TaxTMI 
TaxTMI 
2017 (5) TMI 704
X X X X Extracts X X X X
X X X X Extracts X X X X
....ous customers, on job charges basis. They are registered with the Service Tax Department for payment of service tax under "Business Auxiliary Service". The iron ore lumps received from the customers are crushed by the appellants to the required fineness. In most of the work orders, the loss of 3 to 4% of iron ore lumps were agreed upon between the customer and the appellant. These losses are attributed to ground loss, crushing loss, moisture loss etc. The Revenue, upon examining the annual reports of the appellant for the period 2006-2007 to 2010-2011, entertained a view that the appellants have recovered huge quantities of iron ore fines and shown it as 'self-generated'. The Department contended that these iron ore fines arising out of cru....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e) is available with the appellant. Such iron ore fines are categorized as self-generated fines and are retained by the appellant and disposed of as their product ; (b) there is no legal basis for adding a notional value of these iron ore fines to the taxable consideration of crushing charges. The crushing charges are fixed without any reference to possible recovery of iron ore fines by the appellant. In fact, it had no impact on the charges fixed for crushing ; (c) all the crushing units undertaking similar work are following the same business practice. It is also evident that the possible recovery of iron ore fines within the permissible percentage of loss, has no impact on the fixation of crushing charges ; (d) the iron ore fine....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s and perused the appeal records. The point of dispute is the valuation of taxable service rendered by the appellant. Admittedly, the appellants are discharging service tax on the crushing charges they received from the customers. The dispute is relating to additional consideration in the form of iron ore fines emerging during the course of such crushing, available with the appellant. The crushing charges are fixed per M.T. of iron ore lumps received by the appellant for crushing. The percentage of ground loss is also mentioned in the work order of the customer. The required fineness of the crushed product is also indicated in the work order. We have perused some of the work orders. The ground loss in these work orders are mentioned as 3%, ....