2017 (7) TMI 494 - SC - Service Tax

Classification of services - mining service or GTA Service - Transportation of coal - Whether the goods i.e. coal transported by the respondent Singh Transporters from the pit-heads to the railway sidings would fall within taxable service as defined under Section 65(105) (zzzy) of the Service Tax Act of 1994 or as defined under Section 65(105)(zzp) of the Act? - definition of the term mines under Section 2(j) of the Mines Act, 1952 - Held that - a mine is not to be understood necessarily in respect of pit-heads of the mining area or the excavation or drilling underground, as may be, but also to the peripheral area on the surface. The said definition has no apparent nexus with the activity undertaken and the service rendered - appeal dismissed - decided against appellant.

Summary

Issues involved: Classification of services for taxation under the Service Tax Act of 1994 - whether transportation of coal from pit-heads to railway sidings falls under taxable service as per Section 65(105)(zzzy) or Section 65(105)(zzp).

Analysis:
1. The central issue in this appeal pertains to the classification of services provided by the respondent, a goods transport agency, in transporting coal from pit-heads to railway sidings. The crux of the matter lies in determining whether this service falls under the definition of taxable service as outlined in Section 65(105)(zzzy) or Section 65(105)(zzp) of the Service Tax Act of 1994. The Tribunal's decision in favor of the respondent was based on earlier judgments, which the appellant argues are not applicable due to the temporal distinction post 1st June, 2007.

2. The Court deliberated on the applicability of the provisions of Section 65(105)(zzzy) and Section 65(105)(zzp) of the Act to the transportation activities undertaken by the respondent. Despite the temporal difference highlighted by the appellant, the Court opined that the transportation of coal by the respondent is more suitably classified under Section 65(105)(zzp) as "transport of goods by road service," rather than falling under the ambit of services related to "mining of mineral, oil, or gas" as defined in Section 65(105)(zzzy).

3. In its analysis, the Court also addressed the Revenue's reliance on the definition of 'mines' under Section 2(j) of the Mines Act, 1952. The Court concluded that the definition of 'mines' does not directly correlate with the activity of transporting coal from pit-heads to railway sidings. The Court emphasized that the definition of 'mines' encompasses not only underground operations but also peripheral surface areas, which do not align with the specific service provided by the respondent in this case.

4. Ultimately, based on the interpretation of the relevant provisions of the Act and the nature of the services rendered by the respondent, the Court found no merit in the appeal and consequently dismissed it. The Court's decision rested on the classification of the transportation activity as falling under Section 65(105)(zzp) rather than Section 65(105)(zzzy) of the Service Tax Act of 1994, thereby resolving the issue at hand.