2023 (12) TMI 1144 - AT - Service Tax

Levy of service tax - Site Formation Clearance, Excavation Earth Moving Demolition Services - difference between Balance Sheet Service Tax Return figures. In respect of dropping of demand of Rs.11,64,74,435/- - HELD THAT - The services rendered by the assessee both in terms of the scope of the relevant statute as well as judicial pronouncements cannot be considered as Site Formation and Clearance, Excavtion and Earth Moving and Demolition Services for the period from 16.6.05 to 31.5.07. According to me the valuation against Site formation etc. arrived at by ICWAI does not affect this inference because determination of value of a part of a service in no way affects the character of the service as given under agreements. The agreements do not mention any separate consideration for overburden removal or site formation. In respect of dropping of demand of Rs.2,09,43,980/- - HELD THAT - Due cognizance given to the certificate issued by the statutory auditor of the company C.Ghatak Co which in effect had completely reconciled the difference of Rs.19,32,74,085/- by which the balance sheet figure exceeds the figure covered under bills raised on mining clients, and on which service tax demand of Rs.2,09,43,980/-has been raised in the impugned SCN. Dropping of penalties under Section 78 - HELD THAT - In consonance with the Board s Circular No.137/167/2006/CX-4 dated 03/10/2007 read with provisions of Section 73(3) of the said Act, it is found the issues of the instant case are squarely covered by such provisions and clarifications in so far as the demand of Rs.26,01,36,069/- is concerned. As a sequel to the above reasons, it is opined that for conclusion of all proceeding in respect of the demand for the aforesaid period against the assessee in terms of Section 73(3) of the Act read with Board s Circular. In the circumstances, there are no justification for imposing penalties against this amount. The Adjudicating authority has considered all the factual details and statutory provisions and case law for coming to his considered decision - there are no reasons to differ with his findings - appeal of Revenue dismissed.

Summary

Issues involved:
The judgment involves the dropping of demands by the Adjudicating authority for Site Formation & Clearance, Excavation & Earth Moving & Demolition Services, and Mining Service. Additionally, it concerns the dropping of proposed penalty under section 78 for a specific Service Tax amount.

Site Formation & Clearance, Excavation & Earth Moving & Demolition Services:
The Adjudicating Authority examined the statutory provisions and a Circular to determine that services related to mining were not considered as part of Site Formation services. Referring to case laws, it was established that services under a comprehensive mining contract could not be separated for levying service tax solely on the Site Formation aspect. The agreements in question were executed for mining coal, not site formation, which was further supported by the absence of separate consideration for site formation in the agreements. The Adjudicating Authority concluded that the services provided did not fall under Site Formation & Clearance, Excavation & Earth Moving & Demolition Services for the relevant period.

Mining Service:
A certificate issued by the company's Chartered Accountants reconciled the difference in figures related to mining services, indicating that certain expenditures were chargeable to the Profit & Loss Account. The Adjudicating Authority gave weight to this certificate, which effectively resolved the discrepancy between balance sheet figures and billed amounts to mining clients. This reconciliation led to the dropping of the demand for Rs.2,09,43,980 related to mining services.

Penalty under Section 78:
In considering penalties under Section 78, the Adjudicating Authority referenced various Tribunal observations, Court decisions, and a Board's Circular. By applying the provisions of Section 73(3) of the Act and relevant clarifications, it was determined that the issues of the case were covered by these provisions. Consequently, the Authority found no justification for imposing penalties on the amount of Rs.26,01,36,069, and all proceedings in this regard were concluded in accordance with the statutory provisions and clarifications.

In conclusion, the Adjudicating Authority's decision to drop the demands and penalties was upheld by the Appellate Tribunal. The Tribunal found that the Authority had thoroughly considered factual details, statutory provisions, case law, and relevant certificates before making the decision. Therefore, the Revenue's Appeal was dismissed based on the findings and conclusions reached by the Adjudicating Authority.