9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (8) TMI 792 - AT - Service TaxClassification of services - management, maintenance and repair service/mining service or works contract services ? - period April, 2007 to May, 2007 - reverse charge mechanism - HELD THAT - The activity in question with regard to exploration of oil by making horizontal drilling from existing/dead wells, there is no activity in the work order with regard to management, maintenance and repair services of the existing wells. It is held that the merits classification of the above services is mining service , which came under the Statute w.e.f. 01.06.2007 and in the case of ATWOOD OCEANICS PACIFIC LTD. VERSUS COMMISSIONER OF SERVICE TAX, AHMEDABAD 2012 (12) TMI 425 - CESTAT, AHMEDABAD , this Tribunal held that the drilling, testing and completion of exploratory oil wells will be taxable only w.e.f. 01.06.2007 as services in relation to mining of mineral, oil or gas. Again, in the case of M/s Quippo Oil and Gas Infrastructure Limited Vs. Commissioner of Service Tax 020 (11) TMI 437 - CESTAT NEW DELHI , the activity of drilling of core holes and test wells was held to be taxable only w.e.f. 01.06.2007 as services in relation to mining of mineral, oil or gas - thus, the activities in question, do qualify as mining services , which came into taxable list w.e.f. 01.06.2007. Thus, for the prior period, no service tax is payable under management, maintenance and repair services - the impugned demand against the appellant under reverse charge mechanism, is set aside. Appeal allowed.
Issues Involved:
1. Classification of services for taxation under service tax - whether services received by the appellant fall under "management, maintenance and repair" services or "mining service". 2. Liability of the appellant to pay service tax for the period before and after 01.06.2007. Summary: Issue 1: Classification of services for taxation The appellant, a Public Sector Undertaking, awarded a contract for drilling new wells for oil exploration using Ultra Short Radius Drilling Technology. The Revenue alleged that the services constituted works contract services falling under "management, maintenance and repair" services. The appellant argued that the services should be classified as "mining service" as they were related to the exploration of oil. The Tribunal examined the scope of work executed by the contractor, which included activities like well designing, drilling, completion, and testing of wells using specialized equipment and services. The Tribunal observed that the activities did not involve "management, maintenance and repair" services of existing wells but were more aligned with "mining services" as per precedents. The Tribunal referred to previous judgments to support its decision that activities related to oil exploration are taxable as "mining services" only from 01.06.2007 onwards. Issue 2: Liability of the appellant for service tax The Tribunal held that for the period before 01.06.2007, the services received by the appellant were correctly classified as "mining services" and not liable for service tax under "management, maintenance and repair" services. Consequently, the impugned demand for service tax under reverse charge mechanism was set aside, and the appeal was allowed in favor of the appellant with consequential relief. In conclusion, the Tribunal determined that the services provided to the appellant for oil exploration through drilling activities using specialized technology were rightly classified as "mining services" and not subject to service tax under "management, maintenance and repair" services for the period before 01.06.2007.
|
