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TMI BlogDraft - Applicability of service tax on activities undertaken at open cast mines – reg.X X X X Extracts X X X X X X X X Extracts X X X X ..... -10.2006. F.No. 232 / 2 /2006-CX.4 Government of India Ministry of Finance Department of Revenue (Central Board of Excise and Customs) Subject: Applicability of service tax on activities undertaken at open cast mines - reg. Coal mining and chrome mining involve 'open cast working' or 'open cast mining'. As per the definition under 'the Mining Act, 1952' "open cast working means a quarry, that is to say, an excavation where any operation for the purposes of searching for or obtaining materials has been or is being carried on, not being a shaft or an excavation which extends below superjacent ground". 2. One of the important activities involved in open cast mining is removal of stratum (layer of mud, boulders etc t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll under this definition) in case of open cast mining this process is not a preparatory activity but is an integral part of mining activity itself. 4. The issue has been examined. The taxable service, namely, 'Site formation and clearance, excavation and earthmoving and demolition service' covers the activities of site formation and clearance, excavation and earthmoving and demolition and includes,- (a) Drilling, boring and core extraction service for construction, geophysical, geological or similar purposes; or (b) Soil stabilization; or (c) Horizontal drilling for the passage of cable or drain pipes; or (d) Land reclamation work; or (e) Contaminated top soil stripping work; or (f) Demolition and wrecking of buildings, struct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehalf of the client' provide any such activity does not amount to 'manufacture' within the meaning of clause (f) of section 2 of the Central Excise Act, 1944. In the instant case the contractors undoubtedly produce coal for their clients, namely the coal companies. Further, extraction of coal is not a process amounting to manufacture within the meaning of section 2(f) of the Central Excise Act . Therefore, such an activity would fall under the purview of 'business auxiliary service'. 7. Many a times coal companies award contract for loading of coal in tippers at pit head and unloading at the railway sidings. Similar contracts are also awarded to load and unload overburdens within the mines area. The job basically involves deploymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . say from pithead to a designated storage place, from where the purchaser takes delivery thereof) or to outside (i.e. to railway sidings for unloading into railway wagons). It has been reported that in either case, no consignment note is issued as the transport is under full control of the mining companies. The 'taxable service' in case of transport of goods by road means 'any service provided or to be provided to a customer, by a goods transport agency in relation to transport of goods by road'. Further as per the definition 'goods transport agency' means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called. The transport of coal in both the cases, within mines and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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