2014 (12) TMI 1007 - AT - Service Tax

Waiver of pre deposit - transportation of iron ore from top to bottom and from one plot to another plot in the mining area - Held that - Prima facie appellant has made out a case for waiver and in our opinion, the activity cannot be considered as a mining service. When the activity is undertaken in the mining area and it has to be treated as mining work only and he relies on Mining Act as done by the adjudicating authority. It is appropriate that in this case the requirement of predeposit is waived and stay is granted for 180 days from the date of this order and we do so - Stay granted.

Summary

Issues:
1. Whether the appellant is providing mining service?
2. Whether the transportation activity conducted by the appellant can be considered as a mining service?
3. Whether the demand raised against the appellant for providing mining service is justified?

Analysis:
1. The appellant argued that they were acting as a sub-contractor providing transportation services related to iron ore within the mining area, from mine head to stockyard, and between different plots. The appellant contended that the amount paid for the services was below the threshold for levying tax under the category of Goods Transport Agency (GTA) service, and they were not providing mining services directly.

2. The appellant relied on a circular stating that transportation activities within the mine and to outside locations are post-mining activities and should not be taxed under mining services. They also cited a previous court decision to support their argument that services must have a direct relation to the subject matter of the taxing entry to be considered taxable. The Tribunal found that the transportation activity conducted by the appellant did not fall under the definition of mining service as per the circular and legal precedent.

3. The Tribunal considered the arguments presented by the appellant and the Additional Commissioner. Despite the detailed submissions made by the Commissioner, the Tribunal focused on whether the appellant had a prima facie case in their favor. The Tribunal concluded that the appellant had made a case for waiver, as the transportation activity did not qualify as a mining service. As a result, the Tribunal waived the requirement of pre-deposit and granted a stay on the demand for 180 days from the date of the order. The decision was pronounced in open court.

This judgment highlights the importance of interpreting the scope of taxable services accurately based on legal provisions and precedents, ensuring that activities are correctly categorized for tax purposes.