2017 (3) TMI 937 - AT - Service Tax

Refund claim - composite service of extraction of minerals along with various incidental works - mining services - Held that - In the circular dated 12.11.2007, it is clearly mentioned that the services with reference to making the land suitable for construction of building, factory or civil structure are to be taxed even before 1.6.2007 under the category of site formation & clearance service . The said circular also clarifies that coal cutting or mineral extraction and lifting them upto the pit head is integral part of the mining operations and are not to be taxed prior to 1.6.2007 - In the present case, there is an excavation of gypsum and loading of said gypsum in the mines. Other activities are with reference to the main intention of extraction of gypsum. Accordingly, the lower authorities have not examined the scope of the service with statutory entries during the relevant period - matter needs reconsideration. Time limitation - Held that - the relevant date to calculate the time bar should be the date of initial filing of claim i.e. 20.03.2008. The appellant s eligibility, if any, for refund should be reckoned considering the said date as the relevant date of filing the claim - the same requires re-consideration by taking original date of filing the claim relevant for deciding the time bar. The provisions of Section 11B will apply. The question of undue enrichment is also required to be examined afresh, in case of eligibility of the appellant for the claim on merit as well as on time bar. Appeal allowed by way of remand.

Summary

Issues:
Claim for refund of service tax on grounds of erroneous categorization and time bar.

Analysis:
The appeal was against the Commissioner (Appeals), Jaipur's order dated 24.03.2010. The appellants sought a refund of service tax amounting to ?12,68,162, contending that they provided a composite service involving mineral extraction, erroneously taxed under "Site Formation" pre-1.6.2007. The lower authorities rejected the claim on merit and time bar grounds.

The appellant argued no tax liability existed for mining activities pre-1.6.2007, and any erroneously paid amount must be refunded. They claimed Section 11 B's time bar provisions didn't apply in such cases. The respondent reiterated lower authorities' findings, emphasizing refunds must adhere to statutory provisions.

The Tribunal analyzed the nature of work undertaken by the appellant, noting it involved mining of gypsum and incidental activities. The Board's circular clarified taxation pre-1.6.2007, indicating mining operations weren't taxable before that date. The Tribunal cited a relevant precedent and found the lower authorities hadn't properly considered the service's scope under statutory entries during the relevant period.

Regarding the time bar, the Tribunal determined the initial claim filing date (20.03.2008) as crucial, not the resubmission date (10.10.2008) as considered by the lower authorities. It dismissed the appellant's argument against Section 11 B's application, citing High Court decisions and emphasizing the importance of statutory limitations.

The Tribunal set aside the impugned order, directing a fresh examination of the case on merit and time bar issues. It highlighted the need to reevaluate the appellant's eligibility for the claim and examine the question of undue enrichment. The matter was remanded back to the Original Authority for a fresh decision.

In conclusion, the appeal was allowed by way of remand, emphasizing a comprehensive review of the case's merits and adherence to statutory provisions, particularly Section 11 B.