TaxTMI 
TaxTMI 
2024 (3) TMI 72
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....-Original dated 31.03.2013. 2. The facts of the case are that the Appellant entered into three (3) Contracts/Agreements and gave on hire 3 Nos. of High Pressure Truck Mounted Mobile Air Compressor (in short 'HPMACs'), owned by the appellant, to M/s Oil & Natural Gas Commission Ltd., Sivasagar ('ONGC', in short) and M/s. Oil India Limited, Duliajan ('OIL' in short). As per these Contracts/Agreements, the appellant operated the said HPMACs at the mining sites of ONGC and OIL to produce and supply excisable goods viz. 'Compressed Air', falling under the Central Excise Tariff Heading No. 28530030 chargeable to 'Nil' rate of duty, for use in the oil exploration. In the case of two (2) other Contracts/Agreements, signed with ONGC, the 2 ....
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....the provisions of Finance Act, 1994 for levy of Service Tax cannot be applied. But in respect of other two HPMACs that were owned by ONGC, the ld. Adjudicating authority as well as the ld. Commissioner (Appeals) has held that the process involved rendering of "mining service", as defined under Section 65(105)(zzzy) of the Finance Act, 1994 and confirmed the demand of service tax Rs.6,23,430/- pertaining to the period December, 2007 to September, 2011 along with interest and penalties under Sections 77 and 78 of the Finance Act. The appellant submits that except the ownership of the HPMACs, all other terms and conditions for production and supply of compressed air remained same in respect of both the set of contracts. 3.1 The appellant subm....
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....d in the production of Compressed Air from the raw material atmospheric air leading to the emergence of a new identifiable commodity, which is different from the raw material that was used. In the case of Indian Oxygen Ltd Vs. Collector of Central Excise, reported in 1989 (43) E.L.T. 454 (Tribunal), which has been upheld by the Hon'ble Supreme Court as reported in 2000 (119) E.L.T. A174 (SC)] it was inter alia held that compressed gas was liable to duty under item 68 of the then Central Excise Tariff Act, 1985. 3.3 The appellant submits that they have agreement for manufacture of Compressed Air in respect of all the five agreements. When the adjudicating authority has agreed that manufacture of excisable goods occurs in respect of three co....
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....ingly, he supported the impugned order confirming the demands under 'Mining Services'. 5. Heard both sides and perused the appeal documents. 6. We observe that the Appellant has executed two set of contracts. In the first one, they gave 3 Nos. of HPMACs owned by them, on hire to 'ONGC' and 'OIL'. As per these Contracts, the appellant operated the said HPMACs at the mining sites of ONGC and OIL to produce and supply excisable goods viz. 'Compressed Air'. Both the lower authorities agreed that the activities undertaken by the Appellant resulted in the manufacture of new excisable goods namely, 'Compressed Air' falling under the Central Excise Tariff Heading No. 28530030 chargeable to 'Nil' rate of duty, which has bee....
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....pellant was solely responsible to operate and maintain the HPMACs, owned by ONGC also, to produce and supply compressed air to ONGC. 6.2 Thus, we agree with the contention of the Appellant that the ownership of the plant and machinery used for the manufacture of 'excisable goods' cannot be a criteria for charging Central Excise duty. Accordingly, we hold that the activity undertaken by the appellant in both the cases amounts to manufacture of 'Compressed Air' chargeable to Nil rate of duty and hence, no Service Tax is leviable on such activities. 7. We observe that in respect of the HPMACs owned by ONGC, both the ld. adjudicating authority as well as the ld. Commissioner (Appeals) has held that the process involved amounts....