In Brief
Signode India Limited provided packing services at the manufacturing unit of Tata Refractories Limited, before goods left the factory. The Revenue sought to impose service tax on this activity as 'cargo handling service'. Signode contended these were 'packaging activities' not subject to cargo handling service tax. The Supreme Court held that prior to the Finance Act, 2005 amendment (June 16, 2005), the appellant was not liable to service tax. The Court distinguished 'cargo' (goods ready for transport) from 'goods' (at packaging stage before transport). Since packing occurred within the factory before goods left the gate, it constituted packaging, not cargo handling. The Court allowed the appeals and set aside the Tribunal's demand.
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