2017 (9) TMI 995 - AT - Service Tax

Classification of services - movement of coal within the mines from pitheads to the dispatch point - whether mining services or transport of goods by road services? - Reverse Charge Mechanism - Held that - the issue is no more res integra, in view of the decision of this Tribunal in the case of Arjuna Carriers Pvt. Ltd. 2014 (11) TMI 1048 - CESTAT NEW DELHI , wherein this Tribunal has held that the transportation and handling of coal within the mining area would not be classifiable under Mining Service - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of services provided by the appellant under service tax liability and reverse charge mechanism.

Analysis:
The appellants were engaged in loading and transportation of coal in a mining area and received charges for these services. The department alleged non-payment of service tax on the transportation charges, considering the movement of coal within the mines as falling under taxable 'mining services.' The appellants argued that the service tax liability was discharged by the recipient under the category of 'transport of goods by road services' under reverse charge mechanism. They cited a Tribunal decision and contended that the movement of coal from mines to railway siding falls under GTA service. The Revenue, however, supported the findings in the impugned orders.

The Tribunal noted that the service receiver had discharged the service tax liability under reverse charge mechanism for the services provided by the appellants. The issue of proper classification of services was considered, and it was held that transportation and handling of coal within the mining area should not be classified under Mining Service. The Tribunal referred to a previous decision in the case of Arjuna Carriers Pvt. Ltd., which was affirmed by the Chattisgarh High Court. This decision was also relied upon in other cases by the Tribunal. Based on these precedents, the Tribunal found no merit in the impugned orders and allowed the appeals in favor of the appellants.

In conclusion, the Tribunal set aside the impugned orders, ruling in favor of the appellants based on the classification of services provided within the mining area and the discharge of service tax liability by the recipient under the reverse charge mechanism. The decision was pronounced in open court on 17.07.2017.