2013 (12) TMI 1121 - AT - Service Tax

Waiver of pre deposit - Demand of service tax - Site formation and clearance excavation and earth moving and demolition services - Held that - From perusal of the appellant s agreement with Rajasthan State Mines and Minerals Ltd. and Aravali FCI, Bikaner, it appears that their contract is essentially for mining of the gypsum and other activities - removal of overburden, loading of gypsum in trucks and levelling of mine/area, maintenance of the ramps and/or access roads, etc., are ancillary or incidental to the main area of the mining - requirement of pre-deposit of service tax demand, interest and penalty is waived for hearing of these appeals and recovery thereof is stayed till the disposal of the appeals - Following decision of M. Ramakrishna Reddy, Civil Contractors v. CCE & C, Tirupathi 2008 (10) TMI 115 - CESTAT, BANGALORE and CCE, Hyderabad v. Vijay Leasing Company 2010 (12) TMI 782 - CESTAT, BANGALORE - Stay granted.

Summary

Issues:
Classification of services for taxation - Cargo handling service vs. site formation and clearance excavation services.

Analysis:
The appellants provided various services to Rajasthan State Mines and Minerals Ltd., including removal of overburden, excavation of gypsum, construction of access roads, and maintenance of mine approach roads. The department contended that these activities were taxable differently before and after 16-6-2005. The original Adjudicating Authority confirmed Service Tax demands against the appellants, along with interest and penalties. The Commissioner (Appeals) upheld the tax demands, interest, and penalties from 16-6-2005 onwards. Appeals were filed against these orders.

The appellant argued that their activities should be classified as mining services, which became taxable from 1-6-2007. They cited precedents where similar activities were considered mining services. The appellant requested a waiver of pre-deposit of Service Tax demands, interest, and penalties until the disposal of the appeals. The Senior Departmental Representative opposed the stay application, maintaining that the activities were correctly classified as "site formation and demolition services" taxable from 16-6-2005. Citing relevant circulars and precedents, the representative argued against a total waiver of the demands.

After considering the submissions and perusing the records, the Tribunal noted that the appellants' contract primarily involved mining activities, with ancillary services like overburden removal and road maintenance. Consistent with previous Tribunal decisions, the Tribunal agreed that the activities were akin to mining services. Consequently, the requirement of pre-deposit of service tax demand, interest, and penalty was waived for the hearing of the appeals, and recovery was stayed pending appeal disposal. The stay applications were allowed.