Hon'ble Judges/Coram:
C.L. Mahar, Member (T) and Rachna Gupta

ORDER

C.L. Mahar, Member (T)

1. The appellants are engaged in providing taxable services under the category of "Goods Transport Agency Services" to M/s. Western Coal Field Ltd. during the period January 2009 to March 2011. Show Cause Notice dated 05.02.2010, for the period January 2009 to March, 2009, Show Cause Notice dated 27.09.2010 for the period April 2009 to March 2010 and Show Cause Notice dated 04.10.2011 for the period April, 2010 to March 2011 were issued on the ground that the appellants were doing loading, transport and unloading of coal from mining under the category of "Cargo Handling Services".

2. The basic issue before us for adjudication is that whether the department is correct in holding that the service provided by the above mentioned appellants falls under the category of cargo handling services as defined under section 65(105)(zr) read with section 105(23) of the Finance Act, 1994 or whether the service tax is correctly been paid by recipient of the service under Goods Transportation Agency service on reverse charge basis. In this regard, it will be appropriate to have a look at the sample contract with regard to above mentioned appellant

Contract No. WCL/Pench/CME(OPR)/116/09-10/699 dated 14.5.2010

Clause No. 28.

Escalation if applicable will be payable as per the tender document as the contract period is for 12 (Twelve) months as per clause No. 37.00 of Special Terms and Conditions of Tender document for price variation clause.

Contract No. WCL/Pench/CME (OPR)/89/2009-10 dated 23.3.2010

Clause No. 31.

The rates are based on ruling price of diesel as on 1.03.2010 i.e. Rs. 39.87 per litre. Escalation if applicable will be paid as per clause No. 37 of Special Terms and Conditions of Tender document for price variation clause.

3. It can be seen from the above mentioned terms of the contract that rates which have been provided to the appellant is based on the distance for which transportation of the coal is to be undertaken by the service provider i.e. the appellant in these cases. The relevant prices as mentioned above is also subject to escalation of the transportation rates as per changes in the fuel price for the relevant period. This basically signifies that the rates are predominantly for transportation of cargo rather than for handing of cargo. However, before proceeding further the relevant section 65A of Finance Act, 1994 need to be looked into in detail for classification of the service rendered by the appellant. The provisions of section 65A provides as follows:-

SECTION 65A. Classification of taxable services - (1) For the purposes of this Chapter, classification of taxable services shall be determined according to the terms of the sub-clause (105) of Section 65;

(2) When for any reason, a taxable service, is prima facie, classifiable under two or more sub-clauses of clause (105) of section 65, classification shall be effected as follows:

(a) the sub-clause which provides the most specific description shall be prefe........