TaxTMI 
TaxTMI 
TaxTMI 
2018 (11) TMI 31
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be encountered during normal course of mining) to the designated dump yard at an average distance of 2.5 KM. 1.1.4. Crushing and screening of ROM to finished product of desired sizes. 1.1.5. Transportation of finished product to stack yards of Tata Steel at an average distance of 3 KM. Article 8. PRICE 1. Excavation of ROM 54,00,000 MT @Rs.53.99 Per MT 2. Crushing 54,00,000 MT @Rs.80.01 Per MT 3. Transportation of stock 54,00,000 MT @Rs.17.58 Per MT 4. Sub-grade 15,00,000 MT @Rs.45.75 Per MT 5. Rejects removal 18,00,000 MT @Rs.48.91 Per MT" 1.2. Likewise the details of the contract with M/s. B.K. Coalfields Ltd. are as follows: "Scope of work Includes, Excavation and transportation of a) Run of Mine to static Grizzly b) Overburden material/rejects to the designated stock yard c) Segregated lumps to the crushing plant d) Segregated lumps to the labour yard. For carrying out the above mentioned work you will be paid as under Sl.No. Description Unit Rate (Rs.Ps) 1. Drilling, loosening, excavating, loading and transportation to dump yard at a distance of 1.5 KM (overburden and rejects) Per Tonne 40.00 2. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....service tax in respect of M/s. B.K.Coalfields Ltd. The assessee has challenged the demand for service tax raised in respect of the contract with M/s. TISCO under the categories of "Business Auxiliary Service" and "Cargo Handling Service". Both the appeals originate out of the same Order-in-Original and are being disposed of with this common order. 2. With this background we heard G.Natarajam & Shri N.K.Dash, Advocates for the assessee and Shri K.Choudhari for the Revenue. 3. Ld.DR justified the upholding of the demand of service tax for TISCO Contract by the ld. Adjudicating Authority. But he submitted that the Adjudicating Authority has erroneously dropped the demand for service tax in respect of M/s. B.K.Coalfields Ltd. and in this regard he relied on the grounds advanced by the revenue in the appeal filed by the them. 4. Ld. Advocate on the other hand, submitted that the Commissioner has rightly dropped the demand for service tax in respect of M/s. B.K.Coalfields Ltd. He emphasized the fact that the contract executed with M/s. B.K.Coalfields Ltd. was a consolidated contract and the activities in the nature of mining. This aspect has been appreciated by the adjudicating author....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ning of the excavated materials iv) Transportation of finished products to stock yard of Tata Steel within the mine. It is obvious that all these activities are required to be carried out within the mine and in relation to mining activities. It is also to be recorded that all the activities outlined are within the scope of a single contract, even though different prices have been indicated in the contract itself for various activities which are required to be performed. 7. The adjudicating authority has picked up two of the activities for charging service tax under the categories of "Business Auxiliary Service" for crushing of ore lumps as well as "Cargo Handling Service" for transportation of stock. It is to be noted that the contract is not a service contract simplicitor either for crushing or for transportation of material. It is a composite contract encompassing all the activities listed therein. When the entire scope of the contract is considered, it is evident that this will be covered only within the category of mining which has been included as a separate service w.e.f. 01.06.2007. The Tribunal in the case of the appellant reported in Thriveni Earthmovers Pvt. Ltd. vs. C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ses. It will also be noticed that no attempt to remove the non-service elements from the composite works contracts has been made by any of the aforesaid Sections by deducting from the gross value of the works contract the value of property in goods transferred in the execution of a works contract." 6.1 In view of the above ratio laid down by Apex Court Service Tax as 'Site formation Service' could be levied if there is a 'Service Contract Simplicitor' to that effect. However, once the contract is a composite contract for the entire activities from Site formation to segregation of Ores then the same has to be charged as a separate service (Mining Services), which was made chargeable to Service Tax w.e.f. 01-6-2007 only. Such operations under a composite contract cannot be treated as 'Site formation' or 'Cargo Handling Service' before 01-6-2007." 9. In view of the above decisions we are of the considered view that vivisecting the composite contract and charging service tax on different components of the contract individually under different services is not justified. Consequently, we set aside the demand in respect of M/s. TISCO contract and allow the appeal of the assessee. 10.....