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2022 (6) TMI 43 - AT - Service TaxLevy of penalty u/s 78 of FA - Non-payment of Service Tax - Cargo Handling Services or mining services - work of loading, unloading and transportation of a particular quantity of coal from coalface to railway siding within the specified time frame - whether the appellant had provided cargo handling service for the period 01.04.2007 to 30.05.2007 and mining service for the period 01.06.2007? - HELD THAT - The taxable service of mining defined under section 65 (105) (zzzy) of the Finance Act means any service provided or to be provided to any person by any other person, in relation to mining of mineral, oil or gas. The Commissioner has placed reliance upon the definition of mines under the Mines Act, 1952 and has observed that all processing including handling and movement of coal from one point of mines to dispatch point of mines are activities carried out in relation to mining of minerals. This issue was examined by the Supreme Court in COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR VERSUS SINGH TRANSPORTERS 2017 (7) TMI 494 - SUPREME COURT . The issue involved was whether coal transported from pitheads of the mines to the railway sidings would fall within the taxable service defined under section 65 (105) (zzzy) of the Finance Act. The Supreme Court held that the activity would appropriately be classified under the head transport of goods by road service and the activity does not involve any service in relation to mining of mineral as contemplated under section 65(105) (zzzy) of the Finance Act. The Supreme Court also held that the definition of mines has no apparent nexus with the activity undertaken under the service rendered - the Supreme Court categorically held that the activity undertaken by the appellant would fall under the head transportation of goods by road service . The Commissioner (Appeals) was, therefore, not justified in holding that the appellant had undertaken the activity of mining service w.e.f. 01.06.2007. It would also not possible to sustain the order passed by the Commissioner holding that these activities undertaken by the appellant prior to 01.06.2007 would fall under the category of cargo handling service . This is for the reason that the Supreme Court categorically held that the activity undertaken by the appellant would fall under the heading transport of goods by road service . The appellant had, therefore, not provided cargo handling service prior to 01.06.2007 under section 65(23) of the Finance Act. Appeal allowed - decided in favor of appellant.
Issues:
- Whether the appellant provided 'cargo handling service' for the period 01.04.2007 to 30.05.2007 and 'mining service' for the period 01.06.2007. Analysis: The case involved an appeal challenging an order passed by the Commissioner (Appeals) upholding a penalty imposed under section 78 of the Finance Act, 1994. The appellant was accused of not paying service tax for providing services related to loading, unloading, and transportation of coal. The Joint Commissioner held that these activities were chargeable to service tax under 'cargo handling service' before 01.06.2007 and under 'mining service' thereafter. The appellant appealed against this decision. The Supreme Court's judgment in Singh Transporters vs. Commissioner of Central Excise, Raipur was cited, where it was established that transporting coal from pitheads to railway sidings falls under 'transport of goods by road service' and not 'mining of mineral' service. The Court emphasized that the definition of 'mines' does not have a direct connection to the services provided. Consequently, the appellant's activities were correctly classified as 'transport of goods by road service' and not 'mining service' as claimed by the Commissioner (Appeals). The Tribunal concluded that the Commissioner's decision was not justified, and the appellant did not provide 'cargo handling service' before 01.06.2007. Therefore, the order upholding the penalty was set aside, and the appeal was allowed. The judgment highlighted the importance of correctly interpreting the nature of services provided to determine the applicable tax liability under the Finance Act, 1994.
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