2025-VIL-700-CESTAT-BLR-ST
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SERVICE TAX CESTAT Cases

Service Tax – Demand of service tax on cargo handling services, Exclusion of export cargo and passenger baggage, Demand on terminal charges, demurrage charges – Appellant was appointed as a custodian under Section 45 of the Customs Act, 1962 for handling cargo at the Bangalore Airport. It provided various services like unloading, repacking and loading of export and import cargo - Department issued show-cause notices alleging non-payment of service tax on various charges like terminal charges, unloading charges, overtime charges, demurrage charges, packing charges etc. - Whether the services provided by the appellant for export cargo are liable to service tax – HELD - the services provided by the appellant for export cargo are specifically excluded from the definition of 'Cargo Handling Service' under Section 65(23) of the Finance Act, 1994. The Board's Circular also clarified that services provided in relation to export cargo are excluded from the levy of service tax. Therefore, the demands on terminal charges, unloading charges, overtime charges etc. for export cargo cannot be sustained - the impugned order is set aside and the appeal is allowed - Whether the services provided by the appellant for unaccompanied passenger baggage are liable to service tax – HELD - The Tribunal relied on the Board's Circular which clarified that unaccompanied baggage of a passenger will not be leviable to service tax. Therefore, the demands on demurrage charges, packing charges etc. for unaccompanied passenger baggage cannot be sustained - Whether the service tax demanded on the value of abandoned cargo is sustainable – HELD - As per the Board's Circular, no cargo handling service can be said to have been rendered in case of auctioned abandoned cargo, and therefore, service tax is not leviable on the value of such abandoned cargo.
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