Loading or Unloading of Goods in Trailer / Truck in Godown amount to Cargo Handling Service: CESTAT [Read Order]

The Hyderabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that the activity of loading or unloading of goods in trailer / truck in godown amount to cargo handling service for the purpose of imposing Service Tax.

Appellants, under an agreement with a Company, undertake loading and unloading of reels/reams/bundles/pallets in trailers/truck in the godown within the mill premises as per the requirement of company from time to time. The Revenue held that the above activity is subject to service tax under the head “Cargo Handling Service.”

The appellants contended that all the services rendered by them are within the premises of the factory and no part of the services rendered by the appellant is outside the premises of the factory area as is evident from the agreement itself. The term “cargo” refers to goods which are moved by train or truck, airplane or other carrier etc., as there is no transport of goods there is no cargo handling of the goods within the factory their services cannot be called cargo handling services.

The bench noted that for the activity to be classified as cargo handling services, the goods in question must be cargo, i.e., the goods must be put on a motor vehicle or ship or aircraft etc., and moved out of or into factory.

“The contract requires the handing to be done within the godown of the mill premises but is silent on whether this handling is meant for movement within the factory or it is handling of cargo to be shifted out of the factory. Usually, goods are moved within the factory, using material handling equipment such as cranes and forklifts although trucks etc., can also be used. In this case, as per para 3.3 of the agreement, loading & unloading of the reels/reams/bundles/pallets is in trailer/truck in the godown within the mill premises as per the requirement of the company from time to time,” the bench said.

The bench, therefore, held that “If the goods are moved out of the factory or into the factory they meet the definition of “cargo” and the activities of handling it is “cargo handling service”. We, therefore, find that the activity under taken by the appellant/assessee must be classified as cargo handling service.”