TaxTMI 
TaxTMI 
2023 (8) TMI 792
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.... the facts of the case are that the appellant being a Public Sector Undertaking, floated a tender in order to invite bids for hiring of services for drain hole drilling in the existing oils wells un Assam using Ultra Short Radius Drilling Technology. The work was awarded to M/s Well Flow Drilling Services having its Principal Office in Bahrain. Thereafter a contract dated 25.08.2006 was executed between the appellant and the contractor. 2.1 The aforesaid work is to plug existing dead wells and drill new wells for exploration of oil by making horizontal drilling from such existing/dead wells. The said process is known as Ultra Short Radius Horizontal Drilling. 2.2 The Revenue alleges that the appellant has executed works contract servi....
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....aking horizontal drilling from such existing/dead wells. He, therefore, submits that the impugned proceedings are to be dropped against the appellant. 4. On the other hand, the ld.A.R. for the Revenue, supported the impugned order. 5. Heard both the parties and considered the submissions. 6. We have gone through the impugned order and the scope of the works executed by the contractor is as under : "1.0 INTRODUCTION ONGC has planned a project of drilling and re-completing 15 Ultra Short Radius Drain Holes (USRDH) from existing wells of Assam Asset, Nazira on Integrated Well Completion Basis. These 15 wells are spread over two different sandstone reservoir fields of Assam Asset, namely Lakwa - Lakhmani and Geleki. T....
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....(Section milling, Under-reaming Dressing off cement Kickoff Plug, Drilling Pilot Hole to KOP) • *Drilling of USRDH including Non-Damaging drilling fluids. • *Well Completion with Gas Lift/AL. (as per schedule of responsibility Clause No. 14) ....................................................... 6.0 SPECIFIC DESCRIPTION OF THE CONTRACTOR'S SERVICES 6.1 WELL DESIGING AND PLANNING ................................................. • To provide the step by step plan for rig deployment, drilling, completion and testing of each well along with time schedule for each activity........................... 6.2 RIG AND EQUIPMENT • To deploy one suitable ri....
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.... supervision of cement kick-off plug • Dressing of the cement plug to a pre-determined depth. • Drilling the pilot hole to the desired kick-off point............................ 6.6 USRDH DRILLING: • To plan and design drain hole drilling in consultation with Corporation and undertake tool face orientation with gyro curve and lateral drilling and surveying of 4½" / 3 7/8" hole using USRD technology as per planned well trajectory. Drain hole length shall be of the order of 150m.................................. 6.7 WELL COMPLETION SERVICES • To plan, design, execute and co-ordinate the various activities of completion and testing in consultation with Corpor....
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.... by making horizontal drilling from existing/dead wells, there is no activity in the work order with regard to "management, maintenance and repair" services of the existing wells. 8. In that circumstances, we hold that the merits classification of the above services is "mining service", which came under the Statute w.e.f. 01.06.2007 and in the case of Atwood Oceanics Pacific Limited Vs. Commissioner of Service Tax, Ahmedabad reported in 2013 (32) STR 756 (Tri.-Ahmd.), this Tribunal held that the drilling, testing and completion of exploratory oil wells will be taxable only w.e.f. 01.06.2007 as services in relation to mining of mineral, oil or gas. 9. Again, in the case of M/s Quippo Oil and Gas Infrastructure Limited Vs. Commissioner ....