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TMI Blog2024 (12) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... ion number 30/ 2012 dated 20.06. 2012. Foremost it can judicially be noticed that impact of mining can occur at local, regional, and global scales through direct and indirect mining practices. Mining operations often result, insignificant, environmental impacts on local ecosystems and broader implications for planetary environmental health - These processes also affect the atmosphere through carbon emissions, which contributes to climate change most of the mining methods, therefore have significant environmental and public health effects hence the mining companies are required to follow, strict, environmental, and rehabilitation codes to ensure that the mined areas return to its original state. In the year 1992, Rio Declaration on Environment and Development coined the concept of Sustainable Development of environment and formulated guiding principles for the purpose, one of those principles is, The Polluter Pays - This principal is now universally accepted as environmental law not only by Organization for Economic, Co-operation, and Development (OECD) and European Countries (EU), United Kingdom, United States of America, France, Canada, Australia but also by India under the enviro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f District Mineral Foundation (DMF) National Mineral Exploration Trust (NMET) as provided under section 9B 9C respectively of the said Act. Department observed that appellants have failed to discharge their service tax liability on the said two amounts for which appellants were liable under Reverse Charge Mechanism. It was observed that an amount of Rupees 19,94,78,400/- towards 30% of the royalty and an amount of Rupees 1,32,98,560/- towards 2% of the Royalty as was paid by the appellant on account of DMF NMET respectively, during the period from 01.04.2016 to 30.06.2017. But service tax accounting, to Rupees 3,19,16,544/- was not paid under RCM. 2. Based on these observations the show cause notice bearing number148/2018-19 dated 11.03.2019 was served on the appellant proposing the discovery of the aforesaid amount of Rs. 3,19,16,544/- along with proportionate interest and the appropriate penalties. The said proposal has been confirmed vide order in original (O-I-O ) bearing number 0007 19 20 dated 31.01. 2020. Being aggrieved of the said order, the appellant is before this Tribunal. 3. We have heard Mr. Ajay Prasad, ld. Counsel for the appellant and Mr. Manoj Kumar, ld. Authorise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Royalty and hence service tax is payable on these payments also as is in the case of royalty. Hence, there is no infirmity in the order under challenge when the service tax demand qua the amount paid to DMF NMET is confirmed along with the interest. Since the non-payment of service tax resulted into evasion of revenue, penalty has also been rightly Imposed. LD. AR has relied upon the decision in the case of Vikram Ispat vs commissioner of Central exercise, Mumbai-III reported in 2000 (120) E.L.T. 800.(Tri. LB) to impress upon that nature of tax cannot be determined by the measure thereof. With these submissions and denying all the grounds raised by the appellant, for challenging the impugned order, the present appeal is prayed to be dismissed. 8. Having heard the rival contentions of both the parties and perusing the entire record of this appeal, we observe and hold as follows: In the present case, the demand has been confirmed on the ground that the amounts, in addition to Royalty , paid by appellants to District Mineral Foundation (DMF) and to National Mineral Exploration Trust (NMET) are also akin to Royality on which service tax is payable. 9. We observe that Royalty in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C ruled that royalty is tax, thereby preventing states from levying additional taxes or cesses on Royalty limiting the ability of state to generate revenue from mining activities. The states are otherwise empowered to Levy taxes on mineral rights in terms of entry 50 of list II, the state list. However, the year 2004 the five judge bench of the Apex court revisited the India Cement judgment while deciding the case titled as State of West Bengal vs. Kesoram Industries Ltd. in Civil Appeal No. 1532 of 1993 decided on 15.01.2004 and stating that the India Cement judgment suffered from a typographical error and the court had mistakenly written that royalty is a tax while meaning that cess on royalty is a tax. This contradiction of verdict by two constitutional benches was referred to the larger bench of Supreme Court. The nine judge bench has decided the reference in the case titled as Mineral Area Development Authority (MADA) vs. Steel Authority of India (SAIL) on 25th July 2024 declaring that royalty on mining is not in nature of tax and thereby overruling the judgment of India Cement case. 12. It now stands established that royalty is not tax. It is the consideration in the nature o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mineral Foundation. (4) to (6) ----------------------- The same is the position in respect of payments made to NMET under section 9C of the Mines Act. 16. The above provisions clarify that DMF and NMET are the trusts created by the state governments being different from the later. In the light of above discussion, the question to be adjudicated for deciding service tax liability of the appellants towards the amount paid to both these trusts is: Whether DMF NMET are also rendering any service to the appellants and that they are Governmental Authorities. 17. Foremost it can judicially be noticed that impact of mining can occur at local, regional, and global scales through direct and indirect mining practices. Mining operations often result, insignificant, environmental impacts on local ecosystems and broader implications for planetary environmental health. To accommodate mines and associated infrastructure, land is cleared extensively, consuming significant energy and water resources, emitting, air, pollutants, and producing hazardous waste mining can cause erosion, loss of biodiversity, contamination of soil, groundwater, and surface water due to chemicals from mining processes. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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