ST - Mere handling of coal by unloading of coal wagons and movement to site not cargo handling service Jurisdictional High Court explained: CESTAT
By TIOL News Service
NEW DELHI, MAY 31, 2013: THE appellant/ assessee entered into an agreement with Kota Thermal Power Station, Kota Rajasthan, inter alia for execution of works for smooth operation of coal handling system including clearing under coal handling operation circle for meeting coal consumption requirements of KTPS units stage (I) to (IV) by unloading of coal wagons at WT No. 1 to 5 and others specified operations in relation thereto.
Department was of the view that the activity is taxable under cargo handling service. The matter is before the Tribunal.
The appellant contends that there are several decisions by this Tribunal as well as by the High Court of Rajasthan and Jharkhand which have taken the view that mere handling of coal and movement of the said goods from railway wagon to the site of Thermal Power Station with the aid of the wagon tipping system to be fed in the boiler bunkers through motor vehicles or any other means of transportation involved in such handling, would not constitute cargo handling service within the meaning of Section 65(23) of the Act.
The Department relied on a decision of the Orissa High Court. Relying on the judgement of Orissa High Court in Coal Carriers, Revenue contends that assessee's activities clearly fall within cargo handling service and thus exigible to service tax.
The cause of action of the assessee has arisen within the jurisdiction of Rajasthan High Court and the assessee was assessed to service tax by the jurisdictional Commissioners and the appellate Commissioner within the territorial jurisdiction of the Rajasthan High Court.
The question before the Tribunal is whether in the facts and circumstances of this appeal, the decision of the Rajasthan High Court in SB Construction Company must govern interpretation of Section 65(23) or the contrary ruling of the Orissa High Court in Coal Carriers.
This Bench which is hearing the present appeal, located in New Delhi is neither within the territorial jurisdiction of the Orissa High Court nor the Rajasthan High Court. There is no direct decision delineating the interpretation of Section 65(23) of the Act by the Delhi High Court that is brought to notice.
A full Bench of this Tribunal in Madura Coats Vs. CCE clarified that where a conflict of decisions among High Courts does not relate to interpretation of statutory provisions or a notification (and not vires thereof) the decision of the jurisdictional High Court which has jurisdiction in respect of the authority which adjudicated the matter initially and of the assessee and has taken a particular view of interpretation or proposition of law, must be followed in cases falling within that jurisdiction. Madura Coats was reiterated by a Larger Bench of this Tribunal (5 Members) in Collector of Central Excise Vs. Kashmir Conductors (2002-TIOL-353-CESTAT-DEL-LB). The larger bench referred to the Madura Coats decision and reiterated the principle that pronouncements as to the interpretation of a statutory provision or notification, by the High Court having jurisdiction inter alia over the assessee would be binding.
The Tribunal observed that it is bound by the decision of the full Bench in Madura Coats and the Larger Bench in Kashmir Conductors and respectfully followed the same. Since the Rajasthan High Court in S.B.Construction has interpreted Section 65(23) of the Act, in favour of the assessee , the assessee must succeed and the appellate order impugned herein dated 30.3.2007 confirming the adjudication order dated 1.6.2007 must suffer invalidation.
(See 2013-TIOL-816-CESTAT-DEL)
