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TMI Blog2024 (3) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... e charge mechanism. Accordingly, the transport services provided by the Appellant cannot be classified under the category of Mining Services . It is observed that this view has been taken by the Hon'ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR VERSUS SINGH TRANSPORTERS [ 2017 (7) TMI 494 - SUPREME COURT] . Relying on the said decision, this tribunal has taken the same view in the case of M/S MAA KALIKA TRANSPORT PRIVATE LIMITED VERSUS COMMISSIONER OF CGST CENTRAL EXCISE, ROURKELA, ROURKELA [ 2023 (7) TMI 435 - CESTAT KOLKATA] wherein it has been held that transportation of coal within the mines is liable for service tax under the category of Goods Transport Agency Services and therefore the liability to pay service tax under the reverse charge mechanism lies on the service receivers - the transportation service rendered by the Appellant within the mines and outside the mines are not chargeable to service tax under the category of 'Mining Services'. Similarly, the activities of Shifting and Feeding of Coal into the Hoppers has been carried out in the Power Plants and hence the same cannot be categorized as 'Mining Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This date has no relevance for availing the credit on the Tippers as 'Capital goods'. As the Tippers were not used for providing Cargo Handling Service for which they are eligible as 'Capital Goods', at the time of receipt of the goods in the year 2008, we hold that the credit availed by the Appellant on this count has been rightly denied in the impugned order. The Appellant has not intimated the availment of capital goods credit on the Tippers. Hence, extended period has been rightly invoked to disallow the credit. For the same reason, the appellant is also liable for penalty. Accordingly, the demand of service tax along with interest upheld. As the irregular credit availed by the Appellant has been established, the Appellant is liable for interest and penalty under Rule 15(2) of the CENVAT Credit Rules 2004. Denial of CENVAT Credit of Rs.8,64,278/- on the 217 MT of M.S.Channel and M.S.Angle used for repairing Body/Dallas of the Tippers/Dumper - HELD THAT:- During the period from April 2012 to November, 2012, the Appellant purchased 217 MT of M.S. Channel and M.S.Angle and claimed that they have used the same for repairing Body/Dallas of the Tippers/Dumper which we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also outside the mines. The department has demanded service tax on these Transportation contracts under the categories of Mining Services . The following categories of services rendered by the Appellant are treated by the Department as 'Mining Services' and service tax has been demanded and confirmed under the category of 'Mining Services' in the impugned order: (i) Transportation of Coal to destination outside mines with incidental Loading/unloading taxed under Mining Service . (ii) Transportation within mines taxed under Mining Service. (iii) Contract for Feeding Coal into Power Plant Hopper Taxed under Mining Service. (iv) Free Supply of Diesel Taxed under Mining Service. 2.1. In the impugned order demand of Service tax of Rs.8,53,102/- has been confirmed under Business Auxiliary Service on the amount of Rs.75,60,332 reported as 'Handling Charges' in their books of account. 2.2. CENVAT Credit of Rs.37,13,615/- disallowed on Tippers (CH.87) used for providing Cargo Handling Service , as the same was not eligible as 'Capital Goods' at the time of its purchase. 2.3. CENVAT Credit of Rs.8,64,278/- availed by the Appellant on 217 MT of M.S. Channe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l from the coal yards etc. to different hoppers of the Power Plant round the clock in the process of generation of electricity. The activities of the Appellant of Shifting and Feeding of Coal into the Hoppers round the clock was carried out inside the Power Plants i.e. Mezia Thermal Power Station (MTPS) and Chandrapura Thermal Power Station (CTPS) of Damodar Valley Corporation (DVC). These contracts are taxed under the category of Mining Services as provided under section 65(105)(zzzy)/Section 65A of the Finance Act, 1994. (iv) Free Supply of Diesel Taxed under Mining Service. Under composite contract dated 27/08/2010 awarded by Calcutta Industrial Supply Corporation (CISC) for mining, it was agreed upon that the said client would supply the Diesel (HSD) free of cost for running of Tippers, Excavators, HEMM etc. for providing the Mining Services . Free supply of HSD valued Rs.3,97,69,281/- during 2011-12 against the said work order has been taxed under the category of Mining Services . 3.2. SERVICE TAX DEMAND OF RS.7,78,714/- (Rs.8,53,102/- MINUS Rs.74,388/-) UNDER THE CATEGORY OF BUSINESS AUXILIARY SERVICES . Service tax of Rs.7,78,714/- has been confirmed on the value of Rs.75,60 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les the same were put to use for providing Cargo Handling Services under the aforesaid work order. Accordingly, they submitted that the CENVAT Credit has been rightly availed by them. 3.4. Denial of CENVAT Credit of Rs.8,64,278/- on the 217 MT of M.S.Channel and M.S.Angle used for repairing Body/Dallas of the Tippers/Dumper During the period from April, 2012 to November, 2012, the Appellant purchased 217 MT of M.S.Channel and M.S.Angle for repairing Body/Dallas of the Tippers/Dumper used for providing taxable services under the category of Cargo Handling Services and claimed CENVAT Credit of Rs.8,64,278/- thereon treating the said items as input /capital goods. The Appellant submits that that during the period under dispute, they had 140 nos. of Tippers/Dumpers registered in their names and the said M.S.Angle/M.S.Channel were used for repairing the said Tippers/Dumpers. The department considered this claim of the appellant as a sham and denied this CENVAT Credit availed on the MS Channel and MS Angles. 3.5. Denial of CENVAT Credit of Rs.6,14,095/- availed on the strength of invoices which are in the names of third parties (contractors) The Appellant submits that they had claimed CE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,71,285 2,02,54,491 2009- 10 11,56,86,927 8,59,78,483 30,63,845 20,47,29,255 2,10,87,113 2010- 11 51,03,94,688 12,72,91,904 5,84,20,447 69,61,07,039 7,16,99,025 2011- 12 38,96,98,628 3,68,84,132 5,96,86,800 3,97,69,281 52,60,38,841 5,41,82,001 2012- 13 22,63,18,080 3,00,40,610 44,59,48,881 0 70,23,07,571 8,68,05,216 GRAND TOTAL 2,29,30,53,990 25,40,27,845 6.2. We observe that from the above, Rs. 6,63,71,235/- pertaining to Ash transportation has been dropped by the adjudicating authority and the balance demand of Rs.18,76,33,250/- has been confirmed under the category of 'Mining Services'. 6.3. Regarding the demand of service tax under 'Mining Services', the Appellant submits that the Service Tax demand has been raised by merely comparing ST-3 returns with Balance Sheet/Profit Loss A/c without any investigation. They further submit that the activity of transportation of Coal outside the mines and also within the mines cannot be classified under the categories of Mining Services, as defined under Section 65(105)(zzzy) of the Finance Act, 1994. We also observe that he activities of the Appellant Shifting and Feeding of Coal into the Hoppers round the clock inside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alued Rs.3,97,69,281/- supplied free of cost by the client cannot be included in the assessable value during 2011-12 for the purpose of demanding service tax under the category of Mining Services . Accordingly, we hold that the demand of service tax in the impugned order on this count is not sustainable. 6.5. In view of the discussions, we hold that the demand of service tax of Rs.18,76,33,250/- confirmed in the impugned order along with interest and penalty, under the category of 'Mining Services' is not sustainable and accordingly, we set aside the same. 7. Regarding the demand of Service tax of Rs.8,53,102/- confirmed in the impugned order, the Appellant submits that they have received Rs.75,60,332/- as discounts from vendors for purchase of Spares, Tyres, Lubricants etc. The discount amount received has been credited in the books of accounts under the head of Handling Charges. We observe that the Department has considered these receipts as taxable value received and demanded service tax under the category of Business Auxiliary Service . A perusal of the journals, invoices and CA Certificates submitted by the Appellant reveals that the Handling Charges of Rs.75,60,332/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital goods credit on the Tippers. Hence, extended period has been rightly invoked to disallow the credit. For the same reason, the appellant is also liable for penalty. Accordingly, we uphold the demand of service tax along with interest. As the irregular credit availed by the Appellant has been established, we hold that the Appellant is liable for interest and penalty under Rule 15(2) of the CENVAT Credit Rules 2004. 9. Regarding the disallowance of CENVAT Credit of Rs.8,64,278/-, we observe that during the period from April 2012 to November, 2012, the Appellant purchased 217 MT of M.S. Channel and M.S.Angle and claimed that they have used the same for repairing Body/Dallas of the Tippers/Dumper which were in turn used for providing taxable services under the category of Cargo Handling Services . This fact needs to be verified. In the impugned order, the adjudicating authority observed that a 'Dumping Truck' normally weighs 4-6 MT. The claim of consuming 217 MT angle/Channel for repairing work in one year for making 'Body/Dallas' appears nothing but a sham. We observe that the adjudicating authority has not given any finding as to whether the Tippers/Dumpers fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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