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2010 (2) TMI 331 - AT - Service TaxStay-Business Auxiliary Service- the Applicant entered into a Contract for providing mining service to M/s. Tata Iron & Steel Co. The Mining Service relates to excavation transportation of material etc. within the mining area and the Mining Service comes under the purview of Service Tax with effect from 1-6-2007 and the present demand is prior to that period. The contention is that the composite Contract has been entered into for mining service which is not liable for Service Tax prior to 1-6-2007 and the demand is accordingly not sustainable. Held that- transportation within mining area is part of mining activity and not separately taxable. Prima facie strong case in favour of appellant as contract is for mining. Mining service subject to service tax from 1.6.2007 and present demand prior to such date. Pre-deposit waived.
Issues:
1. Stay petition for waiver of predeposit of Service Tax and penalty. 2. Whether the Contract for providing mining service is liable for Service Tax. 3. Whether the activity of converting ROM to finished product amounts to manufacture. 4. Applicability of Notification No. 8/2005-S.T. for exemption. 5. Interpretation of terms and conditions of the Contract with M/s. Tata Iron & Steel Co. Analysis: 1. The Applicant filed a Stay Petition seeking waiver of predeposit of Service Tax and penalty amounting to Rs. 1,24,83,644.00. The demand was confirmed for providing Business Auxiliary Service and Cargo Handling Service. The Applicant contended that the Contract for mining service with M/s. Tata Iron & Steel Co. was entered into before the Service Tax period, making the demand unsustainable. Additionally, they argued that the conversion of ROM to finished product should be considered as manufacturing activity, exempting them from Service Tax. The Applicant relied on a Tribunal decision supporting their claim of exemption under Notification No. 8/2005-S.T. 2. The Revenue argued that the Contract was for providing Business Auxiliary Service to M/s. Tata Iron & Steel Co., making it liable for Service Tax. They contested the applicability of Notification No. 8/2005-S.T. and supported the lower authority's findings upholding the demand. The Tribunal analyzed the terms of the Contract, which primarily involved excavation and transportation of ROM within the mining area. Referring to a previous decision, the Tribunal noted that transportation within the mining area is considered part of mining activity and not separately taxable under Service Tax. 3. Based on the terms and conditions of the Contract, the Tribunal found a strong case in favor of the Applicant. The Contract primarily involved mining activities, falling under the scope of Service Tax post-1-6-2007, while the demand was for a period before that. Consequently, the Tribunal waived the pre-deposit of Service Tax, interest, and penalty, staying the recovery during the Appeal's pendency. The Stay Petition was allowed, providing relief to the Applicant. This comprehensive analysis of the judgment highlights the key issues, arguments presented by both parties, relevant legal interpretations, and the final decision rendered by the Tribunal.
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