Service Tax Exemption for Pre-2007 Mining Services Upheld

The Tribunal set aside the demand for service tax pre-01.06.2007 related to mining services, as these activities were brought under service tax from 06.08.2007 under "mining services." The Tribunal also ruled in favor of the appellant regarding the taxability of free supply of diesel by customers, stating that such supplies would not form part of the gross amount charged for services provided. Consequently, the Tribunal allowed the appeal filed by the appellant, citing legislative provisions and established legal principles.

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Issues:
1. Taxability of mining services pre-01.06.2007
2. Taxability of free supply of diesel by customers

Analysis:
1. The appeal was against an Order-in-Original dated 25.09.2013 for the period from October 2004 to December 2009. The appellant was engaged in excavation, overburden removal, and shifting activities within the factory area. The Department brought these activities under service tax from 06.08.2007 under "mining services." The dispute arose as the Department also demanded service tax pre-01.06.2007 under cargo handling service. The Tribunal noted that mining services were taxable from 01.06.2007, and post this date, the Department accepted the services as mining services. Therefore, activities pre-01.06.2007 could not be taxed under a different service category. Citing precedent, the Tribunal set aside the demand for the period pre-01.06.2007 related to mining services.

2. The next issue concerned the demand on the free supply of diesel by customers. Referring to a previous case, the Tribunal observed that free supplies by a construction services recipient for incorporation in constructions would not constitute non-monetary consideration to the service provider. The Tribunal decided in favor of the appellant, stating that the value of free supplies by customers would not form part of the gross amount charged for services provided. The Tribunal's decision was in line with legislative provisions and established legal principles, ultimately setting aside the impugned order and allowing the appeal filed by the appellant.

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