is a separate contract for local transportation and wagon loading activities and the two contracts are distinct & separate and in the instant case service tax is already paid by the Appellant on the wagon loading activities but no service tax is paid on the transportation/shifting activities on which service tax is now demanded.

The appellant submits in the light of cases of Shri Raj Coal Carriers P. Ltd. Vs CCE and M/s Lakhanpur Coal Carriers Vs CCE that they are transporter and not Cargo Handling Agents and to attract the levy unless the twin test of handling of “cargo” by a “Cargo Handling Agent” is not satisfied, no tax can be demanded by implication and without the clear authority of law. In the instant case, it is nobody’s case that the Appellant is a Cargo Handling Agent. He contends that transportation for short distance cannot be taxed under the category of Cargo Handling Services but as transport services.

The Learned Authorized Representative for the Respondent supports the impugned Order. It is contended by the learned Authorized Representative that since the contract is composite for loading of tipper, transportation up to ½ km and unloading at Railway Track Head and under the contract the rate is composite, hence, as per Circular No.B11/1/2002- TRU the entire transportation charges shall be taxable under the category of Cargo Handling Services.

Regional bench comprising of Judicial Member P.K.Choudhary and Technical Member P.V.Subba Rao held that the contract is for the transportation of goods which incidentally involving loading of tipper/unloading of tipper at Railway Track head/Railway Siding which cannot be taxed under the category of Cargo Handling Service simply because rates for loading of tipper at Dump Yard and unloading of tipper at Railway Siding is not provided separately. The Learned Commissioner (Appeal) has erred in placing reliance on Circular No.B11/1/2002-TRU which does not apply to the facts of the instant case. Further, it is no body’s case that the Appellant is a Cargo Handling Agent to attract the levy under the category of Cargo Handling Services. Accordingly, set aside the impugned order and allow the Appeal.