2007 (7) TMI 138 - AT - Service Tax

Tribunal grants additional grounds of appeal on mining liability but dismisses service tax appeal due to jurisdictional issue.

ORES INDIA PVT. LTD. Versus COMMR. OF C. EX., CUS. & ST, BHUBANESWAR-II

The appellant's application seeking additional grounds of appeal related to liability from mining activities was allowed by the Tribunal as the raised ... Another order passed with in six months holding that Adjudicating Authority had not jurisdiction to decide the matter – Earlier order passed by same authority becomes fatal itself – Additional grounds can be raised if it affect the right of the parties and goes to the root of the matter Issues:1. Additional grounds of appeal related to liability arising from mining activities.2. Stay application challenging service tax demand and penalties.3. Imposition of service tax on mining activities and jurisdictional issues.Analysis:1. The appellant filed an application seeking to allow additional grounds of appeal related to the liability arising from mining activities. The appellant argued that any liability related to mining activities should only arise from 1-6-2007 onwards as per Notification No. 23/2007-ST. The legal ground raised by the appellant was considered to go to the root of the matter and affect the rights of the parties. The Judicial Member allowed the miscellaneous application, noting that the ground raised by the appellant was significant and should not be denied.2. In the stay petition, the appellant challenged an order raising a service tax demand and penalties. The appellant contended that the demand was raised based on a misinterpretation of the law, and the authority lacked jurisdiction to pass the impugned order. The appellant highlighted that a previous order by the same authority had dropped proceedings for a different period due to jurisdictional issues. The appellant argued that any tax liability related to mining activities should only arise from 1-6-2007 onwards. After hearing both sides, the Tribunal decided that the appeal could be disposed of without requiring a pre-deposit, rendering the stay petition infructuous.3. In the service tax appeal, apart from jurisdictional issues, the appellant argued that the law imposing service tax on mining activities from 1-6-2007 onwards exonerated them from liability before that date. The appellant emphasized that the activities were carried out in a specific state, and the Excise Authority of another state lacked jurisdiction. The appellant also contended that the nature of the activities constituted a composite contract, and taxing them separately would be contrary to established legal principles. The Tribunal noted that the same adjudicating authority had previously held that it lacked jurisdiction to decide the matter, making the impugned order fatal. Consequently, the Tribunal declined to address the other submissions made by the appellant, considering the jurisdictional issue to be decisive.