Mere Transportation of Goods will not be considered as Cargo …
The Customs Excise and Service Tax Appellate Tribunal[1] (CESTAT) bench of Ramesh Nair and Raju quashed the order to pay service tax and ruled that mere transportation of goods will not be considered as Cargo Handling Service to charge service tax on it. The panel observed that the definition of cargo handling service specifically excludes mere transportation of goods from the ambit of cargo handling services.
Briefly stated the facts of the case are that the appellants are engaged in providing various taxable services. The scrutiny of the document submitted by the appellant revealed that it has not paid appropriate Service tax in respect of handling & transportation of goods by multi-mode namely road-rail road, Sea-road etc., which appeared to be classifiable under "Cargo Handling Service" on full value till 14.11.2009. The authorities issued a demand notice to pay service tax.
The counsel of the appellant stated that the appellant rendered only transportation services and in respect of these services, it cannot be called upon to discharge service tax under the head cargo handling services. Further stated that the definition of cargo handling service specifically excludes mere transportation of goods from the ambit of cargo handling services. Since, the transportation is the main element of the services provided by the appellant, the handling of the cargo, if any, was incidental to the transportation service, consequently the said activity cannot be taxed under the head cargo handling service.
The bench observed that the main work of the appellant during the disputed period was transportation of goods and further in the present matter there was no element of packing involved. Further observed the finding of the Commissioner that appellants activity is not covered under the "Cargo Handling Service". It was held that the services rendered by the appellant did not qualify to the definition as cargo handling service.
Additionally held that "Rail Freight" and "Sea Freight" service tax[2] cannot be demanded under the Cargo Handling Service. The tribunal observed that the non-levy, if any, was not the result of the appellant's bad faith intentions and that the appellant had not omitted information or made false statements with the intent to dodge paying service tax. Limitations are another issue that affects demand.
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ARKAY LOGISTICS LIMITED vs C.C.E. & S.T
CITATION: 2023 TAXSCAN (CESTAT) 379
Counsel for Appellant: Shri Vishal Agarwal & Ms. Dimple Gohil
Counsel for Respondent: Shri Prabhat K. Rameshwaram
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