TaxTMI 
TaxTMI 
2017 (7) TMI 944
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....Briefly the facts of the case are that the appellants are engaged in excavation/extraction of iron ore falling under Chapter Heading 26.01 under a contract with M/s. H.G. Rangana Goud, Hospet from the mines belonging to the clients. Appellants have not paid Service Tax Registration and not paid Service Tax on the activity of mining of iron ores. On being pointed out by the officers of the Department that the said activity is liable to service tax, the appellant deposited the service tax of Rs. 4,62,103/- (Rupees Four Lakhs Sixty Two Thousand One Hundred and Three only) and interest of Rs. 49,568/(Rupees Forty Nine Thousand Five Hundred and Sixty Eight only) on 15.12.2006. Thereafter a show-cause notice dated 30.04.2007 was issued to the app....
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....submitted that the service of "mining of mineral" was brought under the taxable service vide Section 65(105)(zzzy) of the Finance Act 1994 from 01.06.2007 and the same was not taxable under Clause (v) of "Business Auxiliary Service" under Section 65(19) of the Finance Act 1994 prior to 01.06.2007. He also submitted that it is well settled law that an activity taxable from a particular date cannot be subject to tax under a pre-existing classification. He also submitted that the demand of service tax and interest by the adjudicating authority on the said activity of "mining of mineral" during the period from July 2005 to October 2006 under "Business Auxiliary Service" and appropriation of the amounts deposited are patently erroneous. He furth....
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....under any pre-existing entry prior to 01.06.2007. This position was clarified by the Board also vide Circular dated 12.11.2007 ibid. Nevertheless long before 01.06.2007, the assessee had paid service tax with interest forthwith at the department's instance. Though these circumstances did not exist when the Dy. Commissioner passed his order, it did exist when the Commissioner issued show-cause notice under Section 84 of the Act. We are of the view that, considering the non-liability of service tax on the appellant's activity in question for the period of dispute, the Commissioner ought not to have issued the show-cause notice. Secondly, as it appears from the records, the Dy. Commissioner had chosen not to impose any penalty on the a....
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....se circumstances, the Hon'ble High Court's ruling is of paramount support to the appellant. 9. In the result, the penalties imposed on the appellant shall stand set aside. This appeal is allowed." 4. On the other hand the learned AR reiterated the findings of the impugned order. 5. After considering the submissions of both the parties and the perusal of the record, I find that the issue is squarely covered in favour of the appellant by the Division Bench of this Tribunal in the case of Sneha Minerals cited supra wherein in identical facts, this Tribunal set aside the penalties imposed under Sections 76, 77 and 78. Further I also find that in the case of CCE, Jalandhar Vs. Darmania Telecom [2009 (14) STR 145 (P&H)] wherein the Hig....