TMI Blog2013 (2) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... extraction of oil by using the floating rigs supplied by M/s. Aban is definitely not covered under this category. Hence the activity of supply of floating rigs to the appellant by M/s. Aban is not covered under “Mining Service”. The taxability of ‘supply of tangible goods services’ would get attracted when a supply of tangible goods including machinery, equipment and appliances is made for the use of service recipient. The taxable service covers where tangible goods are supplied without transferring possession and effective control thereof though the goods are made available to the service recipient for use. In the instant case, M/s. Aban had supplied floating rigs to the appellant for post extraction activity without transferring possession and effective control. As per Section 65A of the Finance Act, if a service is classifiable under two or more sub-clauses of clause (105) of Section 65, Classification shall be effected to the sub-clause which provides the most specific description to sub-clauses providing a more general description. Activity of supply of floating rigs by M/s. Aban Offshore Ltd. to the appellant is more specifically covered under the category “Supply of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.1 The appellant as an operator had entered into an agreement with M/s. Aban Offshore Ltd. for supply and operations of a Floating Rig for use in its production activities. M/s. Aban Offshore Ltd. is a registered service tax assessee under the category Mining Service Storage and Warehousing Service, GTA Service, etc. M/s. Aban Offshore Ltd. had charged Service tax from the appellant for supply and operations of rig under Mining Service w.e.f. 1-6-2007. The appellant had filed a refund claim for Rs. 13,88,47,930/- on 5-5-2009 on the grounds that the Service tax on supply of rig is taxable w.e.f. 16-5-2008 only under the category Supply of tangible goods service and that they had been erroneously charged by M/s. Aban Offshore Ltd. under Mining Service and the same was paid by them erroneously for the period from 1-6-2007 to 15-5-2008 under the said category. 2.2 The appellant was issued with a show cause notice proposing to reject the refund claim on the following grounds : (a) M/s. Aban Offshore Ltd. who had collected service tax from the appellant and paid to the Department under Mining service had not raised classification dispute. (b) The appellant had re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person. The appellant submitted that the concept of unjust enrichment is not applicable to their case for the following reasons : (a) It is clear from the relevant clauses of contract regarding price determination of oil, that the price in respect of crude oil produced is fixed based on the price quoted in the market and has no bearing whatsoever on cost of production of crude oil. Crude oil is a commodity item and the price of the commodity items are determined based on various market forces viz. demand and supply, competitors activities. Govt. policies, etc. and these prices bear no co-relation to the costs incurred by the appellant. (b) Unjust enrichment inapplicable if price fixation is beyond control of appellant. (c) Unjust enrichment not applicable if collection of tax is illegitimate. (v) that they relied upon the following case laws in their defence : (i) Girish Foods and Beverages (P) Ltd. v. C.C.E., Pune - 2007 (211) E.L.T. 388 (Tri.-Mumbai) (ii) Oswal Chemicals and Fertilizers v. C.C.E., Guwahati - 2004 (172) E.L.T. 216 (CESTAT-Delhi) (iii) Mcnally Bharat Engineering v. C.C.E., Ranchi - 2004 (168) 249 (CESTAT - Kolkata) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended by the appellant or under the category Mining service as alleged by the Department. 5.1 I find from the records that the refund claim was rejected by the Lower Adjudicating Authority on the following grounds : (i) part of the claim hit by time-bar; (ii) the service provider had not raised the classification dispute; (iii) no documentary evidence had been produced by the appellant to show that the incidence of tax has not been passed on to any other person; (iv) Indian National Shipowners Association case had not attained finality; (v) disclaimer certificate from M/s. Aban had not been produced by the appellant. 5.2 The appellant s main contention is that the Service tax on supply of rig is taxable only w.e.f. 16-5-2008 under the category Supply of tangible goods service and that they had been erroneously charged by M/s. Aban Offshore Ltd. under Mining Service and the same was paid by them erroneously for the period 1-6-2007 to 15-5-2008 under the said category; and hence they are eligible for the refund. 5.3 Now the question to be answered is whether the activity of supply of floating rigs is covered under Mining Service or Supply of tangible goods service. Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of supply of tangible goods services would get attracted when a supply of tangible goods including machinery, equipment and appliances is made for the use of service recipient. From the above definition, I find that the taxable service covers where tangible goods are supplied without transferring possession and effective control thereof though the goods are made available to the service recipient for use. In the instant case, M/s. Aban had supplied floating rigs to the appellant for post extraction activity without transferring possession and effective control. 5.5 In the grounds of appeal as well as during the hearing, the appellant had relied on the judgment in the case of Indian National Shipowners Association v. Union of India - 2009 (14) S.T.R. 289 (Bom.) by the Hon ble High Court of Bombay, which was later affirmed by the Hon ble Supreme Court in the case of Union of India v. Indian National Shipowners Association - 2011 (21) S.T.R. 3 (S.C.), the relevant portion of the case is quoted below for reference :- Mining service - Supply of Tangible Goods service - Marine logistics services - Offshore support vessels, marine construction barges and harbour tugs provided to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 94. [paras 38, 48]. Mining service - Supply of Tangible Goods service - Service tax liability during period from 1-6-2007 to 15-5-2008 - Appellant contending that members of respondent-association liable to Service tax for impugned period under Mining service though liable under Supply of Tangible Goods service after amendment from 16-5-2008 - Scope of work relating to providing vessel - Nature of work in terms of contract with ONGC indicating that none of the work can be strictly said to be service in relation to mining of mineral, oil or gas - Nature of work as per records not even remotely connected and included within expression found in Section 65(105)(zzzy) of Finance Act, 1994 - Impugned order of High Court affirmed on facts leaving question of law open to be considered by High Court at length in appropriate case - Sections 65(105)(zzzy) and 65(105)(zzzzj) ibid. [paras 3, 4, 6, 7] From the above decision of the Hon ble High Court of Bombay, which was later affirmed by the Supreme Court, it can be safely concluded that supply of floating rigs will not attract service tax under the category of mining service but only under supply of tangible goods service . 5.6 Dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted period. Hence, the appellant has erroneously paid the service tax for the disputed period and the appellant is right in claiming the refund. 6. I find from the records that the refund claim was rejected partially on the grounds that it is hit by time limitation. The remaining part of the claim is rejected on the grounds as mentioned in the brief facts of the case. The appellant had submitted the following documents with their submissions filed during personal hearing : 1. Disclaimer certificate dated 1-3-2011 from M/s. Aban Offshore Ltd. 2. Expert opinion dated 21-2-2011 on floating production system obtained from the professors of Indian School of Mines, Dhanbad. I find that the above documents were not the subject-matter of the adjudication proceedings. I also find that the appeal filed by the Department with Hon ble Supreme Court against the judgment of the Hon ble High Court, Bombay in the matter of Indian National Ship Owners Association and Others v. Union of India had attained finality which is reported vide 2011 (21) ST.R. 3 (S.C.) wherein impugned order of the High Court affirmed on facts leaving question of law open to be considered by High Court at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1994. [paras 3, 6, 7, 13, 14, 15, 16]. Way back in 2009 as Commissioner (Appeals) Pune-II, I have taken a very similar decision in the case of Amit Spinning Industries Ltd., reported in 2009 (246) E.L.T. 782 (Commr. Appl.) wherein it was held as follows : Refund - When any amount is not legally payable to Government, it becomes pre-deposit and thus there need not be any elaborate procedure for claiming refund - Appellant has gone out of Central Excise net and not paying any excise duty on his final product and under such circumstances, whatever amount is lying in his PLA account, has to be paid back summarily without any hesitation. [paras 4.3, 5] From the above judicial pronouncements, it is clear that where the tax was collected without authority of law, the time limit under Section 11B of the Act, is not applicable. Hence I hold that the appellant are eligible for the refund claimed. 7. As per the above discussions and the conclusions arrived at after going through the evidences produced before me, I hold that the activity of supply of floating rigs by M/s. Aban Offshore Ltd. to the appellant for post extraction work is squarely covered under Supply of tangible g ..... 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