2017 (9) TMI 1326

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....private Ltd. Co. engaged in mining of iron ore fines. They entered into contract with M/s. Dr. Sarojini Pradhan who was lessee of the mines at Baitarni, Ingani Jharan & Balita Mines. As per the agreement entered into by the appellant, the appellant is described as Contractor for the mines owner and was required to undertake mining, crushing, screening and transportation of different materials from the mines making use of their technical, commercial and managerial expertise. For the activity carried out, the appellant was entitled to share the revenue arising from the sale of the iron ore in the ratio of 95:05 with the mine owner. 2. Department was of the view that the activities carried out by the appellant for the mine owner are to be c....

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....e liable to be charged to service tax under the mining service. 5. After hearing both sides and on perusal of the records, we find that the dispute in the present case hinges on the agreement entered into by the appellant with the mine owner Dr.Sarojini Pradhan. Salient features of the agreement are summarised below: "(i) M/s. HMI are the appointed CONTRACTOR to undertake the activities specified in the contract and agreed upon by both the parties. (ii) All sale bills are to be raised by the Mines Owner to the buyers. All sales realization /payment collected from any buyer shall be deposited with the Mines Owner. The contractor shall submit relevant Bill to the Mines Owner for payment against the work executed by them during each m....

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....use (zzzy) of Section 65 (105) of the Finance Act, 1944, defines the taxable service under the category of Mining of Mineral Oil and Gas service as the service to be provided to any person in relation to mining of mineral oil or gas. It is further seen that the mine owner ( who can be considered as service receiver ) pays consideration to the service provider. Consequently, the appellant will be liable to pay service tax on the value of taxable service received by them during the period. 7. The main argument advanced on behalf of the appellant is that the activities undertaken are not to be considered as service but are rendered towards production/ manufacture of excisable goods viz. Iron ore which are specified under Chapter 26 of the F....