2022 (12) TMI 466 - AT - Service Tax

Classification of services - cargo handling service/mining service or not - whether the appellant had provided cargo handling service for the period 01.06.2007 and mining service for the period 01.06.2007 or had provided transport of goods by road service? HELD THAT - The taxable service of mining 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. The issue as to 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 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 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 taxable 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. It would be seen that 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. The appellant had, therefore, not provided cargo handling service prior to 01.06.2007 under section 65(23) of the Finance Act and mining service w.e.f. 01.06.2007. The order dated 04.11.2015 passed by the Commissioner (Appeals), therefore, cannot be sustained - Appeal allowed.

Summary

Issues involved:
1. Quashing of order confirming demand of service tax under "cargo handling service" and "mining service."
2. Nature of services provided by the appellant.
3. Classification of services as "cargo handling service," "mining service," or "transport of goods by road service."

Analysis:
1. The appeal sought to quash the order confirming the demand of service tax under "cargo handling service" and "mining service" for specific periods. The appellant claimed to have provided services under "goods transport agency service" to a particular entity, which discharged the service tax liability under the reverse charge mechanism.

2. The appellant's services involved loading coal into tippers from a mining area, transporting coal to a railway siding, and unloading coal. The appellant argued that based on a Supreme Court decision, the services should be classified as "transport of goods by road service" rather than "mining" or "cargo handling service."

3. The issue revolved around whether the appellant's activities constituted "cargo handling service" or "mining service" for specific periods or fell under the category of "transport of goods by road service." The Commissioner relied on the definition of "mines" under the Mines Act, 1952, to support the classification of services as mining-related.

4. The Supreme Court's judgment in a similar case clarified that transporting coal from pitheads to railway sidings should be classified as "transport of goods by road service" and not as a service related to mining activities. The Court emphasized that the definition of "mines" did not directly relate to the activity undertaken, supporting the appellant's argument.

5. Consequently, the Tribunal held that the appellant's services should be classified as "transportation of goods by road service" and not as "cargo handling" or "mining" services. The order confirming the demand of service tax was deemed unjustified, and the appeal was allowed, overturning the Commissioner's decision.

In conclusion, the judgment clarified the classification of services provided by the appellant, emphasizing the distinction between "transport of goods by road service" and activities related to mining or cargo handling. The Tribunal's decision was based on the Supreme Court's interpretation, leading to the appeal being allowed and the Commissioner's order being overturned.