Relief for South Eastern Coalfields: CESTAT Rules Silo Loading Charges Part of Coal Price, not Subject to Service Tax [Read Order]
CESTAT Ruled that Silo Loading Charges are part of the coal price and not taxable under Cargo Handling Service
![Relief for South Eastern Coalfields: CESTAT Rules Silo Loading Charges Part of Coal Price, not Subject to Service Tax [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/03/Relief-for-South-Eastern-Coalfields-CESTAT-Rules-Silo-Loading-Charges-Part-Coal-Price-Subject-to-Service-Tax-taxscan.jpg "Relief for South Eastern Coalfields: CESTAT Rules Silo Loading Charges Part of Coal Price, not Subject to Service Tax [Read Order]")
The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that Silo Loading Charges collected by South Eastern Coalfields Limited (SECL) were part of the coal price and not a separate taxable service under Cargo Handling Service. MSME Dues Stuck? Recover Payments Legally - No Court Needed. Click here to know more! South Eastern Coalfields Limited...
The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that Silo Loading Charges collected by South Eastern Coalfields Limited (SECL) were part of the coal price and not a separate taxable service under Cargo Handling Service.
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South Eastern Coalfields Limited (SECL), the appellant, is a public sector undertaking engaged in coal mining and sales. The company operates multiple mining areas in Chhattisgarh and Madhya Pradesh and sells coal at Pithead Price, as notified by Coal India Ltd. SECL collected Silo Loading Charges at a rate of Rs. 18-20 per ton for automated coal loading onto railway wagons.
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The department alleged that Silo Loading Charges constituted a taxable service under Cargo Handling Service, classified under Section 65(23) of the Finance Act, 1994. The Department claimed that these charges were separate from the sale of coal and issued a show cause notice demanding service tax of Rs. 19,85,61,673, along with interest and penalties under Sections 76, 77, and 78 of the Finance Act, 1994. The PCIT upheld the demand. Aggrieved, the appellant appealed before CESTAT.
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The appellant’s counsel argued that Silo Loading Charges were part of the coal price and not a distinct service. Further, they argued that it had already paid VAT on these charges, making the imposition of service tax a case of double taxation, which is impermissible as per the Supreme Court’s ruling in Bharat Sanchar Nigam Ltd. v. UOI (2006).
The revenue countered that Silo Loading Charges were separately collected, indicating that a service was provided beyond the sale of coal. The Department maintained that automated Silo Loading was not an intrinsic part of the coal sale but rather a distinct cargo handling service, making it liable for service tax.
The two-member bench comprising Dr. Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) observed that the appellant’s case was covered by previous CESTAT decisions, including its own ruling in the appellant’s favor in 2018. The tribunal explained that service tax and VAT cannot be imposed on the same transaction and that Silo Loading Charges were part of the overall coal price. The tribunal set aside the demand for service tax, interest, and penalties imposed by the Department.
To Read the full text of the Order CLICK HERE
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