Custom, Excise & Service Tax Tribunal
Sh. Purshottam Lal vs Cce, Jallandhar on 27 June, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
BENCH-DB
Service Tax Appeal No.ST/207-208/2009 ST[DB]
Sh. Purshottam Lal Appellant
Vs.
CCE, Jallandhar Respondent
Present for the Appellant : Sri Aalok Arora, Advocate
Present for the Respondent : Sri Amresh Jain, DR
Coram: Honble Justice G. Raghuram, President
Honble Mr.R.K. Singh, Technical Member
Date of Hearing: 27.06.2014
FINAL ORDER NO. 52768-52769 DATED: 27.06.2014
PER: R.K. Singh
This order is being issued in respect of appeals No. ST/207/2009-Cus and ST/208/2009-CU(DB) filed by Shri Purshottam Lal, Vill. Talarala, Distt, Nawanshahar (PB) (hereinafter referred to as the Appellant) against Order-in-Appeal No. 866-867/CE/APPL/JAL/2008 passed by Commissioner (Appeals), Central Excise, Jalandhar. Waiver of pre-deposit had been granted in respect of both these appeals vide Stay Order No. ST/178-179/2009 by CESTAT, Delhi.
2. The facts, briefly stated, are as under :
The Appellant is providing to the sugar Factories at Shamli and Muzaffarnagar, the services by way of loading, unloading and shifting of sugar bags from the floor of mill house to godown, from one godown to another or as desired by their client, to move or handle the goods. The said Order-in-Appeal upheld the Orders-in-Original No. 11/ST/CE/JC/2008 dated 24.3.2008 and 12/ST/CE/GC/2008 dated 24.3.2008 in terms of which the Appellants activity was held to be covered under the scope of cargo handling service. As a result, vide Order-in-Original under 11 ST/Jt. Commr./2008 dated 24.3.2008, issued in respect of Show Cause Notice No. V(ST)/Adj/34/2007/3960 dated 10.8.207 covering the period from 16.8.2002 to 15.11.2006 in respect of service rendered to sugar factory at Shamli the adjudicating authority held as under :-
(1) I confirm demand of service tax amounting to Rs. 13,67,536/- and order the same to be paid with interest under Section 73 & 75 respectively of the Service Tax Act.
(2) I impose penalty of Rs. 500/- on the party under section 75A of the Service Tax Act.
(3) I impose penalty of Rs. 200/- per day till the date of deposit of Service Tax under section 76 of the Service Tax Act, subject to that the amount of the penalty payable shall not exceed the total amount of service tax due.
(4) I impose penalty of Rs. 1000/- under section 77 of the Service Tax Act.
(5) I impose penalty of Rs. 13,67,536/- under section 78 of the Service Tax Act. Similarly vide Order-in-Original No. 12/ST/Jt. Commr./2008 dated 24.3.2008 issued in respect of Show Cause No. V(ST) JC/Adjn/33/07 dated 10.8.2008 covering the period 16.8.2002 to 31.3.2006, in respect of services rendered to sugar factory at Muzaffarnagar, the adjudicating authority held as under :-
(1) I confirm demand of service tax amounting to Rs. 18,54,752/- and order the same to be paid with interest under Section 73 & 75 respectively of the Service Tax Act.
(2) I impose penalty of Rs. 500/- on the party under section 75A of the Service Tax Act.
(3) I impose penalty of Rs. 200/- per day till the date of deposit of Service Tax, under Section 76 of the service Act, subject to that the amount of the such penalty payable shall not exceed the total amount of service tax due.
(4) I impose penalty of Rs. 1000/- under Section 77 of the Service Tax Act.
(5) I impose penalty of Rs. 18,54,752/- under section 78 of the Service Tax Act.
3. As the issue involved in both cases is identical, both are taken up simultaneously. In his appeals the Appellant has contended that :-
(i) They are only supplying labour and not providing cargo handling services.
(ii) The process of packing, loading were mechanised and the Appellant did not own the equipment and merely supplemented the process by supplying labour.
(iii) They were under the genuine belief that their activity was not taxable and there was no wilful mis-statement or suppression of facts and therefore demand is time-barred.
(iv) Their labour were only doing the loading, unloading shifting of bags within the factory.
(v) CESTAT in their own case for same activity has decided the issue in their favour vide Order No. 51834/2014 dated 17.4.2013. Similarly the CESTAT judgement in the case of CCE, Meerut-I Vs. Surinder Kumar 2010 (20) STR 678 (Tri.-Del.) is also in their favour.
(vi) In case of CCE, Ranchi Vs. Modi Construction Company 2011 (23) STR 6 (Jhar.), the Honble Jharkhand High Court has held that the definition of cargo handling can not in any way be considered to cover handling of goods within factory premises.
(vii) The Appellant also referred in the case of Gaytri Construction Co. Vs. CCE, Jaipur 2012 (25) STR 259 (Tri.-Del.).
4. The ld. A.R. fairly conceded that the activities of the Appellants within the factory would not amount to cargo handling as has been held in several judicial pronouncements referred to earlier. He added that on careful scrutiny of the contract, a small part of their activity mentioned at Sr. No. 4 of the rates for sugar handling and allied jobs of sugar godown namely loading of sugar in trucks for despatch by rail could be covered under cargo handling but he conceded that they do not have separate figures for various activities (19 in total listed in the said rate list).
5. We have considered the submissions of both sides.
6. The main, rather, the only issue involved in this case is whether the service rendered by the Appellant fell under the cargo handling service which is defined as per Section 65(23) of Finance Act, 1994 as under :-
loading, unloading, packing or unpacking of cargo and includes cargo handling provided for freight in special containers or for non-containerized freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport and cargo handling service incidental to freight, but does not include handling of export cargo or passenger baggage or mere transportation of goods.
7. The Appellants argument that they were only providing manpower is not sustainable because the activities/services of, to quote from the Show Cause Notices, lifting, stacking and loading of sugar bags were done by the persons who were on the pay roll of the Appellant and the service receivers made the payment to the Appellant. Therefore, it is evident that the said services of lifting, stacking and loading of sugar bags were provided by the Appellant.
8.` In the case of CCE, Meerut-I Vs. M/s Surender Kumar Final Order No. 56355/2013, CESTAT, Delhi has held as under :-
On going through Show Cause Notice as well as order in original it is the case of Revenue that respondent is engaged in loading, unloading and shifting of sugar bags from floor of mill house to godown, from one godown to another. This activity does not fit in the definition of cargo handling service. Revenues contention that respondent is engaged in loading of bags in truck is without any basis. Accordingly we do not find any merit in appeal and reject the appeal.
In the case of CCE, Ranchi Vs. Modi Construction Co. the Honble Jharkhand High Court has held as under:
We have given our considered opinion to the submission of the learned counsel. As per sub-section 23 of Section 65 of the Act, cargo handling service means loading, unloading, packing or unpacking of cargo. This definition does not in any way can be considered to cover handling of goods within the factory premises because cargo, according to the dictionary meaning of the ex-pression, means loaded or unloaded on truck, aircraft and ship.
Indeed, in the case of Appellant himself, CESTAT vide Order No. 59/A/65/12 dated 12.1.2012 has held as under :-
Page 4 of the Appellate order indicated that the consideration received by the respondent was in respect of loading and unloading of sugar from one place to another within the factory and allied activities relating to the said principle activity. Once such a facts comes out from the Appellants order, the respondent is covered by the decision of CCE, Ranchi vs. Modi Construction Company reported in 2011 (23) STR 6 (Jhar.). In the result, Revenue appeal is dismissed.
Also is yet another Order No. 51834/2014 dated 17.4.2013 CESTAT in the Appellants own case stated as under :
Being aggrieved with the order passed by the Commissioner (Appeals) Revenue has filed the present appeal. The short issue required to decide as to whether the respondent who was engaged in shifting of sugar bags from one place to another within the factory premises of sugar mill is required to be considered as cargo handling service provider or not.
We find that the earlier appeal of the Revenue against same assessee for a different period stands rejected by the Tribunal vide its final order No. ST/A/65/2012-CU-DB dated 18.01.2012. We also take note of the latest order of the Division Bench in the case of CC & C.Ex., Meerut-I Vs. Omprakash in Appeal No. ST/276/2009 wherein identical issue was considered and vide its final order No. 51285/2014 dated 28.03.2014, Revenues appeal rejected. By following the above decision we find no merit in the present appeal and the same is accordingly, rejected. In the case of M/s. Coal Carriers vs. Commissioner of Central Excise, Custom & S.T. Bhubaneswar 2011 (24) STR 395 (Ori.) the Honble Orissa High Court has also approvingly referred to cargo being the goods which are meant for transportation from one place to another by any mode of transport, adding that pre-transportation activities like packing/loading .................are covered under cargo handing service.
The learned AR has not contended that any of these orders have been set aside.
9. The Appellant has all along claimed that their activities were confined to the factory premises. The Revenue has not given any evidence that the tasks of, to quote from the Show Cause Notice, lifting, stacking and loading of sugar bags were not within the confines of the factory premises. The rate list referred to by the learned AR contains 19 items of work, all of which, with the possible exception of Sr. No. 4 (loading of sugar in trucks for despatch by rail (for rake loading only), fall outside the scope of cargo handling as has been fairly conceded by the ld. AR. Even with regard to item No. 4 there is no evidence produced as to whether this item of work was actually performed and therefore threadbare discussion on the point whether this item of work can get stretched into the scope of cargo handling service is pointless. It is also because in the Show Cause Notice, the bouquet of services (lifting, stacking and loading of sugar bags) has been sought to be classified as cargo handling service and therefore such activity-wise vivisection is not a point at issue in this case; more so in the absence of any evidence of all such activities having been performed and the individual quantification thereof. In this context, it is pertinent to refer to the case of CCE Vs. Gayatri Construction Co. 2012 (25) STR 259 (Tri.-Del.) where there was a possibility of a small part of service involving manual loading of cargo into railway wagon being covered under the cargo handling servcie and the CESTAT, Delhi made the following observations :
Therefore, essentially the present demand is for services use for transporting goods within the factory and also for manpower supplied for manual assistance at various points of loading system using conveyer system though there may be a small part of the service which may be in the nature of manual loading of cargo into railway wagons or trucks which may come within the meaning of Cargo Handling Service. In the facts of the case the service, rendered by Appellants can not be considered as Cargo Handling service in view of the decisions in the case of S.B. Construction Co. 2006 (4) STR 545 (Raj.) and Modi Construction Company 2008 (12) STR 34.
10. Thus, in view of the foregoing discussion, the Appellants appeals are sustainable on merit. In addition, the Appellant has contended that they were under the genuine belief that their activity was not taxable and they had not suppressed or wilfully misstated anything to evade service tax. There is nothing in the Show Cause Notice to even suggest that there was a positive act on their part to suppress or wilfully misstate any facts to evade service tax. Indeed, as is evident from the various judicial pronouncements, there had been confusion regarding what is cargo handling or even as to what is cargo. In the wake of the appellants belief that their activity was not cargo handling, their not taking service tax registration or not filing return is understandable. In these circumstances, it is difficult to sustain the allegation of suppression or wilful mis-statement of facts with intent to evade service tax.
11. In the light of the foregoing, the Appellants appeals are allowed and the impugned Orders-in-Appeal set aside.
[Dictated & Pronounced in the open Court].
(Justice G. Raghuram) President (R.K. SINGH) TECHNICAL MEMBER Neha 1