Substantive expansion of service tax entry means maritime oil-prospecting services were not taxable under the earlier notification.

Notification No. 14/2010-ST was held to make a substantive and prospective change, not a mere clarification, because it expanded the taxable service entry by introducing a wider table-based scheme for services connected with mineral oil and natural gas installations, structures and vessels in the continental shelf and exclusive economic zone. Applying strict construction of taxing statutes and rejecting any supply of casus omissus, the Court noted that the 2009 notification covered only the then-specified extension of service tax and did not reach the appellant's activity. Services consumed for prospecting mineral oil on the seabed were therefore outside the 2009 notification, and the demand could not be sustained.

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Issues: Whether Notification No. 14/2010-ST dated 27.2.2010 was clarificatory or declaratory, or whether it effected a substantive enlargement of the service tax net, and whether the services rendered by the appellant to rigs used for prospecting mineral oil in the continental shelf and exclusive economic zone were taxable under Notification No. 21/2009-ST dated 7.7.2009.

Analysis: The statutory scheme under the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976 permits extension of enactments to notified maritime only by notification. The 2002 notification first extended Chapter V of the Finance Act, 1994 to designated areas, and the 2009 amendment expanded that extension to installations, structures and vessels in the continental shelf and exclusive economic zone. The 2010 notification, however, superseded the earlier notification and introduced a wider table-based scheme covering services relating to construction of installations, structures and vessels for prospecting, extraction or production of mineral oil and natural gas, and also services provided by or to such installations, structures and vessels. Applying the settled rule that taxing statutes must be strictly construed and that casus omissus cannot be supplied, the Court held that the 2010 notification was not a mere clarification but brought a substantive change in law. The appellant's activity was held to fall outside the 2009 notification, since it concerned services consumed by the seabed for prospecting mineral oil and not services to installations, structures or vessels as then covered.

Conclusion: The 2010 notification was substantive and prospective, the impugned activity was not taxable under the 2009 notification, and the demand against the assessee could not be sustained.

Ratio Decidendi: A notification that widens a taxing entry by expanding the class of taxable services creates a substantive change and cannot be treated as clarificatory or retrospective in the absence of clear legislative language.

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