Custom, Excise & Service Tax Tribunal
N.C.Paul&Amp;Co. vs Coms,C.Ex - Bolpur on 17 December, 2019
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
EAST REGIONAL BENCH : KOLKATA
Service Tax Appeal No.132 of 2009
(Arising out of Order-in-Original No.38/Commr./Bol/2009 dated 23.02.2009 passed
by Commr. of Central Excise, Bolpur)
M/s N.C.Paul & Company
Ukhra, Burdwan, Dist.-Burdwan, West Bengal
Appellant
VERSUS
CCEx., Bolpur
SIAN, Bolpur, Birbhum, West Bengal
Respondent
Appearance:
Shri Kartick Kurmy, Advocate for the Appellant Shri A.Roy, Authorized Representative for the Respondent CORAM:
HON'BLE SHRI P. K. CHOUDHARY, JUDICIAL MEMBER HON'BLE SHRI BIJAY KUMAR, TECHNICAL MEMBER FINAL ORDER NO......76934/2019 DATE OF HEARING : 24.10.2019 DATE OF DECISION/PRONOUNCEMENT : 17 December, 2019 PER P.K.CHOUDHARY :
1. This appeal is arises out of Order (Original) No.38/Commr./BOL/09 Dated 23-02-2009 passed by Ld.Commissioner, Central Excise, Bolpur.
2. The facts of the case in brief are that during the period 16-08-
2002 to 31-03-2007, the Appellant provided transportation of Coal including incidental loading/unloading to various sites of ECL (M/s Eastern Coalfields Ltd.). The Appellant also provided loading of Coal into Tippers for transportation within the mines and further provided loading of coal into Railway Wagon for outward transportation.
3. The activities of transportation of coal with incidental loading/unloading is provided by the Appellant to ECL, Sonpur Bazari, 2 S.Tax Appeal No.132/2009 which involves loading of crushed coal into automated tippers at ground stock inside the mines, its transportation upto 06-07 K.M. then automated unloading without human intervention inside the mines near railway siding and then loading the same into the railway wagon by pay loaders. The rate is composite. No separate charges are collected for loading/unloading activities. A perusal of the work order dated 27-04-2005 at Page 59 shows that the parties entered into the contract for transportation of 16.5 lakhs ton coal from CHP (Coal Handling Plant) to Siding. A perusal of Clause 16 of the work order shows that for commencement of work, the Appellant has to furnish a list of trucks/tipping trucks to be deployed for carrying out the transportation activities. Similar work orders dated 26/27-02-2004 (Page 68), dated 21-10-2003 (Page 71) and dated 07-06-2004 (Page
64) are awarded by ECL, Sonpur Bazari Area.
4. The Appellant has further executed work of only loading coal into tipping Trucks at pit head for transportation inside the mines and also loading at railway siding into railway wagon for outward transportation. Separate rates are provided for loading of coal at pit head for transportation inside the mines and loading of coal into railway wagon for outward transportation. The contract is divisible. Such work orders were executed for ECL, Jhanjhra Area vide work order dated 21/22-05-2004 (Page 109), Work Order No.GM/JNR/Sales/35/563 (Page 112), Work Order No.GM/JNR/Sales/35/199 (Page 115).
5. The Appellant has further executed work order dated 31-03- 2006 (Page 124) and other similar work orders for work of loading coal into railway wagon for outward transportation at ECL, Pandveswar Area.
6. The Ld. Additional Director General, DGCEI, Kolkata, issued Show Cause Notice dated 15-10-2007, demanding Service Tax of Rs.2,71,55,189/- under the category of Cargo Handling Service for the period from 16-08-2002 to 31-03-2007 along with interest and proposing penalties under Section 76, 77 and 78. Under Para 6 of the 3 S.Tax Appeal No.132/2009 show cause notice at Page 96, out of total service tax demand of Rs.2,75,60,137/-, Service Tax demand of Rs.2,47,60,534/- is demanded on transportation of coal with incidental loading/unloading under the category of Cargo Handling Service and the balance Service Tax of Rs.27,99,603/- is demanded on loading activities i.e. loading at pit head for internal transportation and loading of railway wagon for outward transportation under the category of Cargo Handling Service.
7. The Ld. Advocate for the Appellant, Sri Kartik Kurmy, submits that the Service Tax of Rs.2,47,60,534/- is demanded on transportation contracts with incidental loading/unloading which cannot be classified under the category of Cargo Handling Service. In support of his contentions he relies on the decision of the Tribunal in the case of Tycoons Industries Pvt. Ltd. Vs. CST reported in 2019- TIOL-1509-CESTAT-KOL, Khanduja Coal Transport Co. Vs. CGST reported in 2019-TIOL-1018-CESTAT-Del., R.K. Transport Co. Vs. CCE reported in 2012 (27) S.T.R. 496 (Tri.-Del.) as affirmed by the Hon'ble Supreme Court reported in 2018 (16) G.S.T.L. J78 (SC) and CCE Vs. Singh Transporters reported in 2017 (4) G.S.T.L. 3 (SC). As regards the demand of Service Tax of Rs.27,99,603/-, he submits that the said demand is raised on activities of loading at pit head for internal transportation and also loading at railway siding into railway wagon for outward transportation and under the contract separate rates are provided. It is submitted by him that loading of coal at pit head for internal movement inside the mines cannot be classified under the category of Cargo Handling Service. The Ld. Advocate relies on the decision of the Tribunal in the case of Sainik Mining & Allied Services Ltd. Vs. CCE reported in 2008 (9) S.T.R. 531 (Tri.-Del.) and Final Order No.76815/2018 dated 11-10-2018, in the case of Sainik Mining & Allied Services Ltd., in Appeal No.ST/91/2008-DB. The Ld. Advocate further submits that the railway sidings are located within the mines and loading of coal at the railway siding inside the mines into railway wagons for outward transportation also cannot be classified under the category of Cargo Handling Service. He further submits that in the 4 S.Tax Appeal No.132/2009 show cause notice there is no allegations that the Appellant is a cargo handling agent and what is handled is nothing but cargo, hence, in absence of twin requirement of Section 65(23), the tax cannot be levied upon them under the category of Cargo Handling Service, by implication. He relies on judgment of the Supreme Court in the case of DCCE Vs. Sushil & Company reported in 2016 (42) S.T.R. 625 (SC) and in the case of Signode India Ltd. Vs. CCE reported in 2017 (50) S.T.R. 3 (SC).
8. On the ground of limitation, the Ld. Advocate submits that the demand for the period from 16-08-2002 to 31-03-2006 is barred by normal period of limitation of one year and only demand from 01-04- 2006 to 31-03-2007 is within limitation. It is further submitted that during the material period there were genuine interpretation dilemma in the trade and also within the department during the infancy stage of levy which is taken cognizance in the case of Vishal Traders Vs. CCE reported in 2010 (19) S.T.R. 509 (Tri.-Del.), Singh Brothers Vs. CCE reported in 2009 (14) S.T.R. 552 (Tri.-Del.) and in the case of Sainik Mining & Allied Services Ltd. cited supra dated 11-10-2018 and the demand is confined to normal period of limitation and penalties are waived.
9. Per contra the Ld. Authorised Representative for the Respondent supports the impugned Order. It is submitted by him that the services provided by the Appellant is clearly taxable under the category of Cargo Handling Services. He relies upon the decision of the Hon'ble Tribunal in the case of Shreem Coal Carriers (P) Ltd. Vs. CCE reported in 2015 (37) S.T.R. 1067 (Tri.-Mum.) and in the case of Karamjeet Singh & Co. Ltd. Vs. CCE reported in 2018 (17) G.S.T.L. 255 (Tri.- Del.).
10. The Ld. Advocate for the Appellant submits that the decision of the Shreem Coal Carrier (P) Ltd. is set aside by the Hon'ble Bombay High Court and remanded back as reported in 2016 (42) S.T.R. J314 upon remand by the Supreme Court reported in 2016 (41) S.T.R. J49 and reported in 2016 (41) S.T.R. J304.
5 S.Tax Appeal No.132/200911. Heard both the sides and perused the appeal records.
12. We find from the impugned Order passed by the Ld. Commissioner that the Service Tax demand of Rs.2,47,60,534/- on transportation with incidental loading/unloading is upheld mainly on the ground that the contracts are not for "mere transportation of goods", hence, it is covered under the category of Cargo Handling Services and since, there is no separate rates provided for transportation, loading and unloading activities, the Appellant is liable to pay service tax on the gross amount charged as clarified by the Board vide Circular No.B11/1/2002-TRU dated 01-08-2002.
13. In respect of the Service tax demand of Rs.27,99,603/- on loading activities, it is held by the Ld. Commissioner that loading of coal which is cargo is specifically covered under Section 65(23) as Cargo Handling Services and the decision of the Tribunal in the case of Sainik Mining & Allied Services Ltd. holding that loading of tippers done at pit head for internal transportation of Coal within the mining area is not Cargo Handling Services, does not apply.
14. We find that the Service Tax demand of Rs.2,47,60,534/- on contracts for transportation of Coal from CHP Stock Yard to Railway Siding upto 06-07 K.M. and loading the Coal into Railway Wagon are essentially for transportation of Coal which is evident from the intention of the parties as found from the Work Orders. The work orders are awarded for transportation of coal. In the case of Tycoon Industries Pvt. Ltd. Vs. CST reported in 2019-TIOL-1509-CESTAT-Kol, it is held by this Tribunal while dealing with similar facts and circumstances, that the dominant activities under the contract are movement of mineral within the mining area and loading to Railway Wagon, which includes loading and unloading, are merely incidental while the activities undertaken are principally transportation of Coal within the mining area, hence, the gross amount received for the same cannot be taxed under the category of Cargo Handling Services. Therefore, we are of the view that the Service Tax demand of Rs.2,47,60,534/- on activities of transportation with incidental loading 6 S.Tax Appeal No.132/2009 and unloading including wagon loading is principally and dominantly for transportation of coal within the mines and hence, cannot be taxed under the category of Cargo Handling Service and accordingly, set aside.
15. We find that the Service Tax demand of Rs.27,99,603/- is confirmed on two kinds of contracts i.e. contract for hiring of pay loader for loading of Coal into tippers for transportation within the mines and hiring of pay loader for loading of Coal at the Railway Siding for outward transportation. There is no separate quantification of demand in respect of each of them. We find that the activities of hiring of pay loaders for loading of coal at pit head within the mines for internal transportation cannot be classified under the category of Cargo Handling Service as held by the Tribunal in the case of Sainik Mining & Allied Services Ltd., cited supra and accordingly, Service Tax demand on the said portion of the demand out of Rs.27,99,603/- is set aside.
16. We find that the Service Tax demand on the activity of hiring of pay loader for loading of coal into railway wagon at railway siding for outward transportation is taxable under the category of Cargo Handling Service as held by the Tribunal in the case of Gajanand Agarwal Vs. CCE reported in 2009 (13) S.T.R. 138 (Tri. - Kol.). However, in the case of Vishal Traders Vs. CCE cited supra and Singh Brothers Vs. CCE cited supra and Sainik Mining & Allied Services Ltd. cited supra, the Tribunal taking note of genuine interpretation dilemma in the trade and within the department during the infancy stage of levy, has confined the demand to normal period of limitation and has set aside the penalties. Accordingly, in respect of work orders for hiring of pay loaders for loading of coal at railway siding for outward transportation, we uphold the tax demand on merit but restrict such levy to the normal time limit and set aside the penalties.
17. In the light of the above discussions, we set aside Service Tax demand of Rs.2,47,60,534/- alongwith interest and penalties on transportation contracts with incidental loading/unloading. In respect 7 S.Tax Appeal No.132/2009 of levy of Service Tax on loading of Coal at pit head for internal material, we set aside the service tax demand along with interest and penalty. However, we uphold the Service Tax demand along with interest in respect of contracts for hiring of pay loaders for loading of Coal at railway siding for outward transportation but restrict the same to the normal period of limitation. Since, there is no separate quantification/break-up of the Service Tax demand of Rs.27,99,603/-, hence, we remand the matter to the Adjudicating Authority for the limited purpose of separate quantification of demand in respect of hiring of pay loaders for loading of coal at pit head within the mines and hiring of pay loaders for loading of coal at railway siding for outward transportation. As the service tax demand on contracts for hiring of pay loaders for loading of coal at railway siding for outward transportation is upheld but restricted to normal period of limitation, the Adjudicating Authority is directed to restrict such levy to the normal time limit.
18. The Appeal is thus partly allowed in the above terms.
(Pronounced in the open court on 17.12.2019) Sd/ (P. K. Choudhary) Member (Judicial) Sd/ (Bijay Kumar) Member (Technical) mm