2018 (8) TMI 1177 - AT - Service Tax

Survey and Exploration of Minerals - execution of integrated Seismic Job services and drilling of shot holes for Sector S-4 in Cambay Basin, Gujarat with ONGC in respect of M/s.Geofizyka Torun - It was alleged that appellant had collected service tax from the said person, however did not remit the same to the Government in respect of one invoice dt. 31.03.2007 raised for an amount of a sum of ₹ 57,98,435/- involving service tax liability of ₹ 7,09,728/- accordingly - Held that - Specific geological, geographical or prospecting activity or map-making is a sine qua non for meriting inclusion under the above service category for becoming exigible to service. From the meagre facts available on record and due to absence of contract submitted by appellant, we are not able to make a headway in deciding the matter - Accordingly, the issue concerning tax liability of ₹ 43,20,959/- with interest, relating to the contract dt. 16.12.2004/- referred to in para-3 of the SCN dt. 1.10.2007, the matter is being remanded to the adjudicating authority for analyzing the contract to arrive at a decision whether in fact the services provided would fall within the scope of Survey and Exploration of Mineral service. Demand of service tax - Survey and Exploration Service - Held that - It is not in dispute that the appellants have collected the amount of service tax under Survey and Exploration Service. This allegation has not been refuted by the appellant either during adjudication stage or before this forum - demand upheld. Penalties - Held that - The matter is remanded to the original adjudicating authority to arrive at a reasoned decision whether the penalties proposed in the notice require to be imposed or otherwise and accordingly, the quantum of any penalties that may be confirmed will have to be determined based on the final tax liability, if any, that may be confirmed by the said original authority. Appeal is partly dismissed and partly remanded.

Summary

Issues Involved:
1. Change of cause title due to GST introduction.
2. Allegation of non-payment of service tax by the appellant.
3. Nature of services provided by the appellant.
4. Interpretation of "Survey and Exploration of Mineral" service.
5. Dispute regarding tax liability and penalties.

Issue 1: Change of Cause Title due to GST Introduction
The Appellate Tribunal allowed the department's application for changing the cause title due to the introduction of GST, renaming the respondent as "The Commissioner of GST & Central Excise, Chennai South Commissionerate."

Issue 2: Allegation of Non-payment of Service Tax
The case involved the appellant being accused of not remitting service tax collected from a contract with ONGC, leading to a demand of ?50,30,687, confirmed by the Commissioner in an order dated 4.2.2008. The appellant challenged this demand and penalties under Sections 76 and 78 of the Act.

Issue 3: Nature of Services Provided
The appellant argued that the services rendered were related to camp mobilization, demobilization, maintenance, and drilling, which did not fall under the category of "Survey and Exploration of Mineral service." The Commissioner's order rejecting a refund claim was cited to support this argument.

Issue 4: Interpretation of "Survey and Exploration of Mineral" Service
The Tribunal noted confusion regarding the exact nature of services provided by the appellant, with allegations of seismic job services and collection of service tax on survey and exploration services. The definition of "Survey and Exploration of Mineral" was analyzed, emphasizing the need for specific geological or prospecting activities for inclusion in this service category.

Issue 5: Dispute Regarding Tax Liability and Penalties
Due to insufficient information and absence of the contract submitted by the appellant, the Tribunal remanded the matter to the adjudicating authority for a detailed analysis. The appellant was instructed to produce the contract with ONGC and any supporting evidence for a decision on tax liability. The Tribunal upheld the demand for ?7,09,728 related to a specific invoice but remanded the issue of penalties for further consideration.

In conclusion, the appeal was partly dismissed and partly allowed based on the above considerations, with directions for a thorough reevaluation by the adjudicating authority.