2017 (6) TMI 1142 - AT - Service Tax

Mining activities - The activities undertaken by the appellant was considered by the department as categorized as taxable service under Site Formation and clearance, excavation and earth removing and demolition services - Held that - in an identical set of facts, this Tribunal in the case of Kanak Khaniz Udyog 2017 (3) TMI 1365 - CESTAT NEW DELHI has held that services relating to mining provided prior to 01.06.2007 shall not be liable to service tax under the category of mineral service defined under Section 65(105)(zzzy) of the Finance Act, 1994 - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Whether mining activities undertaken by the appellant are liable for service tax under specific categories?
- Whether services provided by the appellant between July 2005 to March 2007 are taxable under the relevant provisions?
- Whether the impugned order confirming service tax demand is legally sustainable?

Analysis:

Issue 1: Liability of Mining Activities for Service Tax
The appellant undertook mining activities of raising limestone and overburdened removal for a cement company. The department categorized these activities as taxable services under 'Site Formation and clearance, excavation, and earth removing and demolition services.' The service tax demand was confirmed, leading to the appeal. The appellant argued that mining services were not taxable during the disputed period as mining services were brought into the tax net only from June 2007. The appellant relied on a tribunal decision in a similar case to support their argument.

Issue 2: Taxability of Services Provided
The tribunal referred to a previous decision involving similar facts where it was held that services related to mining provided before June 2007 were not liable for service tax under the specific category defined in the Finance Act, 1994. The tribunal noted that the scope of services provided by the appellant was wrongly applied to different tax entries without legal justification. It was clarified that activities falling under mining services were not taxable before June 2007, as per relevant tribunal decisions and legal provisions.

Issue 3: Legality of the Impugned Order
After examining the scope of work undertaken by the appellant and considering the relevant legal provisions and tribunal decisions, the tribunal found that the impugned order confirming the service tax demand was not legally sustainable. The tribunal set aside the impugned order and allowed the appeal in favor of the appellant based on the settled legal position regarding the taxability of mining services before June 2007.

In conclusion, the tribunal held that the mining activities undertaken by the appellant were not liable for service tax during the disputed period, as established by previous tribunal decisions and legal provisions. The impugned order confirming the service tax demand was set aside, and the appeal was allowed in favor of the appellant based on the legal and factual analysis presented.