2015 (1) TMI 1284 - AT - Service Tax

Waiver of pre-deposit - Demand of Service tax - Mining Service - Transportation of coal from coal quarries/faces/bunkers/surface, etc., to various railway siding/dumps/stock yards, etc., within the mining areas - Appellant contended that the service clearly falls in the scope of GTA service and the service recipient, is paying service tax accordingly under reverse charge mechanism - Held that - prima facie the activity would fall under the scope of GTA and not under the scope of mining service. The fact that the service recipient, namely, SECL, has already deposited the service tax for this service under GTA service under reverse charge mechanism further strengthens the contention of the appellants. Indeed prima facie the C.B.E. & C. Circular No. 232/2/2006-CX-4, dated 12-11-2007 did not consider the impugned service to be mining service. - Waiver granted

Summary

Issues:
1. Whether the transportation of coal activity falls under mining service or GTA service.
2. Whether the appellants are liable to pay service tax for the transportation of coal.

Analysis:
1. The appellants entered into agreements for the transportation of coal within mining areas. The issue was whether this activity constituted mining service or GTA service. The Tribunal observed that the agreements were primarily for transporting coal after extraction, indicating a GTA service nature. The service recipient had already paid service tax under reverse charge mechanism for GTA service, supporting the appellants' contention. The C.B.E. & C. Circular also classified such activities as post-mining activities chargeable under Cargo Handling Service or Goods Transport by Road, not mining services. This analysis favored the appellants' argument that the activity was not mining service.

2. Considering the above analysis, the Tribunal found that the appellants had a strong case for waiver of pre-deposit. The Tribunal acknowledged that the transportation of coal activity was more aligned with GTA service based on the agreements and the payment of service tax by the service recipient. Consequently, the Tribunal ordered the stay of recovery of the disputed liabilities during the appeal process. This decision was based on the understanding that the appellants had sufficiently demonstrated that the transportation activity did not fall under the category of mining service, justifying the waiver of pre-deposit and the stay of recovery of liabilities.

This detailed analysis of the judgment highlights the key issues of whether the transportation of coal activity constituted mining service or GTA service and the Tribunal's decision to grant a waiver of pre-deposit based on the nature of the service and the payment of service tax by the service recipient.