The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand on cargo handling service and held that the loading and shifting of materials from private railway siding to stacking yard is goods transport service.
M/s Bhadoria Transport Company (Appellant No.2) was in business of transport of goods and during the impugned period, the Appellant No.2 entered into a contract and received work orders from Appellant No.1, M/s Usha Martin Limited, Gamharia, Jharkhand. The works undertaken for Appellant No.1 was transport of goods along with loading and shifting of materials from the Private Railway Siding to Stacking Yard.
Pursuant to investigation carried out by DGCEI, a show-cause notice was issued for the period 1st October, 2004 to 31st March, 2009 alleging that during the impugned period, the Appellant No.2 has provided the services of loading and unloading of railway wagons along with transportation in some cases under composite work orders received from Appellant No.1, which allegedly were taxable under Cargo Handling Service w.e.f. 01.01.2005 and not under GTA service to Appellant No.1, on which allegedly service tax was payable, but not paid, except to the extent stated in the show cause notice.
The counsel for the Appellant No.2, submitted that the service rendered by the Appellant No.2 to Appellant No.1, are correctly classifiable under GTA Service. Therefore, the composite service, which consisted various ancillary services, such as, loading/unloading, packing/unpacking, transshipment, temporary warehousing etc., is GTA service in terms of the clarification of CBEC Board by Circular No.104/07/2008-ST dated 06.08.2008.
A Two-Member Bench comprising Ashok Jindal, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “We hold that as the main activity of the appellants is transportation of goods, therefore, merits classification of the above said service in question is Goods Transport Service. Therefore, the demand under Cargo Handling Service is not sustainable, hence, whole of the demand confirmed against Appellant No 2 is set aside and consequently, the penalty imposed on the appellants are also set aside.”
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