Loading, Unloading and Transportation of Coal by Tippers to Railway Siding are not 'Cargo Handling Service': CESTAT [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the activities of loading of coal into tippers by pay loaders, transportation of coal by tippers to the railway siding and unloading of coal, are not chargeable to service tax under the cargo handling service as defined under section 65(23) of the Act for the period prior to 01.06.2007.

The appellant, Mirza Hasam has challenged the order passed by the service tax department contending that the services are not taxable under the above said category.

The Tribunal bench comprising Justice Dilip Gupta, President and Mr. P.V. Subba Rao, Member (Technical) observed that the Supreme Court, while dealing with a similar issue in the case of Singh Transporters vs. Commissioner of Central Excise, Raipur, has held that the activity would appropriately be classified under the head “transport of goods by road service” and the activity does not involve any service in relation to “mining of mineral” as contemplated under section 65(105) (zzzy) of the Finance Act. The Supreme Court also held that the definition of “mines” has no apparent nexus with the activity undertaken under the service rendered.

Relying on the Apex Court ruling, the Tribunal observed that the activity undertaken by the appellant would fall under the head „transportation of goods by road service‟. The Commissioner (Appeals) was, therefore, not justified in holding that the appellant had undertaken the activity of mining service w.e.f. 01.06.2007.

“It would also not possible to sustain the order passed by the Commissioner holding that these activities undertaken by the appellant prior to 01.06.2007 would fall under the category of „cargo handling service‟. This is for the reason that the Supreme Court categorically held that the activity undertaken by the appellant would fall under the heading “transport of goods by road service”. The appellant had, therefore, not provided “cargo handling service” prior to 01.06.2007 under section 65(23) of the Finance Act,” the Tribunal said.

To Read the full text of the Order CLICK HERE

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