TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 928
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....d 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 to as 'amounts') in terms of mining agreements: i. Roy....
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....s 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(a)(iv) of the Finance Act, 1994.However, with effect from 01-04-2016, all services provided by the government were brought under the service ta....
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....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 Valuation (Determination of Price of Excisable Goods) Rules, 2000 through its job worker. The said fact has also been verified and accepted by the Ld. Adjudicating Authority. B.2 In accordance with....
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....e 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) G.S.T.L. 57] iii. M/s. Calcutta Club Ltd. Versus Commr. of Service Tax-II, Kolkata [2025 (6) TMI 764 - CESTAT KOLKATA] C.4 In any event, it is a settled principle in law that extended period of limitation can be invoked only when the twin conditions of fraud, co....
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....e 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 operations. Further, NMET, also an independent non-profit trust, is established forregional and detailed mineral exploration. D.2.2 In this regard, it is submitted that service tax is payable on a reverse charge basis under Sl. No. 6 of Notification No. 30/2012 dated 20.06.2012, only in cases where service....
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....ning 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 contention of the Department is that since the payment under the agreements were to be made after April 01, 2016, the appellant would be liable to pay service tax. " and thereafter, this Tribunal observed as under: "5. This precise issue came up before a Bench of the Tribunal in M's. Modhya Pradesh State Mining, Corporation Limited v. Principal Commissioner, CGST & Central Excise, Bhopal (M....
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....ed 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, (iii) transport of goods or passengers, or (iv) Support services, other than services covered under clauses (1) to (1) above, provided to business entities" 18. Thus, prior to 1-4-2016, barring a few exceptions, all services provided by the Government were covered under the negative list and accordingly, not subjected to service tax. 19. With effect from 1-4-2016, however, section 66D (a)(iv) of the Finance Act was amended and 'all services....
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....y 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 shall be taxable 8. The Point of Taxation Rules deal with the date on which payment of service tax has to be made and do not determine whether the service is taxable or not. These Rules, therefore, would not be applicable in the present case. In any view of the matter, the issue is covered by the decision of the Division Bench of the Tribunal in Madhya Pradesh State Mining Corporation 9. It has, therefore, to be held that the order passed by the Commissioner does nor suffer from any illegality so as to call fo....