2017 (1) TMI 1605 - AT - Service Tax

Classification of services - transportation charges received by the appellants from SECFL for transportation of coal from coal face to railway siding/ yard within mining area - whether classified under the head GTA Services or under the head Mining services? - Held that - The GTA Service received by SECFL was subjected to tax at the recipient end. Declaration along with details of payment of such tax by SECFL has been placed on record - Reliance was placed in the case of M/S. ARJUNA CARRIERS PVT. LTD. VERSUS C.S.T., RAIPUR 2014 (11) TMI 1048 - CESTAT NEW DELHI , where it was held that Mere handling of coal and movement of said goods from railway wagon to the site of thermal power station through the motor vehicle or any other means of transportation involved in such handling would not constitute Cargo Handling Service and will be considered as GTA services - appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of service tax liability on transportation of coal from coal face to railway yard under Mining Services or GTA Services.

Analysis:
The judgment by the Appellate Tribunal CESTAT NEW DELHI involved three appeals dealing with the service tax liability on the transportation of coal in the mining area. The appellants provided services of loading and transportation of coal for M/s. South Eastern Coal Field Limited (SECFL) and had entered into agreements with SECFL for these services. The dispute revolved around whether the transportation charges received by the appellants from SECFL should be taxed under Mining Services or GTA Services. The appellants argued that SECFL had discharged service tax on a reverse charge basis for GTA Services, while the Revenue sought to recover service tax under Mining Services.

The Tribunal considered previous decisions involving similar agreements with SECFL and found that the transportation of coal should be taxed under GTA Services, not Mining Services. The Tribunal referenced cases like Arjuna Carriers Pvt. Ltd vs. CST Raipur and VN Transport vs. CCE Raipur, where it was held that the Revenue's stance on taxing such services under Mining Services was unfounded. The Tribunal noted that SECFL had paid tax on the GTA Services received, and based on the established legal position from previous decisions, the impugned orders were deemed legally unsustainable. Consequently, the Tribunal set aside the impugned orders and allowed the appeals in favor of the appellants.

The judgment emphasized the importance of confirming the similarity of contracts in previous decisions and the present case. The Tribunal's decision was based on the settled legal position from previous cases, where it was consistently held that transportation of coal should be taxed under GTA Services, not Mining Services. The judgment highlighted the necessity for the Revenue to ensure the accuracy of its classification of services and confirmed that SECFL had paid tax on the GTA Services received. Overall, the Tribunal's ruling favored the appellants, setting aside the impugned orders and allowing the appeals based on the established legal position regarding the tax liability on transportation services in the mining sector.