TaxTMI 
TaxTMI 
2025 (7) TMI 928
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....l Mine (hereinafter referred to as 'mine'), conducted by the Ministry of Coal, Government of India under the Coal Mines (Special Provisions) Act, 2015 (hereinafter referred to as 'Coal Mines Act'). Having emerged as the successful bidder, the Appellant entered into a Coal Mine Development and Production Agreement (CMDPA) dated 02-03-2015 with the President of India, paving way for the grant of mining lease by the Government of West Bengal (hereinafter referred to as 'Govt of WB'). In accordance with Sections 8(8) and 8(10) of the Coal Mines Act, the mining lease was deemed to be effective from 22-04-2015, as confirmed vide by a letter dated 22-04-2015 issued by the Govt. of WB and subsequently formalized through the execution of a Mining Lease Deed on 04-11-2015(mining lease). As per clause 9 of Part IX of the mining lease, the terms and conditions under the CMDPA were incorporated in the mining lease as a part and parcel thereof. The CMDPA and the mining lease are hereinafter collectively referred to as 'mining agreements'. 4.3. By reason of grant of mining rights, the Appellant was required to make payments of the following amounts(hereinafter collectively referred....
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.... 4.7 .The Appellant duly submitted its reply to the show cause notice, raising various alternate grounds in support of its contentions. However, disregarding the Appellant's submissions, the Commissioner of Central Tax (hereinafter referred to as 'Ld. Adjudicating Authority'), vide the Order-in-Original bearing No.30/Commr./CGST & CX/KOL-NORTH/2022-23 dated 16-03-2023 (hereinafter referred to as 'impugned order'), confirmed-the demands raised in the notice. 4.8. Hence the Instant Appeal." 3. Ld. Counsel for the appellants submits as under: "Contentions of the Appellant The Appellant challenges the demands confirmed in the impugned order both on merits and limitation on the following grounds, which are in the alternative and without prejudice to one another. A. Issue involved herein as regards taxability of amounts paid made under the mining lease executed prior to the introduction of levy w.e.f. 01-04-2016 is no more res integra and stands concluded. A.1 It is humbly submitted that prior to 01-04-2016, only "support services" provided by Government or a local authority was taxable in terms of Section 66D....
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....case of Shrawan Kumar Pathak (supra), has already taken a view that no service tax liability arises on DMF and NMET payments made in terms of the mining lease assigned prior to 01-04-2016. A.5 In light of the above cited judicial precedents, the Appellant cannot be held liable to discharge service tax on the said amounts. B. Without prejudice to the above, the amounts with respect to which service tax is sought to be recovered in these proceedings have suffered excise duty as part of cost of production of coal raised. Consequently, the same cannot be subjected to service tax in view of Section 66D(f) of the Finance Act, 1994. B.1 The activity of extraction of coal from the mine is construed as production of excisable goods and is subject to excise duty under Section 3 of the Central Excise Act, 1944.Since the amounts paid to the Govt of WB were directly attributable to the activity of raising of coal, these payments were being included in arriving at the cost of production of coal. The Appellant had duly discharged excise duty on the coal produced and captively consumed in accordance with the provisions of Rule 8 read with Rule 11 of the Central Excise Va....
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....nder the administrative control of the Central Board of Indirect Taxes and Customs. In view of the above, it is submitted that the grant of the mining lease and the associated payment of excise duty on the relevant amounts were well within the knowledge of the department, thereby rendering the allegation of suppression completely untenable. C.3 Moreover, the Appellant was and is under bonafide belief that the amounts paid are not exigible to Service Tax and hence the same was neither disclosed in the ST-3 returns of the Appellant nor service tax was paid thereon. Further, the Appellant submits that it being a public company, the financials of the Appellant are publicly available documents wherein the details pertaining to the grant of the mining rights had been duly disclosed and hence the grounds for material suppression of facts cannot be taken by the Department to invoke extended period of limitation. Reliance in this regard is placed on the following judgements: i. C.S.T., New Delhi Vs Kamal Lalwani [2017 (49) S.T.R. 552 (Tri. - Del.)] ii. Mega Trends Advertising Limited Vs. Commissioner of Central Excise and Service Tax, Lucknow [2020 (38....
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.... 5 and 6). The Mines Health Board also qualifies as a Governmental Authority as defined under para 2(s) of the Notification No. 25/2012 dated 2006-2012. Accordingly, in light of Sl. No. 39 of the said Notification, the services provided by the AMBH are exempt from the levy of service tax. Consequently, the demand of service tax on AMBH fees, amounting to Rs. 4,81,899/-, is wholly unfounded and unsustainable. However, the Ld. Adjudicating Authority has not even dealt with the said contention despite having been specifically adverted to. D.1.3 Without prejudice to the above, the Mines Board of Health does not qualify as Government or a Local Authority under service tax law and therefore, services provided by AMBH is outside the scope of Notification No. 30/2012-ST, making the reverse charge provisions inapplicable. D.2 The contributions to DMF and NMET, being non-profit trusts, by the Appellant cannot be subjected to service tax under reverse charge basis. D.2.1 Without prejudice to the above, it is respectively submitted that DMF is a notified independent non-profit trust, established for benefit and interest of the people affected due to mining oper....
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....llant has got the transfer of mining lease from the department of Commerce and Industries Mining Branch, Government of West Bengal, Kolkata on 22nd April, 2015. 8. For better appreciation of the fact the said order of transfer of mining lease is extracted here below: 9. That facts are not in dispute therefore, issue arises that as mining lease documents has been executed prior to 01.04.2016, whether the appellant is liable to pay Service Tax or not? 10. The said issue has been examined by this Tribunal in the case of Principal Commissioner, CGST & Central Excise versus S.R. Traders reported in (2023) 9 Centax 407 (Tri.-Del) wherein in that case the Tribunal frame the following issue: " 2. The issue involved in this appeal is regarding non-payment of service tax on the amount paid to the Government or a local authority towards periodical charges for assignment of right to use of natural resource or quarry sand from the allotted mines for the period April, 2016 to January, 2017" and this Tribunal recorded as under: "4. Though the agreements were entered prior to April 01, 2016 in the present case, the contenti....
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....f levying service tax, the taxable event is construed as the time when the service is provided or agreed to be provided. Thus, in order to determine whether levy of tax is applicable on a particular activity, it is necessary to determine the point of time when such activity is provided or agreed to be provided. In the present case, the agreement between the appellant and State Government for grant of mining rights was executed on 2-1-2016 and on this date, the transactions involving) assignment of right to use natural resource was not taxable. 17. In this connection section 66D of the Finance Act, as it existed prior to 1-4-2016, can be referred to and it is as follows: "66D The negative list shall comprise of the following services, namely:- (a) services by Government or a local authority excluding the following services to the extent they are not covered elsewhere- (1) services by the Department of Posts by way of speed post, express parcel post, life insurance and agency services provided to a person other than Government, (ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport, ....
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....le periodically) made on & after 1-4-2016." 7. This ground has been taken in view of rule 7 of the Point of Taxation Rules 2011, which is evident from the Circular dated April 13, 2016 issued by the CBEC. The relevant portion of the Circular is reproduced below: 9 Whether Service Tax is payable on yearly installments due after 1-4-2016 in respect of spectrum assigned before 1-4-2016 Service Tax is payable on such installments in view of rule 7 of point of Taxation Rules, 2011 as amended by vide Notification No. 24/2016-S.T., dated 13-4-2016. However, the same have been after 1-4-2016 in specifically exempted vide Notification No. 25/2012-5.T, dated 20-6-2012 as amended by on Notification No. 22/2016-S.T., dated 13-4-2016 [Entry 61 refers). The exemption shall apply only to Service Tax payable on one time charge, payable in full upfront or in installments, for assignment of right to use any natural resource and not to any periodic payment required to be made by the assignee, such as Spectrum User Charges, license fee in respect of spectrum, or monthly payments with respect to the coal extracted from the coal mine or royalty payable on extracted coal which sha....
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....NCH 4, ABANINDRANATH TAGORE SARANI KOLKATA 700 016 Memo. No.307- SC/C&I/O/MIN/GEN-COL/01/2015 Dated, Kolkata the 22"" April, 2015 To Shri Prabir Kumar Mitra, Chief Legal Advisor & Constituted Attorney, CESC Limited, CESC House, Chowringhee Square, Kolkata .- 700001 Sub : Transfer of Mining Lease for sarisatoffi Coal Mine in favour of The CESC Limited, the successful bidder of Coal Mine. Ref : : Your letter no. CLA-0595 dated 28.03.2015 Kindly refer to the captioned subject. In this regard, I am directed to refer to provisions of The Coal Mines (Special Provisions) Act. 2015 under section 8 (10) where it is mentioned that the successful bidder is deemed to have been granted a Mining Lease till the execution of the Mining Lease in terms of section 8(8) of the Act. 3) It may kindly be noted that your application for transfer of Mining Lease (as per details below) is hereby considered and Mining Lease for 1641.26 acres is deemed to be granted in favour of the CESC Ltd in terms of section 8(10) of The Coal Mines (Special Provision) Act, 2015 as per following details: SI.No. Area Date of Execution 1. 40.67 acres 07.12.1998 2 1178.38 acres 08.12.1998 3 ....