TaxTMI 
TaxTMI 
2026 (4) TMI 1592
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....iod 16.05.2005 to 31.05.2007 under the category of "Site Formation and Clearance, Excavation and Earthmoving and Demolition Services" as the activities of overburden, excavation, and truck loading of lignite undertaken by the respondent were classifiable as "Mining Services", which were introduced with effect from 01.06.2007 and therefore, were not taxable prior to the said date. 2. The respondent is engaged in providing services to M/s. Rajasthan State Mines and Minerals Ltd. They had not taken any registration with the Service Tax Department before 25.06.2007 as the activities carried out were integrated to mining operations which were not taxable. Subsequently, on 25.06.2007, the respondent took registration as the activities constitu....
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....ndent is excavation of successive, lignite seams exposed after removal of overburden/inter-burden and loading of such ROM lignite into trucks at mines pit. For rendering this mining service, the respondents are paid charges based on PMT of Lignite produced and loaded in the trucks. Their contract and all the bills categorically indicate the rates PMT of Lignite produced and loaded. Their principal and essential activity is extraction of mineral from the ground and their remuneration is linked to such extraction. The respondent had agreed upon rendering service of raising of lignite at RSMM Giri Lignite Mine at Barmer - Rajasthan strictly as per mining drawings and cannot be classified under site formation and clearance, excavation and earth....
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.... 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." 6. The appeal filed by the Department in the above case before the Apex Court was dismissed as withdrawn on account of low monetary effect, and therefore, the law laid down by the Tribunal is binding. 7. We may also consider the decision in the case of Indian National Ship Owners Association versus Union of India [2009(14 )STR 289 (Bom.)] where the High Court held that when ther....
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....s been made taxable from 1.06.2007, such activities being part of mining operations itself, no service tax is leviable on such activities prior to the said date. The relevant provisions of the Instructions are set out below:- "4. Coal cutting or mineral extraction and lifting them up to the pithead: These activities are essential integral processes and are part of mining operations. As stated earlier, mining activity has been made taxable by legislation under the Finance Act, 2007 (w.e.f. 1.6.2007). Prior to this date, such activities, being part of mining operations itself are not subjected to service tax. Therefore, no service tax is leviable on such activities prior to the said date." Further, CBEC Circular No.123/5/....