2009 (6) TMI 147 - AT - Service Tax

Submission that the activity carried out by the appellants was for M/s. Hindustan Zinc Ltd. is in respect of mining activity. Mining activity came to the ambit of tax from 1-6-2007. There is no demand for such activity from 16-6-2005 submission that they had made deposit of nearly 25% of demand, further pre-deposit may not be insisted. - Order-in-original has not appropriately considered the contracts executed by the appellants with M/s. Hindustan Zinc Ltd. - Each activity provides its scope for taxation. In order to bring the appellant to the tax ambit, the appellant should have been examined thoroughly with reference to the payments received by him and to the nature of activity carried out. All such aspects are absence in the order. The order is non-speaking one. In absence of a speaking order, we consider that the appellant has already made a deposit to the extent indicated above and the Board Circular F. No. 232/2/2006-CX.4, dated 12-11-2007, prima facie, takes care of him. Therefore, we are of the view that the appellant should not be insisted for any further pre-deposit

Summary

Issues:
1. Whether the appellant's activity for M/s. Hindustan Zinc Ltd. falls under mining activity subject to tax.
2. Whether the order-in-original appropriately considered the contracts executed by the appellants with M/s. Hindustan Zinc Ltd.

Analysis:

1. The appellant contended that the activity for M/s. Hindustan Zinc Ltd. was related to mining, which became taxable from 1-6-2007, and there was no demand for such activity from 16-6-2005. The appellant had already deposited a significant amount towards the demand. The counsel referred to a Board Circular and a relevant case to support their argument. The tribunal noted that the order-in-original did not adequately consider the contracts between the parties, which outlined multiple activities without a clear scope for taxation. The tribunal found the order to be non-speaking and lacking examination of crucial aspects like payments received and the nature of activities. Considering the deposit made and the Board Circular, the tribunal waived the requirement for further pre-deposit during the appeal, as the appellant should not be insisted for additional pre-deposit.

2. The tribunal observed that the order-in-original did not properly analyze the contracts between the appellants and M/s. Hindustan Zinc Ltd. The contract revealed various activities without clear delineation for taxation. The tribunal emphasized the importance of examining the payments received and the nature of activities to determine the tax liability accurately. Since the order lacked a detailed analysis and was considered non-speaking, the tribunal concluded that the appellant had already made a substantial deposit and should not be required to make further pre-deposit during the appeal. Therefore, the tribunal waived the necessity of additional pre-deposit for the remaining demand while the appeal was pending.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, New Delhi highlights the issues raised, the arguments presented by the parties, and the tribunal's reasoning leading to the decision to waive further pre-deposit during the appeal process.