2017 (5) TMI 823 - AT - Service Tax

Tribunal rules activities as taxable services, not mining operations. Appellant liable for service tax.

The tribunal upheld the orders-in-appeal, determining that the appellant's activities constituted taxable services falling under 'Site Formation and ... Site Formation and Clearance, Excavation and Earthmoving and Demolition Services - appellant held the view that the nature of work undertaken by them was in respect of drilling, boring and core extraction services which will be a mining activity as per the definition of mining activity, all these services falls under the category of definition of “Mining Operation” which was introduced in the Budget of 2007 - Held that: - The entire work which has been undertaken by appellant is covered under work order - all the activities undertaken by appellant mentioned herein above are covered by the said services. It is also to be mentioned here that appellant themselves were aware and were informed by their client MOIL that they have to take service tax registration and appellant did obtain the service tax registration on 04.01.2006 under the very same category of ‘site formation and clearance, excavation and earthmoving and demolition services’. The activities undertaken by appellant would get squarely covered under “site formation & clearance, excavation and earth moving and demolition service”. It is nobody’s case that the appellant has not provided these services to MOIL. Demand upheld - appeal dismissed - decided against assessee. Issues:Service tax liability for the period 17.04.2010 to 31.01.2007 and 01.02.2007 to 31.03.07 under the category of 'Site Formation and Clearance, Excavation and Earthmoving and Demolition Services' under Section 65(97a) of Finance Act, 1994.Analysis:The appeals revolve around the service tax liability concerning specific services provided by the appellant. The appellant contended that their activities were related to mining and not taxable services falling under 'Site Formation and Clearance, Excavation and Earthmoving and Demolition Services.' The appellant argued that their work was integral to mining operations, citing a Board Circular and the Mines Act, 1952. However, the tribunal disagreed with the appellant's interpretation.The tribunal carefully examined the activities undertaken by the appellant, which included shaft sinking, underground mine development work, and other related services for a specific client. The tribunal noted that the appellant's services fell within the definition of taxable services under Section 65(97a) of the Finance Act, 1994. Despite being informed by their client to register for service tax and obtaining the registration, the appellant failed to discharge their service tax liability.The tribunal highlighted that the appellant's activities, such as drilling, blasting, and road preparation, clearly fell under the definition of taxable services. Additionally, a Board Circular explicitly stated that the services provided by the appellant were categorized as 'Site Formation and Clearance, Excavation, Earth Moving and Demolition Services.' The tribunal emphasized that the appellant's argument based on the Mines Act, 1952, and the definition of 'Mining Operation' was not valid in this context.Ultimately, the tribunal upheld the orders-in-appeal, stating that the appellant's activities were indeed taxable services and did not qualify as mining operations. The tribunal concluded that the appellant's arguments were unfounded, and the impugned orders were legally sound, warranting no interference. As a result, the appeals were rejected, affirming the service tax liability on the appellant for the specified period.