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TMI Blog2024 (7) TMI 1313X X X X Extracts X X X X X X X X Extracts X X X X ..... t liable for Service Tax under the category of site formation and clearance, excavation and earth moving and demolition services . The ld. adjudicating authority has given a well-reasoned finding to arrive at the conclusion that the Respondent is not liable for payment of service tax under the category of site formation and clearance, excavation and earth moving and demolition services , for the period prior to 01.06.2007. Accordingly, there are no infirmity in the impugned order passed by the ld. adjudicating authority in dropping the demand of service tax for the period prior to 01.06.2007 - the ld. adjudicating authority has rightly dropped the demand of Service Tax under the category of site formation and clearance, excavation and earth moving and demolition services for the period prior to 01.06.2007. Non-imposition of penalty - HELD THAT:- It is observed that the appellant had discharged their entire service tax liability before issuance of the Show Cause Notice. They had also discharged major part of interest liability before issuance of the Show Cause Notice. In view of the above fact, the ld. adjudicating authority has extended the benefit of Section 80 of the Finance Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Service Tax under the category of site formation and clearance, excavation and earth moving and demolition services for the period from 16.06.2005 to 31.05.2007 and under the category of mining service for the period from 01.06.2007 to 30.09.2008. Accordingly, a Show Cause Notice dated 20.10.2010 was issued to the Respondent proposing to demand Service Tax, including cess, amounting to Rs.4,21,07,469/-. 4. The Notice was adjudicated by the Ld. Commissioner vide the impugned order wherein the Ld. Commissioner has confirmed the demand of service tax of Rs.2,23,47,382/- along with cess, under the category of 'Mining Services' and dropped the demand of Rs.1,97,60,087/- demanded under the category of site formation and clearance, excavation and earth moving and demolition services for the period prior to 01.06.2007. He has also not imposed penalties under Sections 76, 77 and 78 of the Finance Act, 1994. Aggrieved against the dropping of the demand and non-imposition of penalties, the Department has filed this appeal. 5.1. In their grounds-of-appeal, the Department has referred to the C.B.E.C. Circular in F.No. 232/2/2006-CX.4 dated 12.11.2007 wherein it was clarified that exca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the aforesaid category of mining service . Accordingly, they submit that for the period prior to 01.06.2007, the activities undertaken by them are not liable to Service Tax under the category of site formation and clearance, excavation and earth moving and demolition services . In view of the above, the Respondent submits that the ld. adjudicating authority has rightly dropped the demand and accordingly they prayed for rejecting the appeal filed by the Department. 7. Heard both sides and perused the appeal documents. 8. We observe that the respondent has entered into agreements with M/s. OIL and M/s. ONGC to carry out works for drilling operations of wells in oil fields in the state of Assam and Arunachal Pradesh. A perusal of the Work Orders executed by the Respondent reveals that all the activities undertaken by them are in relation to mining service, which was brought into the net of taxable services with effect from 01.06.2007. We observe that the ld. adjudicating authority has examined the work orders and given his findings at paragraph 2.2 and 2.3 of the impugned order wherein it has been categorically recorded that the activities undertaken by the respondent under the 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over jobs mentioned therein and so I am of the view that those activities were not related to development or preparation services for drilling or extraction of minerals and accordingly these services can not be held to be taxable under the category of site formation and clearance, excavation and earthmoving and demolition services . As per the Work Order detailed at sl. no. 10 of the table, I find that the noticee was to undertake stimulation jobs and sand control operations on normal and sour wells or any other jobs assigned by ONGC by utilising truck mounted acid pumpers provided by ONGC and they were primarily responsible for operation and maintenance. From the copy of the contract I do not find that the jobs detailed therein can be considered as related to development or preparation services for drilling or extraction of minerals and accordingly these services too can not be held to be taxable under the category of site formation and clearance, excavation and earthmoving and demolition services . I also find from the Work Orders detailed at sl. no. 11 and 12 of the table at the foregoing para that the jobs were primarily for operation and maintenance and so I hold the view that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.06.2007. Therefore, we hold that the services rendered by the Respondent prior to 01.06.2007 are not liable to Service Tax under the category of site formation and clearance, excavation and earth moving and demolition services . Accordingly, we hold that the ld. adjudicating authority has rightly dropped the demand of Service Tax under the category of site formation and clearance, excavation and earth moving and demolition services for the period prior to 01.06.2007. 8.2. Regarding non-imposition of penalty, we observe that the appellant had discharged their entire service tax liability before issuance of the Show Cause Notice. They had also discharged major part of interest liability before issuance of the Show Cause Notice. In view of the above fact, the ld. adjudicating authority has extended the benefit of Section 80 of the Finance Act, 1994 and not imposed penalties under Sections 76, 77 and 78 of the Act. We therefore observe that there is no suppression of fact with intention to evade tax established in this case. Accordingly, we hold that the ld. adjudicating authority has rightly extended the benefit of Section 80 of the Finance Act, 1994 and not imposed penalties under ..... 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