TaxTMI 
TaxTMI 
TaxTMI 
2016 (12) TMI 1131
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.... listed as per Orissa High Court's Order dated 02.12.2015 in OTAPL 13 of 2014. 2. Dr. Samir Chakraborty (Senior Advocate) appeared on behalf of the appellant. Learned Senior Advocate during the course of hearing as well as through written submissions argued the appellant is providing 'Mining Services' to Tata Steels Mines Division, Khondbond Iron Mine for which a composite charge of Rs. 72/- per CuM is agreed upon as per the contract entered with the service recipient. That as per the scope of contract appellant is required to undertake the following activities in the mines of the service recipient and only blasting of mines is done by the service recipient :- (i) Site preparation (ii) Dozing (iii) Making holes (iv) Excavating (v) Loading (vi) Transporting and dumping blasted rejects comprising of Laterite, Laterised Hard Ore etc. to dump yard as per the mine excavation plan prepared by Tata Steel. (vii) Handling of waste materials and mixed ore/hard ore. 2.1 Learned Sr. Advocate made the Bench go through para 1.0 & 2 of the contract entered with Tata Steel. It was argued that in the scope of the work under Handling of Mixed Ore/Hard Ore it is specifically agreed than any ....
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....ials from Sedimentary ("Soft") rocks as defined below:- "Underground mining (soft rock) refers to a group of underground mining techniques used to extract coal, oil shale, potash and other minerals or geological materials from sedimentary ("soft") rocks. Because deposits in sedimentary rocks are commonly layered and relatively less hard, the mining methods used differ from those used to mind deposits in igneous or metamorphic rocks (see Underground mining (hard rock)). Underground mining techniques also differ greatl from those of surface mining." 2.4 That following has been described in Wiley Online Library about Iron ore in Joda and Khondbond Areas in Orissa:- Precambrian iron ores of the Singhbhum-North Orissa region occur in eastern India as part of the Iron Ore Group (IOG) within the broad horse-shoe shaped synclinorium. More than 50% of Indian iron ore reserves occur in this region. Massive-hard, flaky-friable, blue dust and lateritic varieties of iron ores are the major ore types, associated with banded hernatite, jasper and shales. These ores could have formed as a result of supergene enrichment through gradual but extensive removal of silica, alumina and phosphorus fro....
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....l also be chargeable to Service Tax as 'Site Preparation' and that is why demand for the entire period 15.06.2005 to 31.03.2008 has been confirmed by the adjudicating authority. That in the light of the CBEC Circular No.354/141-2010-TRU dated 24.08.2010 activities of the appellant was liable to Service Tax under 'Site Preparation' and 'Cargo Handling Services' prior to 18.06.2007. Learned AR relied upon CBEC Circular No.232/2/2006-CX.4 dated 12.01.2007 to argue that demand has been correctly confirmed by holding the activities rendered by the appellant as site formation services. That the case laws relied upon by the Appellant are not applicable as per para 5.23 of the Order-in-Original dated 10.10.2011. Learned AR relied upon the case law of Instrumentation Ltd. [2011 (23) STR 2211 (Tri.-Delhi) as discussed by Adjudicating authority in para 5.21 of Order-in-Original dated 10.10.2011 in support of his arguments. 4. Heard both sides and perused the case records. The issue involved in this appeal is whether the activities undertaken by the appellant for service recipient Tata Steels, amounts to providing of 'Mining Services' and whether the same could be taxed as 'Site Preparation S....
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....e sequence of operation will normally be co make 100mm dia. Holes as per guidance of the company's representative, loading of blasted material, transportation of the same to different dump Yard. Except blasting all the other activities as mentioned above will be done by the party using his own machinery. Blasting will be done by the Steel Company. Handing of different material: Handling of Waste Material: The waste material (laterite/Soil/flaky ore/Friable ore/BHJ/BHQ) will be dumped at separate places/dump yard as per the instruction of company representative. Handling of Mixed Ore/ Hard Ore: Any Mixed Ore/Hard Ore encountered during the course of excavation will be made free from contamination (Laterite/Soil/Waste and other inferior material) by the party at the face using his own machineries. The Quality of the above ore will be certified by company's representative for freeness of contamination before tansporting the same to the Stock Yard near Departmental crusher by the party using his own means. 4. Total Quantity to be Excavated : 13,00,000 ..Cu M(+/-5%)(65,000) a) YEAR 1st 2nd 3rd QTY.(CuM) CuM/MONTH 5,20,000 44,000 5,20,000 44,000 2,60,000 22,....
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....2006-CX-4 dated 12.11.2007 does not prescribe that composite services should also be taxed individually even if no separate consideration for each activity is available/contracted. Rather para 6 of this Circular convey that these are general guidelines for settlement of pending disputes and should be applied to individual cases keeping in view the facts and circumstances of each case. Para 4 of this Circular is categorical that no Service Tax on mining activities/operations is leviable before 01.06.2007. Further CBEC vide Circular No.123/5/2010-TRU dated 24.05.2010; while deciding the aspect of 'site formation and clearance, excavation earthmoving and demolition services' and laying of cable under the roads and similar activities; clarified as follows:- "(iv) 'Site formation and clearances, excavation, earthmoving and demolition services' are attracted only if the service providers provide these services independently and not as part of a complete work such as laying of cables under the road." 5.1 In the present proceedings before us also contract is not for site formation alone but also include a host of other activities including extraction/segregation of ore as per service rec....
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....aste and mining of ore. We also note that there is only one contract with the appellants showing the scope of work as excavation and removal of O/B waste and mining of ore. This activity starts from excavation and ends at mining of ore. We find that this is a composite activity and cannot be split into two separate parts for levy of service tax. We are supported in taking this view by the decision of Tribunal in case of M. Ramakrishna Reddy v. CCE reported in 2009 (13) S.T.R. 661 (Tri.-Bang.) wherein it was held that removal of over burden and excavation of ore is undertaken for mining of ores only and activity does not fall under Site Formation and Excavation and Earth moving and Demolition service. Following the said decision, we hold that since the activity undertaken by the appellants is also excavation and removal of over burden and mining of ore, it is not classifiable under Site Formation, Cleaning, Excavation, Earthmoving and Demolition services. 6. In the aforesaid circumstances, we set aside the order of the Commissioner and allow the appeal. The Miscellaneous Application filed by the appellants also stands disposed of. 5.2 Similar views were expressed by CESTAT Bangalo....
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....case of Daelim Industrial Company v. CCE, Vadodara [2006 (3) S.T.R. 124 (Tri.-Del.) = 2003 (155) E.L.T. 457 (Tri.-Del.)] upheld by the Apex Court [2007 (5) S.T.R. J99 (S.C.) = 2004 (170) E.L.T. A181 (S.C.)]. Consequently, we hold that the services rendered by the appellant are classifiable only under the category of "Mining Services" and therefore they would not be liable to service tax prior to 1-6-2007. In the light of the above finding, there is no justification for imposition of any penalty. Hence, we allow the appeal with consequential relief." 5.3 Reliance placed by the Adjudicating authority on CESTAT Delhi Bench case law of Instrumentation Ltd. [2011 (23) STR 2211 (Tri.Delhi.)] is not of much help in view of the above case laws available on the specific issue involved in this appeal. 6. Hon'ble Apex Court in the case of Commissioner of C.Ex. & Cus., Kerala vs. Larsen & Toubro Ltd. (supra), while deliberating on the issue of indivisibility of Work Contract, distinguished between 'Contracts Simplicitor' and 'Composite Works Contracts' in para-24 of this case law as follows:- "24. A close look at the Finance Act, 1994 would show that the five taxable services referred to in....