TaxTMI 
TaxTMI 
2019 (9) TMI 1037
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.... the appellants falls under the category 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....
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....arned Commissioner passed impugned orders 02/2009 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....
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....us. & C.Ex., 2009 (13) STR 42 (Tri. Bang) • M. Ramakrishnan Reddy Vs Commr. of Central Excise & Cus., 2009 (13) STR 661 (Tri. Bang) • Osnar Chemical Pvt. Ltd. Vs Commissioner 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....
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....t, 1994. 4.1 The learned counsel for the appellant further submits that the essential features of all the activities as part of composite service for raising and supply of iron ore; in terms of subsection (2b) of Section 65A 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. v....
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....eiterated the findings of the OIO and OIA. 6. Heard both sides and perused the records. On perusal of the contract, it is seen that the contract is termed a "raising contract" wherein the principals (first party) desirous of utilizing the knowledge and expertise of the second party i.e. appellants who possess the necessary expertise, labour, machinery and equipment, 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 a....
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....anufacture. We find that the issue of mining a product vis-à-vis levy of Service Tax under "Business Auxiliary Service" came before the Tribunal and the different Benches were unanimous in considering that the activity of mining will not attract Service Tax. 7.2. Tribunal in the case of Avian Overseas Pvt. Ltd. (supra) have observed in Para 2 as under: "2. We have 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 "man....
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....ll constitute sale for the purpose of levying service tax, as seen from para 2.5.7 of Draft Guidance Paper A of the instruction issued regarding changes proposed in the Budget of 2012-13." 7.5. We also find that this Bench in the case of M. Ramakrishna Reddy (supra) have held in Para10.2 as under: "10.2 If the above provision is applied, the services rendered would amount to only mining services. As the 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 i....
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....e. Against the very same appellant, Department has issued various SCNs seeking payment of Service Tax under different Heads. When the Tax administration itself is in doubt as to the nature of the service allegation of suppression of fact on the appellants is not sustainable. Therefore, the present appeal is allowed. ST/3568/2012 8. The appellants contended that the demand of Service Tax was made under three different categories 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 Fina....
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....Original Authority and upheld by the Appellate Authority cannot be faulted. Therefore, this appeal is dismissed as far as the demand of Service Tax is concerned. As the issue relates to interpretation of tax liability, penalties are set aside. ST/20792/2017 9. The Department issued a SCN covering the period 01.10.2006 to 31.05.2011 demanding duty under "Business Auxiliary Service" "Excavation/Extraction and Raising of Iron Ore". 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, ....