Cpmmissioner Of Central GST And Central Excise vs. M/S Singh Construction And Company

Held

The Court held that the CESTAT was correct in concluding that the activity of transporting coal in tipping trucks and loading it by pay loaders does not fall under the definition of 'Cargo Handling Services' as defined under Section 65(23) of the Finance Act, 1994. The Tribunal relied on the Supreme Court decision in Singh Transporters vs. Commissioner of Central Excise, Raipur, 2012 (27) STR 488, finding that cargo handling services pertain to loading and unloading after a commodity becomes cargo and is at a freight terminal. The Court also agreed with the Tribunal's reasoning regarding the charging section, referencing the Larger Bench decision in M/s Atma Steels Pvt. Ltd. and others vs. CCE, Chandigarh, which stated that existing provisions at the time of notice issuance are applicable. Furthermore, a coordinate bench of the High Court had previously held in a similar case (M/s Singh Construction & Company vs. Union of India and others) that the activity of shifting coal does not fall under cargo handling services. Therefore, the appeal was dismissed.

Facts

The Commissioner of Central GST and Central Excise (appellant) filed an appeal against an order by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The CESTAT had dropped a service tax demand of Rs. 3,32,59,302/- against M/s Singh Construction and Company (respondent-noticee) for the period between 01.10.2013 and 31.03.2015. The department alleged that the respondent was providing cargo handling services to Northern Coalfields Ltd. by transporting coal in tipping trucks and loading it using pay loaders. The show cause notice was issued on 21.10.2015, and the Commissioner confirmed the demand. The CESTAT, in its final order dated 03.04.2023, dropped the demand, which is now under challenge before the High Court.

Key Issues

1. Whether the activity of transporting coal in contractors' tipping trucks, including loading of coal services, was covered under ‘cargo handling services' under Section 65(23) of the Finance Act, 1994 during the material period? 2. Whether the non-mentioning or mere wrong mentioning of provisions of law in the show cause notice vitiates the entire proceedings if the allegations are clearly brought out? 3. Whether Section 66BA of the Finance Act, 1994, inserted w.e.f. 10.05.2013, legitimized the demand invoking the earlier charging section, making the non-mentioning of the amended section inconsequential? Petitioner's arguments: The CESTAT failed to consider Section 66BA, which legitimized the demand. The Tribunal ought to have considered that mere wrong mentioning of a provision, like Section 65(23) which was deleted, does not vitiate the proceedings. The activity of transporting and loading coal should be considered cargo handling services. Revenue's arguments: The respondent-noticee was engaged in providing cargo handling services. The activity of transporting coal in tipping trucks and loading it by pay loaders falls under the definition of 'Cargo Handling Services'.