2018 (4) TMI 538 - AT - Service Tax

Classification of services - shifting of Mineral Ore from the Mining Pit head to the Stock yard within the mining area - whether the activity is of transportation service or mining services? - reverse charge mechanism - Held that - in case of Singh Transporter 2017 (7) TMI 494 - SUPREME COURT the Hon ble Supreme Court held that the transportation of coal from pit heads to railway sidings is an activity of goods transport and not mining service. Liability of tax - reverse charge mechanism - Held that - the Appellant were charging separately for service of screening and transportation by raising separate bills - In case of Jai Jawan coal Carriers 2014 (6) TMI 393 - CESTAT NEW DELHI this tribunal has held that when in purchase orders different separate charges for transportation are defined in that case the transportation is treatable as separate contract and the liability of payment of service tax is on recipient of Service. The service is not mining service but goods transportation service on which service tax is payable under reverse charge basis by the service recipient - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Classification of services as 'Mining Service' or 'Transportation Service'.
2. Taxability under the appropriate category.
3. Interpretation of relevant legal provisions and case laws.

Analysis:
1. The appeal was filed by the revenue against an Order-in-Appeal passed by the Commissioner (Appeals) regarding the classification of services provided by the respondent. The revenue contended that the services rendered within the mining area should be classified as 'Mining Service' under Section 65(105)(zzzy) and not as 'Goods Transportation Services'.

2. The revenue argued that the service provider had provided services of screening and shifting of ore, which were covered under 'Mining Service'. They relied on a Board Circular and a judgment of the Tribunal to support their position. On the other hand, the respondent contended that the services should be classified as 'Transportation Service' and not 'Mining Service', citing a judgment of the Hon'ble Supreme Court in a similar case.

3. Upon examining the facts and the impugned order, it was observed that the purchase orders clearly indicated separate charges for screening and transportation activities, with separate bills raised and appropriate service tax paid for each. The Tribunal referred to a previous case to establish that when separate charges for transportation were defined in purchase orders, transportation could be treated as a separate contract. Additionally, the Tribunal referred to the Supreme Court judgment in Singh Transporters to conclude that transportation of coal from pit heads to railway sidings constituted goods transport and not mining service. Consequently, the Tribunal upheld the impugned order, ruling that the service provided by the respondent was goods transportation service, subject to service tax under reverse charge basis by the service recipient.

This detailed analysis of the judgment highlights the key issues of classification, taxability, and interpretation of legal provisions, providing a comprehensive understanding of the case and the Tribunal's decision.