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Judgment
Appeals Nos. ST /456-457 /2009 have been filed by the appellant - assessees against order-in-Appeal 155 & 156/BPL/2009 dated 5.3.2009 which
upheld the respective orders-in-original dated 13.10.2008 and 10.9.2008 only to the extent of sustaining the demand along with interest for the normal
period of one year under cargo handling service for the service rendered by these appellants to M/s Maganese Ore India Ltd. (MOIL) but the said
orders-in-original the demand under cargo handling service was confirmed for the extended period of five years along with interest and also penalties
were imposed under Section 76, 77 and 78.
The Revenue filed appeals Nos. ST /305-306/2009 against the said order-in-appeal on the ground that the Commissioner (Appeals) has incorrectly
set aside the demand for the period beyond the normal period and penalties were also unjustifiably dropped as the appellants were guilty of
suppression of facts.
No one appeared on behalf of the appellant-assessees when the case was called. The appellant-assessees sent a Fax received at 11.06 A.M. on
the date of the hearing seeking adjournment on the ground that their Advocate was pre-occupied. 'As the request was received rather too late and
that too to convey the Advocate's pre-occupation in such perfunctory manner it is not considered good and sufficient ground to grant adjournment and
so we proceed to decide the appeals on merit.
The appellant - assessees have contended in their appeals that the activity undertaken by them did not falling under the category of cargo handling
service as defined under Section 65(23) of the Finance Act, 1994 and their activity was covered under mining service as it related to mining and was
carried out within the mining area and that mining service was not liable to service tax during the relevant period. They also contended that there was
no suppression of facts and the details were given when asked for. They informed Revenue in writing that the service recipient (MOIL) had taken up
the matter with the CBEC regarding the taxability of the activity and requested that the matter may be kept pending.
Revenue on the other hand has contending that there was no ambiguity about the activity being squarely covered under cargo handling service as
the definition given in Section 65(23) ibid left no scope for any confusion in this regard and that the summons issued to the appellants were not
answered inasmuch as they (i.e. the appellants) did not mark their presence in response to the summons and only sent their written submission and
supplied the sought information almost three weeks after the date on which they were required to appear before the service tax officers along with the
required details. So, the appellants are guilty of suppression of facts. Revenue also contended that suppression is sufficient to invoke the extended
period as it is not required to be proved that suppression was with intent to evade payment of duty because the expression ""with intent to evade
payment of duty"" does not appear in sub-clause (d) of proviso to Section 73(1) of the Finance Act, 1994
We have considered the contentions of both sides and we have also perused the contract under which the service was rendered. As is evident from
Para-II of the tender document for railing and transport of Maganese Ore the service involved wagon loading, truck loading, transport including
stacking and de-stacking/rehandling of manganese ore. It is also seen that transport activity (excluding stacking) formed a very small part of the entire
service rendered, inasmuch as while hiring of truck including stacking was @ of Rs.1,15000 / PMT, transport excluding stacking was only Rs.10,000 /
PMT, wagon loading was@ Rs.1,25,000/- PMT and truck loading@ 25,000/- / PMT and stacking/re-handling was also@ 10,000 / PMT. As the goods
were loaded on to the trucks and wagons they acquired the status of cargo. Therefore the activity performed by the appellant clearly fell under the
category of cargo handling service as defined in Section 65(23) ibid. This conclusion is in harmony with the ratio of the judgement in the case of Coal
Carriers Vs. CCE - 2011 (24) STR 395 (Ori.). The judgement of CESTAT in the case of CCE Vs. Vinshree Coal Carriers Pvt. Ltd. - 2008 (10) STR
4 73 (Tri.-Kolkata) holding transport of coals within the mining area not subjected to service tax under cargo handling service was passed following
the judgement of the CESTAT judgment in the case of Sainik Mining & Allied Services Ltd. Vs. CCE - 2007 (9) STR 531 (Tri.-Kolkata) where the
coal was transported inside the mine/colliery by deployment of machines and tipper trucks for transport of coal from quarry beds to surface
stocks/railway siding. Thus the facts in these two cases were quite different.
Coming to the Revenue's appeal that extended period was rightly invoked by the primary adjudicating authority and therefore demand for extended
period should be upheld and penalties restored, We find that the primary adjudicating, authority has taken note of the fact that the service recipient M/s
Maganese Ore India Ltd. had made a representative to CBEC regarding (non) taxability of the impugned service. The service was rendered to a
public sector unit which had taken up the matter with CBEC contending that it was not taxable. It is thus evident that it is not a case where the
appellant - assessees could/would have intended to suppress the fact of rendition of the impugned service. The appellants also supplied the information
within about 3 weeks of the date on which they were summoned to appear before the Central Excise officer. The Commissioner (Appeals) has taken
due note of some of the judgements like in the case of Singh Brothers - 2009-TIOL-189- CESTAT-Del. where extended period was not invoked and
penalties set aside holding at that time that the issue was interpretational. In the given circumstances, we hold that the Commissioner (Appeals) finding
that the appellants are not guilty of supression and do not deserve to be penalised the does not warrant any appellate intervention.
In the light of the foregoing discussion, we dismiss the appeals filed by the appellant assessees as well as those filed by Revenue.