2009 (10) TMI 472 - AT - Service Tax

Stay- Business Auxiliary Services- The issue involved in this case is regarding Service tax liability on activities of mining as conducted by the applicant/appellant. The Show Cause Notice and the Order-in- Original both proceeded on the ground that the appellant was doing the activities of extraction, excavation, grading, sorting, etc. of iron ore from the mines. Held that- the activity involved in the instant case would fall under the category of mining service . There is the prima facie case for waiver of pre-deposit. Accordingly, the application for waiver of pre-deposit of the amounts involved in the matter is allowed and recovery thereof stayed till the disposal of the appeal.

Summary

Issues involved:
Service tax liability on mining activities.

Detailed Analysis:

1. Service Tax Liability on Mining Activities:
The issue in this case revolves around the service tax liability on mining activities conducted by the appellant. The Revenue contends that the activities fall under 'Business Auxiliary Service' (BAS) as per the Finance Act. The appellant argues that the entire activity is mining, citing the contract with specific mining operations like excavation, extraction, grading, and sorting of iron ore. The appellant points out that the Show Cause Notice itself acknowledges the mining nature of the activity. The appellant relies on previous decisions by the Tribunal to support their argument. The Revenue, on the other hand, asserts that the activities result in the production of goods under BAS, specifically under the category of 'production of goods on behalf of the client.' The Revenue highlights an amendment that includes 'production or processing of goods for, or on behalf of the client' under BAS.

2. Decision and Analysis:
Upon reviewing the submissions and records, the Tribunal notes that both the Show Cause Notice and the Order-in-Original considered the appellant's activities as extraction, excavation, grading, and sorting of iron ore. The Tribunal agrees with the appellant's argument that the activities fall under 'mining service,' as established in a previous Tribunal decision. The Tribunal finds that the appellant has presented a prima facie case for the waiver of pre-deposit. Consequently, the Tribunal allows the application for the waiver of pre-deposit and stays the recovery of the amounts until the appeal is disposed of.

This comprehensive analysis covers the legal judgment's key points, arguments presented by both parties, and the Tribunal's decision regarding the service tax liability on mining activities.