IMPORTANT POINT
Goods become cargo after packaging.

JUDGMENT :

Ranjan Gogoi, J.

1. Heard learned counsels for the parties and perused the relevant material.

2. The liability of the appellant to service tax on the basis that the service rendered by the appellant amounts to “cargo handling service” within the meaning of Section 2(23) of the Finance Act, 1994 [as amended by Finance (No.2) Act, 2004] is the core issue that arises for determination in these cases.

3. The appellant seeks to disclaim such liability by contending that the service rendered by it amounts to a “packaging activity” which has made exigible to service tax by amendment to the Finance Act, 1994 and by insertion of Section 65 (76b) and Section 105(zzzf) with effect from 16.06.2005. The appellant has been paying service tax on the aforesaid basis i.e. service rendered by it amounts to a packaging activity and no dispute on this score has been raised by the Revenue.

4. The appellants though granted the facility of centralized registration with effect from 10.10.2004 have been found to be liable to pay service tax on its activity by the Kolkata Bench of the Customs, Excise, Service Tax Appellate Tribunal (for short, 'the Tribunal') for the period prior to 2005, whereas in respect of the very same activity it has been found to be not so liable by the Bangalore Bench of the learned Tribunal, which order has since been affirmed by the High Court of Andhra Pradesh being the jurisdictional High Court in respect of the lis decided by the Bangalore Bench of the learned Tribunal.

5. To appreciate the issues arising in the present case, Section 65(23) which defines “cargo handling service”; Section 65(105)(zr) which deals with the “taxable service rendered by a cargo handling agency”; Section 65 (76b) which defines “packaging activity” and Section 65(105)(zzzf) which makes “service rendered in connection with packaging activity” exigible to the service needs to be extracted below :-

“Section 65-In this Chapter, unless the context otherwise requires:-

(23) “cargo handling service” means loading, unloading, packing or unpacking of cargo and includes cargo handling services provided for freight in special containers or for non-containerised freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport and cargo handling service incidental to freight, but does not include handling of export cargo or passenger baggage or mere transportation of goods;

(76b) “packaging activity” means packaging of goods including pouch filling, bottling, labelling or imprinting of the package, but does not include any packaging activity that amounts to “manufacture” within the meaning of clause (f) of Section 2 of the Central Excise Act, 1944.

Section 105 – “taxable service” means any service provided or to be provided:-

(zr) to any person, by a cargo handling agency in relation to cargo handling services;

(zzzf) to any person, by any other person, in relation to packaging activity.”

6. Sections 65(76b) and 65(105)(zzzf) were both inserted by the Finance Act, 2005 with effect from 16.06.2005. The above amendment, to our mind, is sufficiently indicative of legislative intent that packaging activity is different from cargo handling activity. A view, which would make the appellant liable to tax for the pre-amended period (prior to 16.06.2005) on the basis that the activity undertaken by it involves rendering of cargo handling service would run counter to the expressed legislative intention in a situation where its liability, for the post amendment period, on the basis that the appellant is engaged in “packaging activity” has not been disputed by the Revenue.

7. At this stage notice must also be had of the fact that there is no dispute on the fact that the liability sought to be fastened on the appellant is on account of the activity undertaken by the appellant in the manufacturing unit of the principal manufacturer, namely, Tata Refractories Limited. It is also not in dispute that such activity is prior to th