TaxTMI 
TaxTMI 
2026 (3) TMI 748
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....Books of Accounts of the appellant by the Internal Audit Wing of Central Excise, Customs & Service Tax, Bhubaneswar-II Commissionerate, Bhubaneswar, it was noticed that the appellant has undertaken the work of transportation of overburdens, rejects and shifting of screened materials to crushers within the mines area. The Audit officers were of the view that the activities undertaken by the appellant were liable to Service Tax under the category of 'Mining Service'. As the appellant had not paid Service Tax under the category of 'Mining Service', a show cause notice bearing C.No. V(15)20/S.Tax/Adjn/B-II/2013/17648-51A dated 18.10.2013, was issued to the appellant demanding Service Tax of Rs.66,32,351/- (including Cesses), along with interest and various penalties. 1.2. The said Notice was adjudicated by the Ld. Commissioner, Central Excise, Customs & Service Tax, Bhubaneswar-II Commissionerate, Central Revenue Building, Rajaswa Vihar, Bhubaneswar - 751 007, Odisha, vide Order-in-Original No. BSR-EXCUS002-COM-020-15-16 dated 23.03.2016 (hereinafter referred to as the "impugned order"), wherein the Ld. Commissioner has confirmed the demand of Service Tax, as propose....
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....not sustainable on merits. 3. The appellant has further taken the ground that the demand is not sustainable on account of limitation also. The appellant pointed out that the Service Tax Audit for the period 2006-07 and 2007-08, was undertaken by the officers on the following dates: Period Date of issuance of notice for conduct of Audit Date of FSAR 2006-07 16.01.2008 24.07.2008 2007-08 09.02.2009 11.08.2009 3.1. It is also stated by the appellant that pursuant to the Audit for the period 2006-07 and 2007-08, the audit officers had accepted the claim of the appellant that the services rendered by them were appropriately classifiable under the category of "Transportation of Goods"; no objection was raised by the audit officers on the exemption claimed by the appellant from payment of service tax on the transportation services; subsequently, audits were conducted for 2008-09 and 2009-10; that during the course of this audit, the officers questioned the exemption claimed by the appellant under the category of "Transportation of Goods by Road" on the allegation that the said services are appropriately classifiable under the category of 'Mining Servic....
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.... the impugned order. He thus prayed for rejection of the instant appeal. 5. Heard both sides and perused the appeal records. 6. We observe that in the present case the appellant has undertaken the work of transportation of overburdens, rejects and shifting of screened materials to crushers within the mines area. The claim of the appellant is that the said services undertaken by them are appropriately classifiable as Transportation of goods by Road Service. In order to ascertain the nature of work undertaken by them, we have gone through the Work Orders received by the appellant. For ready reference, relevant portions of some of the Work Orders received by the appellant are extracted below: - A. Work Order for Transportation of Iron ore at our Jaribahal Iron Mines vide Work Order No. PMPL/SP/LMPL/447 dated 17th June, 2008. 1. Description of Work You will transport Iron ore in the Mines. 2. **************** 3. Transportation: a) ************** b) Challans for each trip has to be properly issued and produced as and when required by us. 4. Your trucks carrying Screened ore shall be weighed in our PMP Road Wei....
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....50/-. As the gross amount charged by them on an individual consignment in a goods carriage did not exceed Rs.750/-, the appellant is eligible for the benefit of the Notification No. 34/2004 ST dated 03.12.2004. Accordingly, we find that there is no Service Tax liability on the appellant on the transportation services rendered by them. 6.3. We find that a similar issue has been decided by the Hon'ble Apex Court in the case of Commissioner of Central Excise and Service Tax, Raipur Vs. Singh Transporters, reported in (2017) 63 GST Page340(SC)=2017 (4) G.S.T.L. 3 (S.C.). The relevant portion of the said decision reads as under: - "5. Be that as it may, even if the relied upon judgment in the case of Arjuna Carriers (supra) is of no consequence to the present case, we are of the view that the activity undertaken by the Respondent i.e. transportation of coal from the pit-heads to the railway sidings within the mining areas is more appropriately classifiable Under Section 65(105)(zzp) of the Act, namely, under the head "transport of goods by road service" and does not involve any service in relation to "mining of mineral, oil or gas" as provided by Section 65(105) (zzzy) o....
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.... Brothers and claimed exemption under Notification No. 34/2004-ST dated 03.12.2004, as the value of Transportation bill was less than Rs. 750/- We find that the Appellant has rendered the service of transportation only. In respect of transportation service, the liability to pay service tax, if any, is on the service recipient i.e. M/s Shah Brothers under reverse charge mechanism. Thus, we find that the demand of service tax made from the Appellant is not sustainable. Further, we find that the demand has been confirmed under the taxable category "Mining Services" as defined under section 65(105)(zzzy) of the Finance Act, 1994 which reads as under: (zzzy) to any person, by any other person in relation to mining of mineral, oil or gas; 12.2. We find that the Appellant has not undertaken any mining activity as defined in section 65(105)(zzzy) of the Finance Act. The services provided by the Appellant were limited to transportation of excavated iron ore/overburden from one place to another place in and outside the Karampada iron ore mines. We are of the view that such activity is in the nature of transportation work and not mining activity. In support of this view, we ....
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....ribunal, Kolkata] - CST-I vs. M/s Tycoon Industries Private Limited [2022 (8) TMI 281]- Tribunal Kolkata - CCGST vs. M/s Baghel Brothers [2023 (4) TMI 1022] - Tribunal Kolkata 12.6. Thus, by relying on the ratios of the decisions cited supra, we hold that the demand of service tax confirmed under the category of 'Mining Service is not sustainable and hence we set aside the same." [Emphasis supplied] 6.5. Thus, in view of the above discussion and by relying on the ratio of the decisions cited supra, we hold that the demand of Service Tax confirmed in the impugned order under the category of 'Mining Service' is not sustainable on merits and hence, we set aside the same. 7. We have also considered the contention of the appellant as to the demand confirmed in the impugned order being unsustainable on the ground of limitation also. We find that the earlier Service Tax Audit of the appellant was conducted for the period 2006-07 and 2007-08. Pursuant to the Audit for the period 2006-07 and 2007-08, the audit officers had accepted the claim of the appellant that the services rendered by the appellant were appropriately classifiable under the ....