TaxTMI 
TaxTMI 
2024 (7) TMI 753
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....n terms of Section 78 and Section 77 on the appellant. Demand of Service Tax of Rs.14,26,631/- and Education Cess of Rs.28,533/- under the head of Business Auxiliary Service (BAS) for the period 01.04.2005 to 28.02.2007 has however been dropped. The Revenue has filed the cross appeal in the matter for non-imposition of penalty on the appellant under section 76 and 77 of the Act and seeking imposition of penalty on the Director of the firm Shri Ajay Jain. The instant appeal were dismissed on account of nonavailability of live bank guarantee as was ordered to be kept pending disposal of the matter by this Tribunal at the time of Stay vide Order No. S/159/Kol/2010 dated 19/04/2010. The present appeal is now being heard in pursuance of the order of the Hon'ble High Court of Kolkata dated 31/01/2014 in CEXA/17/2023, IA No. GA/1/2023. 2. The case in brief is that the appellant provides 'open cast mining service' comprising of removal of overburden wherever required and subsequent extraction/mining of coal or uranium for their clients Bharat Coking Coal Limited (BCCL) and Uranium Corporation of India Ltd. (UCIL) and transporting the same from the pit head to storage place/railway siding.....
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....ials required for blasting from the on A/C Bills of the successful tenderer for removal of OB). Lead (9-1 Km) quantity-24,10,700 cub.mtr. 24,10,700 cub.mtr Rs.57.00/cu. M (rupees fifty seven only per cubic metre) Rs. 13,74,09,900 2 Winning/Extraction of Coal from available coal seam at any depth including drilling in heated coal seams, adequate colling (by sufficiency) of blast holes and heated coal seam before charging (of explosives), operation (By Dept) (Blasting will be done by department on cost recovery of Explosives, detonator, fuses and all related material required for Blasting operation from the on A/C Bill of the successful tenderer use of sufficient quantity of water art requisite pressure ect Mechanical Loading of coal in to tippers and transportation to Kankanee siding including Loading coal into wagons (Lead face to siding-4.5Km.) qty-531899 531899 MT Rs. 52.00/- MT (Rupees fifty two only per Metric Ton) Rs. 2,76,58,748 TOTAL Rs.16,50,68,648 TABLE-II UCIL SI No. Description of item Quantity Unit Rate Rs. Ps. Amount Rs. Ps. 01 Excavation per bank cubic meter for Overburden/waste. This will be inclusive of drilling, blasting, excavation, including B....
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....or non-seeking of service tax registration as also for non-payment of any service tax. On the other hand, the department for the said period has issued a Show Cause Notice referred supra demanding Service Tax by way of Site Formation and Clearance, Excavation and Earth Moving and Demolition Service, besides an additional amount which has been dropped by the Learned Commissioner towards Business Auxiliary Services. 6. The Learned Authorized Representative for the Appellant takes us through the Works Order entered with BCCL and UCIL, as noted in Para 4 above, whereby the appellant were called upon for the excavation of coal and uranium ore respectively from the open cast mines besides undertaking ancilliary activities and payment whereof were prescribed therein. The discharge of the said activities, removal of slushy earth and over burden, excavation, blasting, loading, unloading and transportation of the overburden to the designated area are an integral part of the contractual agreement as well as any mining activity. The removal of over burden in a mining operation is a continuous process and is an imperative for the extraction/excavation of the mineral resources or the ore. The d....
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....ng & Engineering Pvt. Ltd. Vs. CCE & C&S-BBSR-I [2017 (49) STR-289 (T). The co-ordinate bench of the Tribunal while deciding an identical Question of law in a case where department wanted to levy tax by way of Site Preparation, observed:- 5. It is observed from the above clauses of the contract that appellant has to do site preparation, making holes for blasting, excavation of rejects; comprising of laterite, laterised Hard ore, Shale, Flaky Friable and incidental Hard Ore; and transportation of the same to the designated dump yard. Under the heading 'Scope of the work' while handling of Mixed ore/Hard ore, encountered during the course of excavation, appellant is required to make free the ore from contamination, like laterite/soil/waste and other inferior materials. The quality of ore so produced by the appellant is required to be certified by company's representative before the same is transported to the stockyard for crushing. From these clauses of the contract appellant is required to handle both the waste material (overburden) and the ore excavated during blasting. Clause 2(f) of this contract also talks of transporting Hard Sponge Ore boulders to the crusher. Clause 4 of th....
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....ng of minerals continue successively in sequence and removal of overburden will necessarily have to proceed excavation and extraction of minerals. Since the two activities have to co-exist, in the case of mining service when there is a composite contract, introduction of the concept of site preparation does not therefore arise. 11. It can be nobody's case that Open Cast Mining working could not be a mining activity. It would thus be appropriate to invite attention to the definition of the mines under the Mines Act, 952. Thus section 2(j) of the Mines Act defines "Mine' as under:- "Mine means any excavation where any operation for the purpose of searching for or obtaining minerals has been or is being carried on an includes- (i) ..................... (ii) ................... (iii) ........................... (iv) All open cast working (v) ..................................... C;aise (kk) of Section 2 of the Mines Act, 1952 has defined "open cast working' in the following words:- "open cast working means a quarry, that is to say, an excavation where any operation for the purpose of searchings for or obtaining minerals has been or is being carried on...............
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....posite contract, referred to in earlier paras is an indivisible one and in this context it would be appropriate to invite reference to the Hon'ble apex court's decision in the case of Commissioner of C.Ex. & Cus., Kerala V. Larsen & Toubro Ltd.- 2015 (39) STR 913 SC, wherein while deliberating on the issue of indivisibility of works contract, it distinguished contracts simpliciter and composite works contract in para 24 of its order and had the following to observe:- "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 from the very language of Section 65(105) which defines "taxable service' as "any service provided'. All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. Further, under Section 67, as has been pointed out above, the value of a taxable service is the gross amount charged by the service pro....
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....r clause (b), it shall be classified under the sub-clause which occurs first among the sub-clauses which equally merit consideration'. 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.' [Emphasis supplied] 14.1 To the said ratio are also the decisions of the Tribunal in the case of: (i) Associated Soapstone Distributing Co. Pvt. Ltd. V. Commissioner-2014 (34) S.T.....