Appeal allowed: Mining services not taxable pre-01.06.2007. Penalties waived. Extended period inapplicable.

The Tribunal allowed the appeal, holding that mining services were not taxable before 01.06.2007, and the demand for service tax under various heads was unsustainable. The extended period for issuing a show cause notice was deemed inapplicable due to the appellant's genuine belief about non-taxability. Penalties were also not imposed as the demand itself was found unsustainable.

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Issues Involved:
1. Taxability of mining services prior to 01.06.2007.
2. Limitation period for issuing a show cause notice.
3. Imposition of penalty.

Summary:

1. Taxability of Mining Services Prior to 01.06.2007:
The appellant provided 'Mining Services' from 16.08.2002 to 31.10.2006 but did not pay service tax or register for it until 01.06.2007. The appellant received a Show Cause Notice demanding service tax under various heads including Cargo Handling Service, Business Auxiliary Service, and Site Formation and Clearance services. The appellant argued that mining services were only taxable from 01.06.2007, and activities prior to this date cannot be bifurcated under different heads for service tax purposes. They cited multiple decisions, including the Hon'ble Supreme Court's ruling in CCE Vs. Larsen & Toubro Ltd., which stated that activities not taxable before a particular date cannot be retrospectively taxed. The Tribunal agreed, noting that the CBEC Circular dated 12.11.2007 clarified that no service tax was leviable on mining activities before 01.06.2007. Hence, the artificial bifurcation and demand for service tax were not sustainable.

2. Limitation Period for Issuing a Show Cause Notice:
The appellant contended that the extended period for issuing a show cause notice could not be invoked as they were under a bona fide belief that mining services were not taxable before 01.06.2007. They cited several decisions, including Atwood Oceanics Pacific Ltd. Vs. Commissioner of Service Tax, Ahmedabad, which held that if two views are possible, extended period cannot be invoked. The Tribunal found no evidence of intentional evasion of service tax by the appellant and held that the demand for service tax by invoking the extended period was not sustainable.

3. Imposition of Penalty:
The appellant argued that penalties were not applicable as their actions were based on a bona fide belief. The Tribunal observed that since the demand itself was not sustainable on merit and limitation grounds, the imposition of penalties did not arise.

Conclusion:
The Tribunal set aside the impugned order and allowed the appeal filed by the appellant, concluding that the demand for service tax and penalties were unsustainable.

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