2026-VIL-971-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Classification of Newspaper distribution services – Appellant is engaged in transporting and distributing newspapers from a printing press to various distribution centres, while undertaking activities such as loading, unloading, binding, counting, making bundles, and packaging – Demand of service tax on the ground that the services provided constitute taxable cargo handling services under Section 65B(44) of the Finance Act, 1994 - Whether services involving transportation of newspapers along with incidental activities of loading, unloading, and packaging constitute taxable cargo handling services or fall within the exemption under Section 66D(p) of the Finance Act, 1994 - HELD - The services provided constitute transportation of goods covered under Section 66D(p) of the Finance Act, 1994, which is included in the negative list of taxable services. The primary objective of the agreement between the parties was transportation and distribution of newspapers from the printing press to designated centres, with loading and unloading activities being merely incidental and ancillary to the main transportation service - The evidence from Income-tax Returns showing depreciation on vehicles and vehicle hiring charges corroborates that the appellant was primarily engaged in providing transportation services. While the agreement mentions activities like loading and unloading, these do not transform the contract into a cargo handling service contract; rather, they remain subsidiary to the core transportation function - A composite contract involving transportation with ancillary activities must be classified based on its primary objective and substance. Since the services fall within the exempted category of transportation services under Section 66D(p), the appellant cannot be held liable for service tax - The order-in-appeal confirming the service tax demand is set aside and the appeal is allowed
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