2014 (12) TMI 285 - AT - Service Tax

Waiver of pre deposit - Site formation and clearance, excavation and earthmoving and demolition service - Penalties under Sections 76, 77 & 78 - Held that - Contract is either for transportation of minerals or mine to the factory or within the mining area and for hiring tippers, bulldozers, excavators, etc. On going through the contract, we find that in this contract, except for charges for removal of overburden which, in our opinion, is covered by definition of mining service but would not be covered site formation and clearance service , the other amounts on prima facie basis may not be liable for service tax. appellant has made out prima facie case for waiver of pre-deposit on merits. Accordingly, the requirement of pre-deposit of adjudged dues is waived and stay against recovery is granted during pendency of the appeal - Stay granted.

Summary

Issues:
1. Service tax liability for services provided by the appellant.
2. Interpretation of contracts for determining service tax liability.
3. Prima facie case for waiver of pre-deposit.
4. Early hearing application for stay application and appeal.

Analysis:
1. The judgment deals with the service tax liability of the appellant for providing services related to site formation, clearance, excavation, earthmoving, and mining of mineral, oil, or gas. The tax demand of &8377;82,74,346/- with interest has been confirmed, along with penalties under Sections 76, 77, and 78 of the Finance Act, 1994.

2. The appellant's counsel argued that the services provided were limited to deploying equipment for extraction, excavation, earthmoving, and transportation of minerals within the mining area. The contracts with M/s. English Indian Clays Ltd. were examined, revealing that the services primarily involved transportation of minerals and hiring of equipment like tippers, bulldozers, and excavators. It was noted that charges for removal of overburden could be considered as mining service, while other amounts may not be liable for service tax, especially post-1-4-2007 when overburden removal activity ceased.

3. The Tribunal found that the appellant had made a prima facie case for waiver of pre-deposit based on the contract analysis and the cessation of overburden removal activity post-1-4-2007. Consequently, the requirement of pre-deposit of adjudged dues was waived, and a stay against recovery was granted during the pendency of the appeal.

4. An early hearing application was filed for out-of-turn hearing of the stay application and appeal. However, due to the large number of pending cases before the Tribunal, early hearing of the appeal was not feasible. The application for early hearing of the stay application was disposed of as infructuous. The operative portion of the order was pronounced in open Court.