TaxTMI 
TaxTMI 
2019 (9) TMI 1037
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....of "Business Auxiliary Service" as per Section 65 (19) of Chapter 5 of Finance Act, 1994. Department has issued a SCN dated 28.09.2007 demanding Service Tax of Rs. 1,40,47,532/- along with interest and penalties for the period 10.09.2004 to 30.09.2006. The SCN was adjudicated by Commissioner vide Order No. 01/2009 dated 21.01.2009. Hence Appeal No. ST/172/09 was filed. Further, for the period 01.06.2007 to 30.09.2007, Department contended that the appellants are engaged in the services of "Site Formation and Clearance, Excavation, Earth Moving & Demolition Service" as per Section 65 (97a) of Finance Act, 1994, Business Auxiliary Service as per Section 65 (19) of the Finance Act, 1994 and taxable service in relation to mining or mineral service as per Section 65 (105) of the Finance Act, 1994. A SCN dated 21.10.2008 was issued and was confirmed by OIO No.25/2011-ADC (ST) dated 31.03.2011 passed by Additional Commissioner confirming Service Tax demand of Rs. 16,66,289/- along with interest and penalties which have been upheld by Commissioner (A) vide OIA No. 572/2012 dated 18.10.2012 against the same Appeal No. ST/3568/12 was filed. Department has issued a SCN dated 15.10.2009 to the....
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....2/2009 dated 26.02.2009 and 04/2009 dated 05.03.2009 respectively and confirmed duty demanded along with penalty under Section 77 and 78. 3. Coming to the Appeal No. ST/172/09, Learned Counsel for the appellants submits that the activity undertaken by them amounts to production of excisable goods which is leviable to Central Excise duty in terms of Section 3 of the Central Excise Act, 1944 and in terms of Notification No. 04/2006-CE dated 01.03.2006, the goods are exempted. As they are engaged in the activity of manufacture, no Service Tax can be levied on them; Section 3 of Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare Cess Act, 1976 imposes Cess on iron ore produced in India. As Cess is collected only as duty of Excise when levy under Section 3 of Central Excise Act is attracted; by the activity they undertake, a different commodity which has a distinct name, character and use comes into existence and therefore, the activity requires to be considered as manufacture and thus, not leviable to any Service Tax. He further submits that CBEC vide Circular No. 232/2/2006-CX IV dated 12th November 2007 clarified that service provided by any person to any other ....
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....of C.Ex., 2009 (240) ELT 115 (Tri. Bang) * Ferro Scrap Nigam Ltd. Vs Commissioner of C.Ex., 2014 (36) STR 955 (Tri. Del.) 4. Learned Counsel for the appellants in Appeals No. ST/489 & 490/2009 submits that they had rendered into composite agreements for carrying out the drilling, blasting, excavation, extraction, lifting of ore up to the pit head, screening, etc., of iron ore in the mines of the owners; the entire activity comes within the meaning of raising iron ore for the mine owner and were undoubtedly in relation to "mining of minerals‟; there is no question of carrying out survey and exploration for minerals in the functioning mines; the actual mining operation does not include survey and exploration; similarly, the site formation and clearance, excavation and earth moving and demolition, etc., are not undertaken as no such activities relating to construction are undertaken; the appellants have also not undertaken removal of over burden, etc; therefore, the allegation in the show-cause notice and the impugned orders are without any basis. The consideration received by them was a lumpsum payment as consideration towards the raising transporting and processing of iron ....
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....A of the Finance Act, 1994 "(b) Composite services consisting of a combination of different services which cannot be classified in the manner specified in clause (a), shall be classified as if they consisted of a service which given then their essential character, in so far as this criterion is applicable". He relied upon the following decisions: i. CCE vs. Ores India (P) Ltd.: 2012 (27) STR 188 (Tri.-Kol.) ii. Teknomin Construction Ltd. Vs. CCE, Jaipur-II: 2017 (4) GSTL 65 (Tri.-Del.) iii. Kanak Khaniz Udyog vs. CCE, Jaipur: 2017 (52) STR 46 (Tri.-Del.) iv. Hazaribagh Mining & Eng. P. Ltd. vs. CCE: 2017 (49) STR 289 (Tri.-Kol.) v. M. Ramakrishna Reddy vs. CCE: 2009 (13) STR 661 (T) vi. National Construction Company vs CCE, Jaipur: 2014 (34) STR 739 (T) vii. Aravali Construction C. P. Ltd. vs. CCE, Jaipur: 2017 (6) GSTL 347 (T) viii. Associated Soapstone Distribution Co. Ltd. vs. CCE, Jaipur: 2014 (34) STR 865 (T) ix. CBEC Circular No.334/1/2007-TRU dt.28.2.2007 x. CBEC Circular No.232/2/2006 CX dated 12.11.2007 4.2 He further submits that in the absence of determination of value of each service and service tax thereupon, the impugned orders are defective, t....
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....t, technical know-how to carry on scientific and systematic mining operations such as excavation, extraction, grading, sorting etc. permits the appellants to act as "rising contractor". In terms of Article 3 of the Contract, the second party shall during the continuation of this Agreement, systematically extract, excavate, raise, grade, sort, etc. minerals from the mines. In terms of Article 8, the first party shall pay a sum of Rs. 110 per metric tonne of iron ore and Rs. 125 per metric tonne for iron ore fines. Ongoing through bills available on records, it is seen that the appellants are paid for the quantity of iron ore lumps and C‟ Ore extraction, iron ore extraction charges and iron ore fines extraction for various periods ST/127/2009 7. The main contention of the appellants in this case is that they are manufacturing iron ore and in view of the Hon‟ble Supreme Court‟ decision in the case of Empire Industries Ltd. (supra) and Others the activity undertaken by them amounts to manufacture and therefore, it is beyond the scope of the levy of Service Tax. They contended that they are converting material recovered from earth into a separately identifiable and m....
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....e heard the arguments from both sides and perused the case records and the various citations. We find that the business auxiliary services relate to the production of goods other than the goods produced by way of manufacture. Since coal is an excisable product (presently attracting nil rate of duty), the activity of mining coal and producing coal would come under the definition of "manufacture‟ under Section 2(f) of the Central Excise Act, 1944. Therefore, the contention of the department that the activity of the appellants can be covered under the business auxiliary services during the period 10-9-04 to 15-6-05, cannot be accepted." 7.3. Further, Tribunal in the case of Makjai Laboratories (supra) held in Para 5 as under: "5. As such, the exclusion covers activities which amount to "manufacture under Section 2(f) of the Central Excise Act, 1944". The exclusion is not limited to excisable goods. A plain reading of the statutory provision makes it clear that all activities which amount to manufacture within the meaning given under Section 2(f) of the Central Excise Act, 1944 get excluded, whether or not such manufacture results in an excisable product charged to duty under ....
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.... contract is a comprehensive one for mining, it cannot be vivisected for levying service tax on that portion of the activity relating to "Site Formation" in the light of the decision of the Tribunal in the 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." 7.6. This Bench in the case of Commissioner of Central Excise, Belgaum Vs SVM Net Project Solutions Pvt. Ltd. 2010 (17) STR 298 held in Para 8 as under: "8. We find that in the instant case, the activity undertaken by the appellants is essentially mining which became taxable with effect from 1-6-2007. Therefore, as per the ratio of the above decision, the appellants are not liable to pay Service Tax on the impugned activity under t....
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....es of services and the same was confirmed under the Head "Mining Service" which is beyond the scope of the SCN. If the Department considers the contract is vivisectable and demand was made under three separate categories, confirmation of the same under one heading alone would be beyond the scope of the SCN. We find that SCN was issued demanding Service Tax under "Site Formation and Clearance, Excavation and Earth Moving and Demolition Service"; "Business Auxiliary Service" i.e. (v) production or processing of goods for or on behalf of the client and under Section 65 (105) (zzzy) in relation to Mining of Mineral, Oil or Gas. The adjudicating authority has confirmed the same under "Mining of Mineral, Oil or Gas Service" under Section 65 (105) (zzzy) of Finance Act, 1994. The appellants contended that the contract is not vivisectable and therefore the demand cannot be raised on different headings. We find that as discussed above, the appellants are engaged in mining in terms of the raising contract. The Department has earlier issued a show cause notice discussed above classifying the service under Business Auxiliary Service. In the instant show-cause notice covering the period 1.6.200....
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....The original authority has confirmed the same. The Appellate Authority has set aside the order and held that the activity is classifiable under "Mining of Mineral Oil or Gas Services". The Department is in appeal against the order. We find that as per our discussion above, the service rendered by the appellants is clearly a Mining Service. The Department has issued a SCN dated 21.10.2008 to the appellants seeking to demand duty under three categories which includes the category of Mining of Mineral, Oil or Gas. The Adjudicating Authority has confirmed the demand under only one heading of Mining of Mineral, Oil or Gas. The same was upheld by the Appellate Authority. The Department has accepted this order and no appeal was filed. As we have held above, in respect of Appeal No. ST/3568/2012, the Original Authority and the Adjudicating Authority were correct in concluding that the service rendered by the appellants is Mining of Mineral, Oil or Gas. Therefore, we find that the findings of the Appellate Authority are in conformity with our finding. Therefore, we find that there is no reason to interfere with the same. Accordingly, the appeal filed by the Department is rejected. ST/490/2....