2024 (3) TMI 457 - AT - Service Tax

Classification of service - activity such as raising/ sizing/ breaking/ loading/ transportation of manually sized limestone for service recipient M/s. GHCL - classifiable as Mining Service or otherwise? - Time limitation - suppression of facts or not - HELD THAT - From the work order it is clear that the order given to the appellant is for supply of chemical grade manually sized lime stone from mining site to the service recipient plant site. Therefore, there is no activity of mining given to the appellant. From this work order, it is also clear that mining was carried out by someone else in the service recipient s mine and the appellant was awarded the job of only sizing of lime stones manually and supply thereof to their site therefore sizing of already mined lime stones does not fall under the activity of Mining Service and the major part is of transportation of the goods. Therefore, the entire activity does not qualify to categorize the same as mining service. Moreover, on the transportation, undisputedly the service recipient discharges the service tax under reverse charge mechanism. Time Limitation - suppression of facts or not - HELD THAT - The appellant have made out a strong case on limitation inasmuch as on the same activity, the service tax was being discharged by M/s. GHCL and they were subject to audit from time to time therefore, the activity of the appellant for supply of manually sized lime stones to M/s. GHCL was not beyond the knowledge of the department. Therefore, suppression of fact cannot be alleged against the appellant. Hence, the demand is also liable to be set-aside on the ground of limitation. The demand is not sustainable either on merit or on limitation - appeal allowed.

Summary

Issues involved:
The issue involved in the present case is whether the appellant's activity of raising/ sizing/ breaking/ loading/ transportation of manually sized limestone for a service recipient is classifiable as Mining Service or not.

Summary:
The appeal was directed against an order confirming the service tax demand along with interest and penalty. The appellant argued that their main activity is post-mining and the larger portion is transportation, thus not qualifying as Mining Service. They also highlighted that the service recipient had already paid service tax under reverse charge mechanism, preventing double taxation. The department argued in favor of the impugned order. The Tribunal found that the appellant was only involved in sizing and transportation, not mining, as per the work order. It was noted that the service recipient paid tax under reverse charge for transportation. The Tribunal also agreed with the appellant's argument on the limitation, stating that the activity was known to the department due to audits, hence no suppression of facts. Consequently, the demand was set aside on both merit and limitation grounds, and the appeal was allowed with consequential relief.