2010 (3) TMI 478

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....rmed the following liabilities against the appellants:- (i) Service tax of Rs.64,21,913/- (ii) Interest (not quantified); (iii) Penalty of Rs.200/- per day or Rs.5000/- whichever is higher under section 77 (1)(a) of the Finance Act, 1994 (the Act). (iv) Penalty of Rs.2000/- under section 77 (1)(b) of the Act; (v) Penalty of Rs.200/- per day or Rs.5000/- whichever is higher under section 77 (1)(c) of the Act; (vi) Penalty of Rs.2000/- under section 77(1)(d) of the Act; (vii) Penalty of Rs.2000/- under section 77(1)(e) of the Act; and (viii) Penalty of Rs.64,21,913/- under section 78 of the Act. The appellants seek waiver of pre-deposit and stay of recovery of the above dues. 3. The appellants are engaged in the ....

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....n Section 2(f) of the Central Excise Act, 1944 cannot be vivisected to charge tax on some part of the activities involved. In our considered view, this is what the lower authorities have done in the cases covered by both the appeals. Moreover, in the first appeal there is demand on different activities of the O and M contractor categorized as Management Consultant, Consulting Engineer and Clearing and Forwarding Agent without giving the taxable value in each case. We find that tax cannot be levied when the liability of the assessee is not determined precisely with respect to each of the taxable services found to have been rendered. No tax can be levied without specifying taxable value." The impugned demand and penalties are therefore not....

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....ied as 'Business Auxiliary Service'. It has been brought to our notice that vide Order-in-Original dated 19.11.2008, the same Commissioner of Central Excise had passed an order demanding Central Excise duty on iron ore produced in mining by the appellant's sister concern M/s. Tungabhadra Special Products (Division of Tungabhadra Minerals Pvt. Ltd.). Therefore, the activity of crushing, screening, sorting, grading, processing, etc. of iron ore cannot be taxed under 'Business Auxiliary Service. In this connection, we note the following findings of the Tribunal in CMS (I) Operations and Maintenance Co. P. Ltd. (supra) "As per this definition, any activity involving manufacture of any goods within the meaning of clause (f) of Section 2 of th....

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....nstruction, geophysical, geological or similar purposes; or (ii) soil stabilization; or (iii) horizontal drilling for the passage of cables or drain pipes; or (iv) land reclamation work; or (v) contaminated top soil stripping work; or (vi) demolition and wrecking of building, structure or road, But does not include such services provided in relation to agriculture, irrigation, watershed development and drilling, digging, repairing, renovating or restoring of water sources or water bodies; The CBEC vide letter D.O.F. No.334/1/2007-TRU dated 28.2.2007 clarified the scope of the entry as follows: "3. Excavation/drilling and removal of the overburdens: These activities are essentially in the nature of site formation, ....