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TMI Blog2018 (11) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... argeable to service tax under different categories. The Tribunal held that once the contract is a composite contract for the entire activities from site formation to segregation of ores then the same has to be charged as a separate service (Mining Services), which was made chargeable to service tax w.e.f 01.06.2007 only. Vivisecting the composite contract and charging service tax on different components of the contract individually under different services is not justified - demand set aside. Contract with M/s. B.K.Coalfields - Site formation services or not? - Held that:- After perusal of all documents, he has concluded that the activities are nothing but mining services which are chargeable to service tax only w.e.f. 01.06.2007 - there is no infirmity in the view taken by the adjudicating authority that the activities carried out under M/s. B.K. Coalfields Ltd contract also will not be liable to vivisected and charged to service tax under individual categories. Appeal dismissed - decided against Revenue. - Appeal Nos.ST/55/2009 & ST/70/2009 - ORDER NO.FO/76824-76825/2018 - Dated:- 23-10-2018 - SHRI P. K. CHOUDHARY, JUDICIAL MEMBER And SHRI V. PADMANABHAN, MEMBER (TECH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Drilling, loosening, excavating, loading and transportation to dump yard at a distance of 1.5 KM (overburden and rejects) Per Tonne 40.00 2. Processing of lumps +40 400 mm after screening through static grizzly and storing the same at a distance of 1 KM at the place specified for this purpose. Storing of -40 mm material at a separate place for processing in future Per Tonne 150.00 on finished size of +40 mm 3. Processing of lumps to size +12 22 mm or other specified size Per Tonne 128.00 on finished size of +12 mm 22 mm 1.3. After perusal of the relevant contracts, revenue authorities were of the view that in respect of the work awarded by M/s. TISCO, the activity of crushing undertaken by the assessee is in the nature of service falling under the category of Business Auxiliary Service . Further, the activity of transportation of finished product to the stock yard of Tata Steel was liable to payment of service tax under the category of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled by the them. 4. Ld. Advocate on the other hand, submitted that the Commissioner has rightly dropped the demand for service tax in respect of M/s. B.K.Coalfields Ltd. He emphasized the fact that the contract executed with M/s. B.K.Coalfields Ltd. was a consolidated contract and the activities in the nature of mining. This aspect has been appreciated by the adjudicating authority and he has dropped the demand for service tax made after designated such contract. Ld. Advocate further submitted that the contract with M/s. TISCO was also for consolidated mining activities. He submitted that even though separate rates have been mentioned in the contract for various items of work indicated therein, the scope of the contract should be considered as a whole and it can be appreciated that all activities are carried out within the mine and are in the nature of mining activity. He submitted that mining activity has been included as a separate service only w.e.f. 01.06.2007. From that date, he submitted that assessee has already started discharging the service tax on such contracts under the category of mining. He also relied on the following case laws in which such consolidated contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... simplicitor either for crushing or for transportation of material. It is a composite contract encompassing all the activities listed therein. When the entire scope of the contract is considered, it is evident that this will be covered only within the category of mining which has been included as a separate service w.e.f. 01.06.2007. The Tribunal in the case of the appellant reported in Thriveni Earthmovers Pvt. Ltd. vs. Comm. Of C.Ex. [2009(15) STR 393 (Tri.-Chennai)] has observed that movement of limestone and rejects within the mining area is covered by the entry mining of mineral, oil, gas and cannot be taxed under Cargo Handling Service prior to 01.06.2007. It was also recorded that when the activity was brought under the service tax net with effect from the particular date, the same activity cannot be subjected to tax under pre-existing tax entry unless the scope of pre-existing categories of services is simultaneously modified. 8. The Tribunal in the case of Hazaribagh Mining Engineering P. Ltd. vs. C.C.E., C. ST, BBSR-I [2017 (49) STR 289(Tri.-Kolkata) have considered a similar composite mining contract which was made chargeable to service tax under different cate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... composite contract cannot be treated as Site formation or Cargo Handling Service before 01-6-2007. 9. In view of the above decisions we are of the considered view that vivisecting the composite contract and charging service tax on different components of the contract individually under different services is not justified. Consequently, we set aside the demand in respect of M/s. TISCO contract and allow the appeal of the assessee. 10. Next we turn to contract with M/s. B.K.Coalfields. The scope of the work to be carried out in respect of Chenagoda Mines in Gaului, Orissa includes; i) The excavation and transportation of the mined material and overburden/rejects to the designated places. ii) Transportation of Segregated lumps to the crushing plant and to the labour yard. iii) The contract has different prices for various activities to be carried out. The show cause notice demanded service tax under Site Formation Services in respect of the activities, such as Drilling, loosening, excavating of overburden and under Cargo Handling Service for transportation to dump yard. The Adjudicating Authority himself, after carefully examining all the contracts came t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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