TaxTMI 
TaxTMI 
2026 (8) TMI 419
X X X X Extracts X X X X
X X X X Extracts X X X X
....s), along with interest and penalties, has been confirmed against the appellant on amounts paid to the Government of Odisha during the period 01.04.2016 to 30.06.2017, under reverse charge mechanism 2. The facts of the case are that, the appellant, a proprietorship concern, is engaged in the mining of Iron Ore pursuant to a mining lease granted by the Government of Odisha under the Mines and Minerals (Development and Regulation) Act, 1957 ("MMDR Act") read with the Mineral Concession Rules, 1960. 2.1. The mining lease (in Form K) in respect of Iron & Manganese Ore over an area of 106.1127 hectares (or 262.21 acres) in village Unchabali under Champua, Sub-Division of Keonjhar District (Cadastral Survey No. 73 G/5), was executed between....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cast upon the recipient of the service on reverse charge basis in terms of Section 68(2) read with Notification No. 30/2012-ST dated 20.06.2012 as amended by Notification No. 18/2016-ST dated 01.03.2016. 6. In this regard, intelligence was received against the Appellant by the officers of the erstwhile DGCEI, Bhubaneswar Regional Unit (now DGGI Bhubaneswar Zonal Unit). In pursuance thereto, a Show Cause Notice No. 40/2018-19 dated 15.02.2019 was issued alleging that the appellant was liable to pay Service tax (inclusive of cesses) of Rs. 27,48,49,879/- under reverse charge on the consideration paid to the Government of Odisha during 01.04.2016 to 30.06.2017, comprising Royalty of Rs. 1,27,18,46,785/-. DMF of Rs. 53,68,23,318/-, NMET of R....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es and not a tax, the observation to the contrary in India Cement being obiter and the issue governed by Kesoram Industries; and • By virtue of Rule 7 of the Point of Taxation Rules, 2011, the point of taxation is the date on which the payment becomes due or is made, and the service being provided throughout the period and not merely on the date of execution of the lease, Service tax is payable on the royalty and other charges paid after 01.04.2016. 8. Aggrieved, the appellant preferred a Writ Petition bearing WP(C) No. 4167/2020 before the Hon'ble High Court of Orissa, which by order dated 18.01.2021 directed the appellant to file an appeal before this Tribunal along with an interlocutory application seeking waiver of p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arge, on the Royalty (and the contributions towards the District Mineral Foundation (DMF) and the National Mineral Exploration Trust (NMET) and User fee) paid by the Appellant to the Government of Odisha during 01.04.2016 to 30.06.2017 for the assignment of the right to use natural resources, where the mining lease in question was executed on 17.11.2009, i.e. long prior to 01.04.2016 - the date on which services rendered by the Government to a business entity first became exigible to Service tax under the Finance Act, 1994, or not ? 7. The said issue has been examined by this Tribunal in the case of National Aluminium Company Ltd. (cited supra), wherein this Tribunal has observed as under : "7. We find that short issue bef....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l in the case of Cement Corporation of India Ltd. (cited supra), has examined and observed as under : "3.2. Regarding the demand of service tax of Rs.13,45,733/- on the royalty amount paid to the State Government on natural resource (limestone) extraction, on reverse charge basis, the Appellant submits that the royalty payments made during the Financial Year 2016-17 was in lieu of mining agreements that were executed prior to 01 April 2016. Prior to 01 April 2016, only "support services" provided by government or a local authority was taxable in terms of Section 66D of the Finance Act, 1994. "Support services" was defined under the Finance Act, 1994 as: "support services" means infrastructural, operational, administrative, logistic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3) 9 Centax 407(Tri. - New Delhi) ................................................................................................... 7. Regarding the demand of service tax of Rs.13,45,733/- on the royalty amount paid to the State Government on natural resource (limestone) extraction, on reverse charge basis, we observe that the services by way of grant of natural resources by the Government became taxable only with effect from 01 April 2016. In the present case, the agreements were executed prior to 01 April 2016 and therefore the provisions of service tax, as applicable prior to the said date would be applicable to determine the leviability of service tax on the royalty payments. It has been settled by a number of decisi....