CESTAT Quashes Service Tax Demand On Transport Of Goods With Loading And Shifting From Private Railway Siding To Stacking Yard

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has quashed the service tax demand on the transport of goods with loading and shifting from private railway sidings to stacking yards.The bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) observed that the main activity of the assessee or appellant is the transportation of materials, not loading and unloading, and transportation is the main service, so it can be classified under the Goods Transport Service.M/s Bhadoria Transport Company was in the business of transporting goods. Bhadoria Transport entered into a contract and received work orders from M/s Usha Martin Limited, Gamharia, Jharkhand. The work undertaken was the transport of goods along with the loading and shifting of materials from the private railway siding to the stacking yard.Bhadoria Transport was carrying out the services and registered itself as a provider of Goods Transport Agency (GTA) services.Usha Martin Limited was paying the service tax under the category of GTA service. The service tax was paid until May 16, 2008, and whereafter, as per DGCEI, the service tax was paid under the category of cargo handling service.A show-cause notice was issued alleging that Bhadoria Transport has provided the services of loading and unloading of railway wagons along with transportation in some cases under composite work orders received from Usha Martin, which allegedly were taxable under Cargo Handling Service w.e.f. 01.01.2005 and not under GTA service to Usha Martin, on which allegedly service tax was payable. The SCN stated that Usha Martin has allegedly evaded payment of service tax in contravention of the provisions of the Act by way of collusion, misstatement, etc.Bhadoria Transport contended that from the work orders or contract, the main activity was the transportation of goods, and other services, namely, loading and unloading, handling stacking, and watching, were incidental to and formed an inextricable part of the main activity of transportation of the subject goods by road or rail through a goods carrier. The composite service, which consisted of various ancillary services such as loading and unloading, packing and unpacking, transhipment, temporary warehousing, etc., is a GTA service in terms of the clarification of the CBEC Board by Circular No.104/07/2008-ST dated August 6, 2008.The department contended that the adjudicating authority has held that the composite contract should not be broken into its components and classified separately. Therefore, the main provision is loading and unloading, and therefore, the merit classification is cargo handling service.The court held that the demand under Cargo Handling Service is not sustainable; hence, the whole of the demand confirmed is set aside, and consequently, the penalty imposed on the appellants is also set aside.Counsel For Appellant: Samir ChakrabortyCounsel For Respondent: Mihir RanjanCase Title: M/s Usha Martin Limited Versus Commissioner of Central Excise, Customs & Service Tax, JamshedpurCase No.: Service Tax Appeal No.238 of 2011Click Here To Read The Order

CESTAT Quashes Service Tax Demand On Transport Of Goods With Loading And Shifting From Private Railway Siding To Stacking Yard

Mariya Paliwala

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