TaxTMI 
TaxTMI 
2024 (7) TMI 1313
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....087/-. He has also refrained from imposing penalty under Sections 76, 77 and 78 of the Finance Act, 1994. 2. Brief facts of the case are that the Respondent, M/s. Jay Bee Energy (P) Limited, Sundarpur, R.G.B. Road, Guwahati - 781 024 were providing services related to oil exploration to M/s. Oil India Limited, Duliajan (hereinafter referred to as 'OIL') and M/s. ONGC Limited, Sibsagar (hereinafter referred to as 'ONGC'). The respondent had entered into agreements with M/s. OIL and M/s. ONGC to carry out works for drilling operations of wells in oil fields in the state of Assam and Arunachal Pradesh. In addition to their drilling operations, they had to carry out other associated works like rig up/rig down including erection, operation an....
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....ion services" for the period prior to 01.06.2007. He has also not imposed penalties under Sections 76, 77 and 78 of the Finance Act, 1994. Aggrieved against the dropping of the demand and non-imposition of penalties, the Department has filed this appeal. 5.1. In their grounds-of-appeal, the Department has referred to the C.B.E.C. Circular in F.No. 232/2/2006-CX.4 dated 12.11.2007 wherein it was clarified that excavation, drilling and removal of overburdens are in the nature of site formation, clearance, excavation and earth moving and hence liable to service tax under the category of "site formation and clearance, excavation and earth moving and demolition services". Relying on the above said Circular, the Revenue contended that the serv....
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....d under the category of "mining Services" for the period from 01.06.2007 to 30.09.2008. Accordingly, the Revenue contended that dropping of the demand of service tax by the adjudicating authority for the period prior to 01.06.2007 is legally not tenable. 6. The Respondent submits that they have undertaken the activity of 'mining' and taken registration on 11.06.2008. They submit that they started paying Service Tax under the category of "mining service" for the same service after taking registration and the Department has not objected to the payment of Service Tax under the aforesaid category of "mining service". Accordingly, they submit that for the period prior to 01.06.2007, the activities undertaken by them are not liable to ....
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....d above specifically mentioned that the services of site preparation (Levelling of well site, mud pit approach, hard standing, timber skids for placement) would be provided by OIL. In view of such specific quotation in the Work Orders I hold the view that under no stretch of imagination it can be held that the noticee provided taxable service under the category of "site formation and clearance, excavation and earthmoving and demolition services" to OIL. As regards the Work Orders mentioned at sl. no. 1 and 9 of the details I find that the contract specified that it was for operation and maintenance and the noticee was to provide man management service to carry out work over operation of oil and gas wells of OIL and they were responsible for....
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....n and earthmoving and demolition services". As per the Work Order detailed at sl. no. 10 of the table, I find that the noticee was to undertake stimulation jobs and sand control operations on normal and sour wells or any other jobs assigned by ONGC by utilising truck mounted acid pumpers provided by ONGC and they were primarily responsible for operation and maintenance. From the copy of the contract I do not find that the jobs detailed therein can be considered as related to development or preparation services for drilling or extraction of minerals and accordingly these services too can not be held to be taxable under the category of "site formation and clearance, excavation and earthmoving and demolition services". I also find from the Wor....
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.... recovery ofRs. 1,97,60,087.00 is not tenable." 8.1. We observe that the ld. adjudicating authority has given a well-reasoned finding to arrive at the conclusion that the Respondent is not liable for payment of service tax under the category of "site formation and clearance, excavation and earth moving and demolition services", for the period prior to 01.06.2007. Accordingly, we do not find any infirmity in the impugned order passed by the ld. adjudicating authority in dropping the demand of service tax for the period prior to 01.06.2007. We observe that the Respondent has started paying Service Tax under the category of 'mining service', for the same service, after taking registration on 11.06.2008 and the Revenue has accepted t....