In Brief
Signode India Limited rendered packaging services within a manufacturing unit prior to goods leaving the factory, and was assessed for service tax as a cargo handling agency. The Supreme Court held that packaging activity (goods being prepared for transport) is legally distinct from cargo handling service (goods already ready for transport). Since the appellant's activities occurred before goods cleared the factory gate and the appellant was not a cargo handling agency, it did not qualify as rendering cargo handling services. Therefore, prior to the Finance Act 2005 amendment, it was not liable to service tax. The appeals were allowed and the Tribunal's order was set aside.
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