2024 (7) TMI 67 - AT - Service Tax

Classification of service - service of mining, transportation and hiring of dumpers and excavators separately given with rate of individual item - mining service or not - recerse charge mechanism - whether the transportation can be treated as part of mining service and liable to service tax under mining service as claimed by the Revenue or whether the same should be treated as independent transportation service for which the service recipient i.e. GMDC is required to discharge the service tax under RCM? - judgments and board circular relied by the appellants not dealt upon - violation of principles of natural justice. HELD THAT - Even though there is consolidated contract but since each activity has been prescribed separately and the rate for each activity was given separately, it is considered as separate activity undertaken by the appellant to perform. Therefore, the transportation activity appears to prima facie independent from the mining activity. The Adjudicating authority had no occasion to deal with the judgments and board circular relied by the appellants in their favour. Since, the issue involved is mixed question of law and fact, the fact of the present case needs to be verified and ensure that the same is matching with the fact of the judgments and board circulars cited by the appellant and thereafter the matter to be decided a fresh. Therefore, entire matter should go back to the Adjudicating Authority to decide a fresh, considering, all the judgments and board circular relied by the appellant and also to see the facts of those cases are identical to the facts of the present case. Petition allowed by way of remand.

Summary

Issues Involved:
Interpretation of contract terms for service tax liability on transportation in mining activities.

Analysis:
The issue in this case revolves around determining the service tax liability on transportation activities related to mining services. The appellant argued that transportation should be treated as an independent service, while the Revenue claimed it should be considered part of mining service. The appellant contended that they had already paid service tax on mineral excavation under different categories. They also argued that transportation of limestone and lignite post-mining should not be taxable under mining service. The appellant relied on various decisions to support their argument, including the Hon'ble CESTAT Delhi and the Hon'ble Supreme Court judgments.

The appellant further argued that transportation of minerals should be classified as Goods Transport Agency (GTA) service, not mining service. They referenced multiple decisions and circulars to support their position. The appellant emphasized that they had a composite contract with the service recipient, where separate invoices were raised for different activities performed, indicating the independence of transportation from mining. They also cited a Bombay High Court judgment to strengthen their argument.

Moreover, the appellant contested the demand raised invoking the extended period of limitation, stating there was no suppression of facts. They supported their stance with various judgments, including those from the Supreme Court. The appellant prayed for setting aside the order and allowing the appeal.

On the contrary, the Revenue reiterated the findings of the impugned order without introducing new arguments. The Appellate Tribunal carefully considered both sides' submissions and records. They noted that the agreement between the appellant and the service recipient outlined separate activities with individual rates, suggesting the independence of transportation from mining.

The Tribunal acknowledged the evolving jurisprudence on the issue and the judgments delivered by various forums. Due to the mixed question of law and fact involved, the Tribunal decided to remand the matter to the Adjudicating Authority for a fresh decision. They instructed the Adjudicating Authority to verify the facts of the case against the judgments and circulars cited by the appellant. The Tribunal directed the Adjudicating Authority to pass a de-novo order within one month, ensuring the appellant's right to a personal hearing and submission.

In conclusion, the Tribunal set aside the impugned order and remanded the matter for further adjudication, emphasizing the need to consider all relevant judgments and circulars before reaching a decision.