https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=459082 https://www.taxtmi.com/caselaws?id=459082 Taxable value for the purpose of discharging the tax liability - cost of coal rejects retained by the appellants while providing the services to MAHAGENCO for beneficiation of coal - Whether the nature of services provided falls under the business auxiliary services or the mining services? - HELD THAT:- Appellant admittedly has been selling those rejects and showing the income received therefrom under the head of income. Mere fact that rejects were sold by the appellant does not segregate the process of origination of said rejects from the entire process of beneficiation of coal. The arguments of the appellant that reject is nothing but waste is also not appealable to us, because this argument holds good, has it been the case of excise duty, because the value of scrap is not the subject matter of excise duty. But in the present case, it is the value of service tax being charged for beneficiation of coal, which is in question. The charges are quid pro quo to all above four processes. We do not see any reason to not to include the value of rejects in the taxable value. More so, for the reason that except for MAHAGENCO in all other contracts the value of this reject has been included, by appellant itself, in the taxable value despite the fact that all other clients also allowed appellant to retain the reject to be sold and for income to be retained by appellant. Also for the reason that value of service in contracts with WBPDCL DPL is Rs.281.10 per M.T. including value of reject @ Rs.28 per M.T. whereas for MAHAGENCO the value of service in contract is Rs.68/- per MT for reject. Irrespective, it is the value in contract but it is definitely different in contracts where appellant is same and the purpose and modus operandi is same. In view of entire above discussion, we decide the first point of adjudication against the appellant and in favour of the Revenue. Nature of services provided falls under the business auxiliary services or the mining services - In the present case the period of demand is post May 2007 i.e. from June 2011 to March, 2012 during which the activity in question was nothing but the mining services. Thus, the service of beneficiation of coal cannot be taxed under Business Auxiliary Services post 2007. Demand for rendering mining services, since has been raised and confirmed under Business Auxilliary Service, entire demand is liable to be set aside. However, this 2nd issue stands decided holding that the services in question are mining services. Extended period as invoked - Demand for the period from June 2011 to March, 2012 has been proposed by the Show Cause Notice of October, 2014. Apparently, the Show Cause Notice is beyond the statutory periods. As per Department, the extended period has rightly been invoked due to apparent suppression of facts on part of the appellants. We observe that though the appellants have not got themselves registered for providing the mining services but they were regularly discharging their tax liability. Hence, there is no intention to evade service tax. To our understanding the said act cannot be the positive act of suppression of relevant fact. Therefore, there has been no suppression of facts that too with intent to evade payment of service tax and therefore we hold that extended period has been wrongly invoked by the Department while issuing the impugned Show Cause Notice. Resultantly, the third point of adjudication also stands decided in favour of appellant and against the Revenue. Though point No.1 of adjudication stands decided in favour of revenue but the findings under point No.2 3 have held that during the relevant period the activity of beneficiations of coal was mining service. Hence the proposal and confirmation of demand alleging the activity to be that of Business Auxilliary Service is liable to be set aside. And that there was no suppression to evade tax and extended period could not have been invoked while issuing the Show Cause Notice. Case-Laws Service Tax Mon, 27 Mar 2023 00:00:00 +0530