2022 (4) TMI 517 - AT - Service Tax

Classification of services - Business Auxiliary Services or mining services - services of excavation, extraction, grading, sorting, crushing, screening, loading and transportation of iron ore - period April 2006 to October 2006 - HELD THAT - The classification of activities of the assessee under BAS is no more res integra as the same is considered by this very Bench of CESTAT in the case of M RAMAKRISHNA REDDY VERSUS COMMR. OF C. EX. CUS., TIRUPATHI 2008 (10) TMI 115 - CESTAT, BANGALORE where it was held that the services rendered by the appellant are classifiable only under the category of Mining Services and therefore they would not be liable to service tax prior to 1-6-2007. In the present case, the primary activity of the appellant viz. winning minerals or raising iron ore from mines which was carried out through a separate contractor and as per the above order of this Bench, services relating to winning of minerals is held to be falling under the category of mining services which has become taxable w.e.f. 01/06/2007. Period involved in the case in hand is April 2006 to October 2006 and hence, the demand cannot sustain - appeal allowed. Maintainability of appeal - monetary amount involved in the appeal - appropriating and allowing credit of service tax - HELD THAT - The Government s Litigation Policy, i.e. Instruction F.No.390/Misc./116/2017-JC dt. 22/08/2019 was issued whereby the monetary limit for filing appeal before this forum was enhanced to ₹ 50 lakhs, i.e. to say, any dispute involving less than ₹ 50 lakhs should not filed by the Revenue before the CESTAT and it has also been made clear in the said instructions that the same would apply to pending cases as well. The disputed amount in the case on hand is ₹ 45,26,438/- which is below the prescribed monetary limit for filing appeal by the Revenue and hence, in terms of the above instruction, the appeal becomes non-maintainable and the appeal is therefore dismissed in view of the Litigation Policy. Appeal allowed - decided in favor of assessee.

Summary

Issues: Classification of services under Business Auxiliary Service (BAS) and Goods Transport Agency (GTA) service, eligibility for credit of service tax, appropriating and allowing credit of service tax, monetary limit for filing appeal.

Classification of services under Business Auxiliary Service (BAS):
The judgment revolves around the classification of services provided by the assessee under BAS and GTA service. The Commissioner had proposed to classify the activities of excavation, extraction, loading, grading, sorting, crushing, and screening of iron ore under BAS and the service of transportation of iron ore by road in a goods carriage under GTA service. The assessee contested this classification, citing a previous case where it was held that services related to winning minerals fall under mining services. The Tribunal agreed with this argument, determining that the primary activity of winning minerals or raising iron ore falls under mining services, which became taxable only from June 1, 2007. As the period in question was April 2006 to October 2006, the demand for service tax under BAS was deemed unsustainable, and the appeal by the assessee was allowed with consequential benefits.

Eligibility for credit of service tax:
The Commissioner allowed the assessee to claim a credit of service tax paid on input services up to a certain amount, holding the assessee liable for the balance tax liability. However, the Tribunal considered the Government's Litigation Policy, which set a monetary limit for filing appeals before the CESTAT at ?50 lakhs. As the disputed amount in this case was below the prescribed limit, the appeal filed by the Revenue against the appropriating and allowing credit of service tax was deemed non-maintainable and dismissed.

Monetary limit for filing appeal:
The judgment also addressed the issue of the monetary limit for filing appeals before the CESTAT as per the Government's Litigation Policy. The disputed amount in this case was below the prescribed limit of ?50 lakhs, leading to the dismissal of the Revenue's appeal on the grounds of non-maintainability.

In conclusion, the judgment clarified the classification of services under BAS, addressed the eligibility for credit of service tax, and considered the monetary limit for filing appeals before the CESTAT as per the Government's Litigation Policy, ultimately allowing the assessee's appeal and dismissing the Revenue's appeal based on the monetary limit.