2017 (1) TMI 1599 - AT - Service Tax

Classification of services - transportation of coal within the mine - whether to be classified under GTA Services or under the head Mining Services? - Held that - In Arjuna Carriers Pvt. Limited 2014 (11) TMI 1048 - CESTAT NEW DELHI the Tribunal held that service is not classifiable under mining service, as held by the Revenue - the service is rightly classified under GTA Services - appeal allowed - decided in favor of appellant.

Summary

Issues:
Service tax liability on transportation charges under "mining services" category.

Analysis:
The case involved three appeals concerning the service tax liability of the appellants for services provided under agreements with M/s. South Eastern Coal Fields Limited (SECFL). The agreements included loading coal into tipper trucks and transporting coal within the mining area. The appellants had been paying service tax under "mining services" for loading charges but disputed the tax liability on transportation charges. The Revenue demanded service tax on transportation charges under the "mining services" category and imposed penalties under various sections of the Finance Act, 1994.

The appellants argued that the transportation of coal within the mine should be taxed under Goods Transport Agency (GTA) services. They pointed out that SECFL had already paid service tax on transportation charges under reverse charge basis as per the Service Tax Rules, 1994. The appellants referenced a Tribunal decision in a similar case involving transportation of coal, where it was held that such services fall under GTA services. The Revenue disagreed with this interpretation.

After hearing both sides and reviewing the records, the Tribunal noted that similar issues had been decided in favor of service providers in cases involving SECFL contracts. The Tribunal referred to a previous case where it was held that transportation of coal is not classified as mining service but as GTA service. Citing another recent decision, the Tribunal reaffirmed that transport of coal from pit head to railway siding should be classified as GTA service, not mining service. Based on these precedents, the Tribunal found no merit in the Revenue's arguments, set aside the impugned orders, and allowed the appeals.

In conclusion, the Tribunal ruled in favor of the appellants, holding that transportation charges for coal within the mining area should be classified under GTA services, not mining services, based on previous decisions and settled law on identical facts.