TaxTMI 
TaxTMI 
2016 (10) TMI 878
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....various activities undertaken by them. On completion of scrutiny, proceedings were initiated against the appellant by issue of show cause notice dated 30/5/2008. The show cause notice proposed demand of service tax of Rs. 43,82,72,086/-. The notice also proposed imposition of various penalties and collection of interest on service tax not paid. After due process, the Commissioner adjudicated the case, vide the impugned order he held that the appellants are liable to pay total service tax of Rs. 29,98,68,625/- he also imposed penalty of Rs. 27,47,65,531/- under Section 78 of Finance Act, 1994 and penalty on per day basis in terms of Section 76 of the Act and also Rs. 1,000/- as penalty under Section 77 of the Act. 2. In the present appeal out of three issues involved with reference to tax liability of the appellant connected to the activities of shot hole drilling, gas compression and work over operation and development well drilling, the appellants are contesting mainly their tax liability with reference to their activity of shot hole drilling undertaken for ONGC. The learned Counsel during the argument as well as their written submission mainly contested the service tax liabili....
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....ent or to their main contractor to ascertain the tax liability before actually stopping payment in OIL contract. 4. We have heard both the sides. Though the proceedings were for tax liability on various activities during the submission before us, the appellant is only pressing for and contesting the tax liability on their activity of shot hole drilling under the category of 'survey and exploration of minerals'. The statutory definition relevant to the present case is as below :- Section 65 (104a) of the Act and Section 65 (105) (zzv) of the Act read as under : Section 65 (104a) of the Act "Survey and exploration of minerals means geological, geophysical or other prospecting, surface or sub-surface surveying or map making service, in relation to location or exploration of deposits of mineral, oil or gas". Section 65 (105) (zzv) of the Act "Taxable service' means any service provided or to be provided to any person, by any person, in relation to survey and exploration of mineral". The nature of work undertaken by the appellant as per their written submission is as below :- "1.2 Under the contracts, the Appellant was to undertake shot hole drilling activity fo....
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....We note that the appellants are emphasizing on the legal definition of scope of service in terms of Section 65 (104a) and argued that when the appellants are not engaged in such activity, the definition of taxable service in terms of Section 65 (105) (zzv) cannot expand the scope to bring in all types of activities even remotely connected only on the pretext that these are in 'in relation to' survey and exploration of minerals. In other words, the appellants submitted that the term 'in relation to' cannot be given a scope to indefinitely expand the main tax entry of survey and exploration of minerals. We find that the arguments of the appellant in this context is mis-placed. From the very nature of the work undertaken by them it is very clear that these activities are very much in relation to survey and exploration of minerals. It is also clear that any person providing service to any other person in relation to survey and exploration of minerals is liable to service tax. In other words, the taxable service does not restrict only to the list of activities under Section 65 (104a) but service provided in relation to such activities. It is nobody case that shot hole drilling service p....
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....anding the shots and involve several processes for the entire activity of blasting shot to be made possible. Such entire process is undertaken by the assessee by drilling the shot holes, which are technically highly important, based on sound technology and expertise. Thus, in the entirety of the issue, it is also observed that the purposes conducted by the assessee and by their clients the processes are inter-linked, inter-depended and inter-related which are in relation to to the location or exploration of minerals. Hence, it is not the issue of mere drilling of a hole, rather involves several process for the said purpose and are not ordinary holes". 7. The dictionary meaning and case laws relied upon by the appellants have also been examined by the Original Authority and we find no reason to differ with the findings of the Original Authority. The appellants reliance on the decision of the Tribunal in Saipem (Portugal) Comercio Maritimo vs. CCE, ST & CUS., Visakhapatnam II reported in 2014 - TIOL - 1892 - CESTAT - BANG. is not relevant to the facts of the present case. The terms of agreement in the present case are much more elaborate and specific. The Tribunal held in ....