2014 (12) TMI 963 - AT - Service Tax

Waiver of pre-deposit - Mining Services - transportation of lignite from the mines to the power plant under the GTA services and also for transportation of fly ash - Held that - agreement between two parties for the mining and transportation as individual expenses can not be considered to be falling under one heading i.e. Mining Services . This is our prima-facie view. This our prima-facie view is fortified by the decision of the Tribunal in the case of R.K. Transport Company (2012 (3) TMI 271 - CESTAT, NEW DELHI). On perusal of the circular which has been relied upon by the adjudicating authority, we also find that the said circular specifically talks about vivisection of the contract for the purposes of charging under the of Cargo Handling Services and Transportation Services - appellant has made out a prima-facie case for the waiver of pre-deposit of the amounts involved. Accordingly, application for the waiver of pre-deposit of the amounts involved is allowed and recovery thereof stayed till the disposal of the appeal. - Stay granted.

Summary

Issues: Stay petition for waiver of pre-deposit of service tax liability under 'Mining Services' contract with GMDC Limited.

Analysis:
The appellant filed a stay petition seeking the waiver of pre-deposit of service tax liability amounting to Rs. 64,09,562/-, along with interest and penalties imposed. The adjudicating authority upheld the demand, stating that the appellant failed to discharge the differential service tax liability under the 'Mining Services' despite being registered with the department. The appellant argued that the objection was raised by the audit section during the audit of records for a specific period and contended that the activities of transportation of lignite and fly ash were billed separately under GTA services, not falling under 'Mining Services'. The appellant cited a similar case to support their argument (Para 3).

The departmental representative countered, stating that the contract with GMDC Limited was a single contract without any bifurcation of amounts, and even if billed separately, the appellant should be charged under 'Mining Services'. The representative highlighted the absence of a contract indicating separate transportation costs (Para 4).

Upon review of submissions and records, it was found that the contract involved excavation, loading of lignite, transportation, loading, and unloading from the power plant. While the service tax liability for excavation was discharged, a dispute arose regarding whether transportation activities fell under 'Mining Services'. The adjudicating authority noted that GMDC Limited permitted separate invoices for various activities, indicating a distinction between mining and transportation. The Tribunal opined that expenses for mining and transportation as individual items could not be categorized under a single heading of 'Mining Services', supported by a previous decision and relevant circular (Para 5-6).

Consequently, the Tribunal held that the appellant established a prima facie case for the waiver of pre-deposit amounts. The application for waiver was granted, and recovery of the amounts stayed pending the appeal's disposal (Para 7).