2025-VIL-2056-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax – Section 65(105)(zzzy) of Finance Act, 1994 – Rendering of services – Classification – Present appeal has been filed against Order-in-Original passed by Commissioner, wherein Commissioner had confirmed demand of service tax against Appellant along with interest and penalty – Whether demand of service tax confirmed under category of Clearing and Forwarding Agent Services is sustainable – HELD – Services provided by Appellant mostly involved unloading the material from railway sidings and then transporting same by road/railway to port for their eventual export on behalf of their clients. Services rendered by Appellant would appropriately classifiable as Cargo Handling Services rather than Clearing and Forwarding Services. Since said services were rendered by Appellant in connection with export cargo, Appellant is eligible for exemption from service tax. Demand of service tax confirmed in impugned order under category of Clearing and forwarding services is set aside – Appeal allowed - Transportation services – Tax liability – Whether Appellant is liable to pay service tax on transportation services under reverse charge mechanism – HELD – Appellant had awarded a contract to Shiv Construction for transportation of clinker from Railway siding to cement factory. Appellant made payment to transporters which included payment of service tax. Inspite of explanation offered by Appellant that service tax had been paid on transportation services, Adjudicating Authority had confirmed demand on premise that liability to pay service tax on freight charges is upon Appellant under reverse charge mechanism. Amount of service tax payable on transportation service was charged on invoices and paid by Appellant to transporter. No further service tax was required to be paid by Appellant, as demanding service tax on same service and value from Appellant as a recipient of service under reverse charge would tantamount to double taxation, which is not tenable in eyes of law - Demand of tax – Sustainability – Whether demand of service tax confirmed under category of Mining Service is sustainable – HELD – Demand had been confirmed on services of transportation of excavated iron ore/overburden from one place to another place inside iron ore mines under taxable category of Mining Service. Appellant had rendered service of transportation only. In respect of transportation service, liability to pay service tax, if any, is on service recipient under reverse charge mechanism. Appellant had not undertaken any mining activity as defined in Section 65(105)(zzzy) of the Act. Demand of service tax confirmed under category of Mining Service is not sustainable and hence, it is set aside.
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