TaxTMI 
TaxTMI 
2026 (8) TMI 1509
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....e Mines and Mineral (Development and Regulation) Act, 1957 ("MMDR Act") for captive consumption in its manufacturing facility. In terms of Section 9 of the MMDR Act, the Appellant made periodical royalty payments to the State Government in respect of the iron ore extracted from the said mines. 3. Prior to 1 April 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 ("Finance Act") However, with effect from 1 April 2016, all services provided by the Government were brought under the Service Tax net by virtue of amendment to the said provision. 4. Pursuant to an investigation, a Show Cause Notice dated 24.01.2019 was issued to the Appellant demanding service tax on reverse charge basis in terms of Notification 30/2012 ST dated 20 June 2012 (as amended), on the periodical payments (royalty) made to the Government for the period April 2016 to June 2017. It is the case of the Revenue that the said payments were towards the service of assignment by the government of the right to use natural resources which were taxable with effect from 01 April 2016 in the light of the amendment in Section 66D(....
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.... (iii) Similar view has been taken in the judgement rendered by this Tribunal in the case of CESC Limited Vs. Commissioner of Central Tax, CGST & Central Excise, Kolkata (2025 (7) TMI 928 (Tri. Kol)] which has also been accepted by the Department [Refer - Pg. 30/C). Further, similar views have also been taken in the following judgements: a. The Madhya Pradesh State Mining Corporation Limited Vs Principal Commissioner, CGST & Central Excise [2023 (4) TMI 1075 (Tri. New Delhi)] b. Cement Corporation of India Vs Commissioner of CGST, Central Excise, Guwahati [2024 (6) TMI 192 (Tri. - Kolkata)] (iv) The Ld. Adjudicating Authority has relied upon the Point of Taxation Rules in order to determine the applicability of service tax. In this regard, the Hon'ble Tribunal Delhi, in the case of SR Traders (supra) has categorically held that 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]. In any event, the Tribunal at Delhi in the case of Madhya Pradesh State Mining Corporation Limited (supra) has held that for the purpose of levying service tax, the taxable ....
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....e tax would have been available as CENVAT Credit to the Appellant. Suppression and/or intention to evade cannot be alleged when the entire exercise is revenue neutral. Reference is drawn to the decision in M/s. Intellect Design Arena Limited Versus Commissioner of GST and Central Excise, Chennai. 5.1. Accordingly, the Ld. Counsel for the appellant prays for setting aside the impugned order and allowing the appeal, with consequential reliefs. 6. On the other hand, the Ld. Authorized Representative of the Revenue reiterates the findings in the impugned order. 7. Heard the parties and considered their submissions. 8. After considering the submissions made by both the sides, we find that the only issue to be decided in this appeal is: whether periodic royalty payments made to the Government of Jharkhand after 01 April 2016 could be taxed under reverse charge provisions, when the underlying service/activity of assignment of right to use natural resources (in the instant case, iron ore) was rendered prior to the introduction of the levy with effect from 01 April 2016, or not. 9. We find that the issue is no longer res integra as the same has already been settled by way of ....
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....fter April 01, 2016, the appellant would be liable to pay service tax. 5. This precise issue came up before a Bench of the Tribunal in M/s. Madhya Pradesh State Mining, Corporation Limited v. Principal Commissioner, CGST & Central Excise, Bhopal (M.P.) 2023 (4) TMI 1075-CESTAT New Delhi (2023) 10 Centax 253 (Tri. Del.). In regard to short payment of service tax on dead rent paid by the appellant to the State Government, which was taxable on a reverse charge basis against the receipt of services concerning grant of mining rights, the Bench held that for the purposes of levying service tax, the taxable event is construed at the time the service is provided or agreed to be provided. Therefore, in order to determine whether levy of services 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 and since the agreements between the appellant and the State Government regarding grant of mining right were executed prior to April 01, 2016, on which date the transaction in mining of right to use natural resources became taxable, the appellant would not be liable to pay the service tax. The re....
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....ded 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 provided by the government to a business entity were excluded from the negative list of services. Thus, services rendered by the government to a business entity became chargeable to service tax with effect from 1-4-2016. 20. In the present case, the appellant received services in relation to assignment of right to use natural resources from the State Government by virtue of the agreement dated 2-1-2016 and, therefore, the provisions of service tax, as were in force prior to 1-42016, would be applicable. Grant of natural resources was not excluded from the scope of negative list prior to 1-4-2016 and so no tax implication can be fastened on the appellant for such period." . . . 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 ....