2023 (7) TMI 769 - AT - Service Tax

Tribunal rules in favor of Appellant, exempting 'Mining services' from tax liability pre-June 2007.

S.R. Prudhvi Movers Versus Commissioner of Central Tax Guntur - GST

S.R. Prudhvi Movers Versus Commissioner of Central Tax Guntur - GST - TMI Issues Involved:1. Classification of Services: Whether the services rendered by the Appellant fall under 'Mining services' or 'Cargo Handling services'.2. Tax Liability: Whether the Appellant is liable to pay service tax for the period April 2005 to May 2007.3. Penalties and Interest: Imposition of penalties under sections 76, 77, and 78 of the Act.Summary:Classification of Services:The primary issue in this appeal is the classification of the services rendered by the Appellant, which include excavation of limestone, loading, transportation to the crusher hopper, and unloading. The Revenue contended that these services fall under 'Cargo Handling services' as they involve post-mining activities. However, the Appellant argued that their services are part of mining operations and should be classified under 'Mining services'. The Tribunal referred to previous judgments, including Thriveni Earth Movers Private Limited vs. CCE, Salem, where similar activities were classified as mining services. The Tribunal concluded that the primary activity was mining, and the loading and unloading were incidental to mining operations.Tax Liability:The Tribunal noted that 'Mining services' were brought under the service tax net from 1st June 2007. Therefore, activities prior to this date were not taxable under this category. The Tribunal referred to the Board Circular dated 12th November 2007, which clarified that activities like handling and transportation of minerals within the mining area were not taxable as 'Cargo Handling services' if they were incidental to mining. The Tribunal held that the Appellant's activities were not taxable as 'Cargo Handling services' before 1st June 2007.Penalties and Interest:The Show Cause Notice (SCN) issued on 20th October 2010 proposed a demand of Rs. 1,42,88,356/- for the period April 2005 to May 2007, along with interest and penalties under sections 76, 77, and 78 of the Act. The Tribunal, however, set aside the Impugned Order, ruling that the activities were classifiable under 'Mining services', which were not taxable prior to 1st June 2007. Consequently, the penalties and interest imposed were also set aside.Conclusion:The Tribunal allowed the appeal, holding that the Appellant's activities were classifiable under 'Mining services' and were not taxable prior to 1st June 2007. The Impugned Order was set aside, and the Appellant was entitled to consequential benefits in accordance with the law.