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Orient Paper Mills v/s CCE, Bhopal

    Service Tax Appeal No. 51385 of 2014 in-Appeal No. BPL-EXCUS-000-APP-118-13-14 & Final Order No. 51797 of 2018

    Decided On, 11 May 2018

    At, Customs Excise Service Tax Appellate Tribunal Principal Bench New Delhi


    For the Appellant: Priyanka Goel, Advocate. For the Respondent: Ranjan Khanna, A.K. Singh, DRs.

Judgment Text

Ajay Sharma, Judicial Member.

1. The instant appeal has been filed against the Order in Appeal dated 24.10.2013 passed by the Commissioner (Appeals), Central Excise, Bhopal. The issue involved in this appeal is imposition of Service Tax on the amount received by the appellant from the parties for the period January 2007 to January 2008 for providing railway siding facility and also for providing Cargo Handling Services by way of lifting and transporting the Coal Ash/ Bed ash from its effluent treatment plan within its factory premises. According to the respondent the appellant failed to deposit Service Tax with intention to evade payment of Service Tax. Therefore, a show cause notice dated 16.11.2010 was issued for recovery of Service Tax amounting to Rs. 51,377.50/- and for imposition of penalty under Section 76, 77 and 78. The Deputy Commissioner Central Excise and Service Tax, Jabalpur vide Order in Original dated 14.06.2012 confirmed the demand. The same was upheld by the Commissioner (Appeals) by way of impugned order. We have heard ld. Counsel for the Appellant and the ld. DR for the respondent and perused the papers

2. According to the Department the activity of lifting of transporting the coal ash/ bed ash come under 'Cargo Handling Services' as per Section 65(23) of the Finance Act, 1994, whereas the appeallant submitted that they had made contract between the parties for the purpose of lifting and transporting the coal ash/ bed ash from its affluent treatment plant in which its clearly mentioned that all the arrangements related to the transportation, renting and labour are provided by the contractors only. The appellant had only charged nominal amount from the contactor, as per the contract under the head ' Coal Ash/ Bed Ash on account of providing railway siding facility as per trip basis'.

3. As per the definition of 'cargo handling services', under Section 65(23) of the Act 'cargo handling service' means loading, unloading, packing or unpacking of cargo and includes cargo handling services provided for freight in special containers or for no containerized freight, services provided by a containers freight terminal, for all mode of transport and cargo handling service incident to freight, but does not include handling of export cargo or passenger baggage or mere transportation of goods'.

4. In view of the above definition, the appellant made a contract, in which they have charged the amount on the basis of per trip on account of coal ash/bed ash. The entire arrangement related to transportation or renting of coal ash/bed ash, is made by the contractor as per the agreement. Hence, as per the definition, the appellant has neither 3 Service Tax Appeal No.51385/2014 provided any transportation nor any labourers for execution of the said work. Therefore, it cannot be said that the appellant is providing any cargo handling services in respect of the transportation of coal ash/bed ash and therefore, this appeal is to be allowed inso far as this point is concerned.

5. Sofar as renting of immovable property is concerned, as per Section 65(90a) of the Act, ' renting of immovable property' includes renting, letting, leasing, licensing or other similar arrangements of immovable property for use in the course or furtherance of business or commerce but does not include-

'(i) Renting of immovable property by a religious body or to a religious body; or

(ii) Renting of immovable property to an educational body, imparting skill or knowledge or lessons on any subject or field, other than a commercial training or coaching centre;

Explanation:1: For the purpose of this clause, 'for use in the course or furtherance of business or commerce' includes use of immovable property as factories, office buildings, warehouses, theatres, exhibition halls and multiple-use buildings;

Explanation:2: For the removal of doubts, it is hereby declared that for the purposes of this clause 'renting of immovable property' includes allowing or permitting the use of space in an immovable property, irrespective of the transfer of possession or control of the said immovable property;

Explanation 2 was inserted w.e.f. 16.05.2008 by Section 90 of the Finance Act, 2008. Hence, renting of space prior to 16.05.2008 without transfer of possession or control is outside the purview of service tax. Although in the instant appeal, the period of dispute is prior to 16.05.2008 but the appellant has failed to submit any documentary evidence in 4 Service Tax Appeal No.51385/2014 support of their claim that they have rented out the railway siding to other parties,

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without transfer of possession or control. The appellant failed to produce any evidence during the period under dispute that they have themselves maintained and controlled the railway sidings. 6. Therefore, the appellant is liable to pay the service tax under the category of 'renting of immovable property service' alongwith interest and penalty. Any amount already paid by the appellant under this head is to be adjusted. 7. In view of the above, the appeal of the appellant is partly allowed.