TaxTMI 
TaxTMI 
2020 (4) TMI 343
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....ated in the chart below: S.No. Issue Amount of Service Tax 1. Handling/Transport charges received from South Eastern Coal Field3 and Mahanadi Coalfield Ltd4 for transportation of coal within mines. Rs. 3,00,17,134/- 2. Construction of shop-cum godown for Krishi Upaj Mandi Samiti Rs. 1,13,68,453/- 3. Construction of road inside the premises of BALCO, SECL, NTPC Rs. 1,50,11,016/- 4. CSEC internal road construction work provided to Prasad & Co. Rs. 6,13,030/- 5. Construction of residential houses for employees of NTPC Rs. 12,70,497/- 6. Handling/Transportation of coal within Jindal Super Thermal Power Plant Rs. 7,83,923/- Total Rs. 5,90,69,053/- 3. The appellant is engaged in various activities such as transportation of goods by road, mining activities and civil construction services. A show cause notice dated 16 October, 2012 was issued to the Appellant. The Appellant was called upon to show cause as to why: (i) Service Tax amounting to Rs. 15,27,86,616/- on taxable value of Rs. 142,40,080/- should not be recovered under the provisions of section 73 of Act; (ii) Interest at appropriate....
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....vant portion of the order of the Commissioner on this issue is reproduced: "14.1.1 I do not accept the Noticee's classification of the work of transportation of coal performed by the Noticee within the mines area as well as up to point of dispatch like the railway siding, awarded by owner of the mines like M/s SECL and M/s MCL, under GTA services. xxxxxxxx 14.1.3 So the definition of "Mines" given in the Mines Act, 1952 includes the railway siding within the ambit and scope of "Mines", therefore, all processes including handling and movement of coal from one point of mines to dispatch point of mines appear to be activities carried out "in relation" to mining of minerals, notwithstanding the fact that between the point of loading to dispatch point, some parts may not be covered within the mines. 14.1.4 The expression "mining of minerals" would have normally cover only the process of extracting coal physically. However, the definition contains the expression "in relation to mining". I accept the view that the expression "in relation to" has wider connotation. It widens and expands the scope, meaning and content of the expression "mining" so as to a....
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....al Board of Excise and Customs (CBEC )as also the decision of the Supreme Court in Commissioner of Central Excise and Service Tax, Raipur vs. Singh Transporters 2017 (7) TMI 494-Supreme Court. 11. Shri Radhe Tallu, learned Authorised Representative of the Department has, however, supported the finding recorded on this issue in the impugned order. 12. The taxable service defined under section 65 (105) (zzzy) of the Act means any service provided or to be provided to any person by any other person, in relation to mining of mineral, oil or gas. The Commissioner has placed reliance upon the definition of "mines" under the Mines Act, 1952 and has observed that all processing including handling and movement of coal from one point of mines to dispatch point of mines are activities carried out "in relation to" mining of minerals. Learned Counsel for the Appellant has submitted that the transport of coal within mines would not be leviable to service tax under the category of "mining services". 13. This issue was examined by the Supreme Court in Singh Transport. The issue involved was whether coal transported from pitheads of the mines to the railway sidings would fall within the ta....
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....e provided some construction work for shop cum godown to be used by APMC for its commercial use. So, I do not agree with the contention of Noticee saying that the instant case is exempted vide Circular No. 80/2004-ST dated 17.09.2004. In the aftermath of negative list there is an exemption to services related to construction of warehouses for storage of agricultural produce but no such exemption was applicable/ existed during the relevant period of demand. Hence it is held that a value of receipt of Rs. 10,61,08,467/- from Krishi Upaj Mandi is taxable." 17. Learned Counsel for the Appellant has submitted that under the agreement with Krishi Upaj, the Appellant had to level the ground and construct godowns and shops for which purpose the Appellant was awarded a tender having a composite value of Rs. 4.75 crores, which according to the Appellant was a composite contract where the service provider was responsible for construction of shops/gowns. It would, therefore, be classified under "works contract" which was made taxable only with effect from 1 June, 2007 and, therefore, such activity could not be subjected to tax under "commercial or industrial construction" service as defined....
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....pment or structures, whether prefabricated or otherwise, installation of electrical and electronic devices, plumbing, drain laying or other installations for transport of fluids, heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work, thermal insulation, sound insulation, fire proofing or water proofing, lift and escalator, fire escape staircases or elevators; or (b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry; or (c) construction of a new residential complex or a part thereof; or (d) completion and finishing services, repair, alteration, renovation or restoration of, or similar services, in relation to (b) and (c); or (e) turnkey projects including engineering, procurement and construction or commissioning (EPC) projects;" 21. It is a fact that the contention that the activity would appropriately be classified under "works contract" and, therefore, would not be covered under "commercial or industrial construction" was not taken by the appellant before the Commissioner, but being a legal plea ....
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....to forbidden territory namely into such portion of such cost, expenses and profit as would be attributable in the works contract to the transfer of property in goods in such contract. This being the case, we feel that the learned counsel for the assessees are on firm ground when they state that the service tax charging section itself must lay down with specificity that the levy of service tax can only be on works contracts, and the measure of tax can only be on that portion of works contracts which contain a service element which is to be derived from the gross amount charged for the works contract less the value of property in goods transferred in the execution of the works contract. This not having been done by the Finance Act, 1994, it is clear that any charge to tax under the five heads in Section 65(105) noticed above would only be of service contracts simpliciter and not composite indivisible works contracts. xxxxxxx xxxxxxx xxxxxxx 24. A close look at the Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65(105) would refer only to service contracts simpliciter and not to composite works contracts. This is clear....
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....nd it would still fall under the definition of "Works Contract Service". The show cause notice was, however, issued to the Appellant alleging that the Appellant is providing ECIS." 24. In the instant case also the definition of "commercial or industrial construction" remained the same even after 1 June, 2007. The demand could not, therefore, have been confirmed under "commercial or industrial construction" service. CONSTRUCTION OF ROAD INSIDE BALCO, SECL, NTPC 25. The findings recorded by the Commissioner on this issue are as follows: 16.1 I do not agree with the Noticee claim of exemption on construction work of road/ inside roads provided to body corporate like BALCO, SECL, NTPC. The relevant work orders show the following scope of work. xxxxxxxxxxxx 16.2 It is true that construction of road/ dam/ canal work is excluded from taxable service definition in both the categories of services i.e. "Commercial or Industrial Construction" or "Works Contract" but the said exclusion is meant to promote public infrastructure like roads/ dams/ canals which is to be used by public at large. Road is not defined in Finance Act, 2994. But as per Law Lexicon mea....
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....ricultural Marketing Board. The Department interpreted that since road constructed by those organizations are used for their Commercial purpose only and the right to use the passage was with them, the roads constructed by the appellant should not be considered as Public roads, in order to fall within the exclusion clause provided under the Definition of Commercial and Industrial Construction Service, under Section 65(105)(zzq) of the Finance Act, 1994. Accordingly, the adjudged demand was confirmed against the appellant under such category of taxable service. 7. On perusal of the above definition, it would reveal that construction of roads is excluded from the preview of such taxable service. The definition of taxable service does not specify the type of roads, whether private or public for the purpose of consideration of such exclusion clause. Since the definition is specific to service provided in respect of road only, in our considered view, it cannot be interpreted that only construction of public roads should get the benefit of exclusion provided in such definition clause. In other words, irrespective of the purpose of construction of the road, whether for public util....
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....N (CW & C)" in the above table. But the Noticee could not furnish the details regarding the services against which they received further a differential value of Rs. 1,23,34,925/-( Rs. 5,24,38,250- 4,01,03,325) from NTPC. Hence, I treat that the said differential value as taxable and the same includable in the total value liable for Service Tax." 33. The activity carried out by the Appellant is construction of residential houses for employees of NTPC as would be clear from the work order. The submission of learned Counsel for the Appellant is that the said activity is not leviable to service tax since the construction of residential quarters was for personal use. 34. To examine this issue, it would be appropriate to reproduce the definition of "residential complex" under section 65 (91a) of the Act and it is as follow: "Section 65(91a) "residential complex" means any complex comprising of- (i) a building or buildings, having more than twelve residential units; (ii) a common area; and (iii) any one or more of facilities or services such as park, lift, parking space community hall, common water supply or effluent treatment system, located with....
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....Rs. 63,42,423/- from M/s JPL as receipt against their transportation by road services. But on perusal of the work order No. JPL/CHP/RK/1087 dated 13.06.07 and work order dated 16.08.2007 describe the work as "loading & transportation of crushed coal from CHP (mine end) to CHP (inside) at 4x250 MW O.P Jindal Super Thermal Power Plant, Tamnar subject to the following terms & conditions "Loading into dumper through pay loader...(iii)No. of dumpers 6-8 capacity 20-25 MT and minimum working of 1000 to 1200 MT per day will be provided by JPL... Service Tax will be paid extra..." etc. The above scope of work clearly shows that the Noticee was engaged in rendering services of shifting of coal from one place to another within the Power Plant premises, taxable under 'cargo handling services' for which the Noticee was already registered with the Department.. Accordingly, R.s 63,42,423/- is held to be taxable under the said service." 39. The Commissioner has confirmed the demand on the amount received from JPL under "cargo handling service" for coal transported within the power plant. 40. The submission of learned Counsel for the Appellant is that the Appellant was rendering GTA service ....
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....ental to freight; and (b) Service of packing together with transportation of cargo or goods, with or without one or more of other services like loading, unloading, unpacking, But does not include, handling of export cargo or passenger baggage or mere transportation of goods; 43. A perusal of the work order shows that the activity undertaken by the Appellant was of transportation of coal through dumpers. The Appellant loads the coal on to the dumpers using pay loaders and then transports the coal to the power plant. The activity, therefore, is clearly of transportation of goods by road and the liability to pay service tax is on the recipient of service and not on the service provider. 44. In this connection, it would be appropriate to refer to a decision of this Tribunal in Jain Carrying Corporation vs. Commissioner of Central Excise, Jaipur 2019 (24) GSTL 376 (Tri.-Del.). The Bench observed that the transportation was the main activity and loading and unloading was incidental to transportation. The service rendered would, therefore, be 'transportation of goods by road' and not 'cargo handling' service. The relevant portion of the decision is reproduced as un....
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....s of more than one service, should be treated as a single service based on the main or principal service and accordingly classified. While taking a view, both the form and substance of the transaction are to be taken into account. The guiding principle is to identify the essential features of the transaction. The method of invoicing does not alter the single composite nature of the service and classification in such cases are based on essential character by applying the principle of classification enumerated in section 65A. Thus, if any ancillary/ intermediate service is provided in relation to transportation of goods, and the charges, if any, for such services are included in the invoice issued by the GTA, and not by any other person, such service would form part of GTA service and, therefore, the abatement of 75% would be available on it." 25. A perusal of the same shows that composite service may include various intermediary and ancillary services such as loading/ unloading, packing / unpacking etc. provided in the course of transportation of goods by road. These services are not provided as independent activity but as means of successful implementation of the principal....