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of <h1>Tribunal rules in favor of appellant, activities not taxable under Finance Act. Appeal deemed meritorious.</h1> <h3>SANJAY SINGH ASSOCIATES Versus COMMISSIONER OF CUS., C. EX. & S.T., BHOPAL</h3> SANJAY SINGH ASSOCIATES Versus COMMISSIONER OF CUS., C. EX. & S.T., BHOPAL - 2015 (37) S.T.R. 546 (Tri. - Del.) Issues:1. Whether the appellant's activities with M/s. Diamond Cement constitute taxable services under the Finance Act, 1994.2. Whether the demand for Service Tax, interest, and penalties raised against the appellant is sustainable.3. Whether the appellant's appeal against the Commissioner's order has merit.Issue 1: Taxability of Appellant's ActivitiesThe appellant entered into three contracts with M/s. Diamond Cement, involving transportation of limestone and supply of mining machinery. The Department alleged that these services fell under 'site formation and clearances, excavation, earth moving, and demolition services' and 'mining service' for Service Tax purposes. The appellant argued that the transportation service was a Goods Transport Agency (GTA) service, making the service recipient liable for Service Tax. The Tribunal agreed, holding that the transportation service did not fall under site formation or clearance services. Similarly, the supply of mining machinery was considered a supply of tangible goods service, not taxable during the dispute period.Issue 2: Sustainability of Service Tax DemandA show cause notice was issued to the appellant for Service Tax demand, interest, and penalties. The Commissioner upheld the demand, but the appellant contended that the transportation service was a GTA service, and the supply of machinery was not taxable during the dispute period. The Tribunal found that the appellant had a strong prima facie case in their favor, waiving the pre-deposit requirement and staying the recovery of Service Tax, interest, and penalties.Issue 3: Merit of the Appellant's AppealThe appellant appealed against the Commissioner's order, arguing that the demand for Service Tax on transportation charges was unsustainable and that the supply of machinery was not taxable during the dispute period. The Tribunal agreed with the appellant, holding that the appellant had a strong case, and granted a stay on the recovery of Service Tax, interest, and penalties pending the appeal.In conclusion, the Tribunal ruled in favor of the appellant, finding that their activities did not constitute taxable services under the Finance Act, 1994. The demand for Service Tax, interest, and penalties was deemed unsustainable, and the appellant's appeal was considered to have merit, leading to a waiver of the pre-deposit requirement and a stay on recovery pending the appeal.
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