2016 (9) TMI 1023 - AT - Service Tax

Classification and Taxability - mining service - service provided by the appellants for transportation of goods within the mining area - Held that - the issue involved in this case is squarely covered by the decision of the Tribunal in the case of Arjuna Carriers Pvt. Ltd. Vs. CST, Raipur 2014 (11) TMI 1048 - CESTAT NEW DELHI wherein it has been held that mere handling of coal and movement of the same through the motor vehicles or any other means of transport would not constitute mining service for the purpose of levy of service tax. Therefore, the impugned service is not classifiable as mining service. - Decided in favour of appellant

Summary

Issues:
1. Confirmation of service tax demands for loading/unloading and transportation of coal within mining areas.
2. Classification of the service provided by the appellants under the category of "mining service" for service tax liability.

Issue 1: Confirmation of service tax demands
The appellants filed appeals against the orders confirming service tax demands totaling amounts of &8377; 99,67,511/-, &8377; 1,25,19,002/-, and &8377; 60,00,588/- for activities related to loading/unloading and transportation of coal within mining areas. The grounds for confirming these demands were that the activities undertaken by the appellants for M/s. South Eastern Coal Fields (SECL) were considered as "mining service" subject to service tax liability.

Issue 2: Classification of service under "mining service"
The advocate for the appellants argued that the handling of coal within the mining area, as per the work order from M/s. SECL, does not fall under the definition of "mining service" for service tax payment. Reference was made to a previous Tribunal decision in the case of Arjuna Carriers Pvt. Ltd. Vs. CST, Raipur, supporting the view that the activity does not qualify as mining service. It was also highlighted that M/s. SECL had already discharged service tax liability under the category of Goods Transport Agency (GTA) service as the recipient of the service.

Upon hearing both sides and examining the case records, the Tribunal addressed the central question of whether the service provided by the appellants for transporting goods within the mining area should be classified as "mining service" for service tax purposes. The Tribunal found that a previous decision had established that mere handling and movement of coal within the mining area did not constitute mining service for service tax levy.

As a result, the Tribunal concluded that the service in question was not classifiable as mining service, leading to the allowance of the appeals and setting aside of the impugned orders confirming the service tax demands.