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TMI Blog2024 (5) TMI 1487X X X X Extracts X X X X X X X X Extracts X X X X ..... e services provided by the appellant for washing of coal or not? HELD THAT:- As per clause 8 of the agreement between the appellant and service recipient, the coal rejects shall be the property of the appellant and he is entitled to dispose of the said coal rejects and the value of the said coal rejects has been added in the taxable charges for the beneficiation of the raw coal. In these circumstances, when the value of coal rejects has already been included in the taxable value, on which the appellant has already discharged service tax, therefore, Service Tax cannot be demanded from the appellant twice. The sale of coal rejects is an independent activity and has no nexus with the service of the beneficiation of coal. We also take note of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely a condition of agreement and does not constitute consideration for the service of beneficiation of coal. As appellant has suffered / discharged VAT on sale of coal rejects, no Service Tax is payable by the appellant. We hold that appellant has rightly paid the Service Tax as per agreement on the activity of beneficiation of coal and the value of coal rejects is already included in the taxable value of service provided by the appellant. Therefore, the coal rejects is the property of the appellant on which no Service Tax is payable by the appellant. No merit in the impugned order and the same is set aside. - HON BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL) AND HON BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL) For the Appellant : Shri B. L. Nar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oal from the good quality coal, which is then supplied to the clients for power generation. As per the terms of the work orders entered into with MAHAGENCO and WBPDCL, the Appellant retains the inferior quality coal generated (here-in-after referred to as coal rejects ) and provides a rebate of Rs. 9.80 Rs. 2 per MT ( PMT ) of raw coal, in the beneficiation charges for such retention. The coal rejects being the property of the Appellants is sold in the market either as-is or by mixing it with good quality coal procured by the Appellant from the market. iv. A special audit u/s. 14A of the Central Excise Act, 1944 was conducted on the records of the Appellant, pursuant to which it was observed that the Appellant had not paid service tax on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xable service is incorrect. Therefore, the transaction of sale of coal rejects, either cleared as such or upon mixing with good quality of coal, is an independent transaction and has no nexus with the coal washing service provided by the Appellant. To support this contention, he relied on the decision of Intercontinental Consultants and Technocrats Pvt. Ltd. v. Union of India [2013 (29), S.T.R. 9 (Del.)], which has been affirmed by Hon ble Apex Court [2018 (10) G.S.T.L. 118 (S.C.)]. He also relied on the decision of Bhayana Builders Pvt. Ltd. v. Commissioner of Service Tax, Delhi [2013 (32) S.T.R. 49 (Tri. LB.)], which has been affirmed by Hon ble Apex Court [2018 (10) G.S.T.L. 118 (S.C.)]. 3.1. He also submitted that the condition of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e parties. 10. On going through the arguments made by both the sides and the issue placed before us, we observe that the sole issue to be decided by us is whether the value of coal rejects is includable in the value of taxable services provided by the appellant for washing of coal or not. 10.1. To decide the said issue, certain provisions of the agreement are extracted hereinbelow for consideration: 8.0 REJECT DISPOSAL: The reject produced from the washery / beneficiation plant shall be allowed to be the property of the Washery Operator and will be disposed off by the Washery Operator. The Washery Operator has already given credit in the beneficiation charges as indicated in Clause 12.0 of this order. The Washery Operator has to comply with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f coal rejects has already been included in the taxable value, on which the appellant has already discharged service tax, therefore, Service Tax cannot be demanded from the appellant twice. Further, the sale of coal rejects is an independent activity and has no nexus with the service of the beneficiation of coal. 10.3. We also take note of the fact that the appellant has raised invoice at the rate of 182.36 per metric tonne as coal beneficiation charges , which includes the rebate on coal rejects at the rate of 9.8 per metric tonne of raw coal, which clearly indicates that the appellant has paid Service Tax on the value of coal rejects on which a rebate has been given to the appellant. Therefore, allegation of undervaluation of taxable valu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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