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TMI Blog2023 (7) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... orks contract and held that there are really two agreements, though there is a single instrument embodying them, and the power of the State to separate the agreement to sell from the agreement to do work and render service and to impose a tax thereon cannot be questioned. It is clear from the aforesaid observation of the Supreme Court that in a case when two separate activities are undertaken even though the same may be provided under a single contract, they would have to be treated as two separate activities and taxed accordingly. In M/S. PRAHLAD RAI COMPANY VERSUS CCE, JAIPUR [ 2017 (12) TMI 1380 - CESTAT NEW DELHI] the dispute was whether the activity of mobilizing of equipment, removing of top vegetation, over burden, drilling, blasting, excavating boulders, sorting and sizing of boulders, crushing and further transportation would be classifiable as site formation services or mining services . The Tribunal held that where there is excavation or raising of ore, the same would not be classifiable under site formation service. The activity of excavation of boulders would also not be a service simpliciter, as it includes further processes involved to make the boulders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrying out the activities of overburden removal, mining the ore from the bottom of mine, cutting the rocks by drilling/blasting and raising of ore and the appellant charged for such services as per the rates given under the respective contracts. The appellant also charged separate amount for the services rendered towards transportation of mined material to respective plants, crushers or other designated places and transportation of reject stones to dump sites at a place distant from the mines. To substantiate this plea, the appellant placed reliance on the invoices raised by the appellant for the services provided by it. The appellant further contends the mining activity provided by the appellant ceased as soon as the mineral was excavated. Thereafter transit slips were prepared by the appellant and the goods were transported to plants, crushers or other designated places, located at a place distant from the mines. This activity of transportation, according to the appellant took place on public road and specific mention of the vehicle number and weight has also been mentioned in the transit slip issued by the appellant. 4. With effect from 01.06.2007 (i.e. after the introduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Separate rates have been mentioned in the contract for the two activities. 403584323 49883022 29526041 46151720 TANDA Clinker contract dated 09.05.2008 Scope of work includes only unloading from wagons and reloading into trucks and then transportation from railway siding to grinding unit. Rates for unloading from wagons and reloading into trucks and rates for transportation are separately given in the contract. 60246926 7446520 SIDHI Cement contract dated 22.02.2009 Scope of work includes both mining and transportation activity. Separate rates have been mentioned in the contract for the two activities. 110390589 13644277 NIGRIE contract dated 14.03.2011 Scope of work includes both mining and transportation activity. Separate rates have been mentioned in the contract for the two activities. 450000 55620 BEOHARI contract dated 06.09.2011 Scope of work includes only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxable value ST payable ST considered as paid ST demand Taxable value ST payable ST paid details Difference in St paid as per noticees/ department Difference in St paid as per noticees/ department Cash Credit Total a b c d e=d-c f g h i j K=j-h Dalla 403584323 49883022 .. .. 207763768 25679602 3076212 .. .. 25679602 .. 24203420 Tanda 60246926 7446520 .. .. 24888449 28755814 .. .. 3076212 .. 4370308 Sub-total A 463831249 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice tax, the department only considered the payment of Rs. 2,95,26,041/- made in cash, as is evident from the above table, and service tax of Rs. 1,75,77,991/- paid through CENVAT credit was not considered. Thus, out of the total demand of Rs. 4,61,51,720/- proposed and confirmed in the impugned order, service tax of Rs. 1,75,77,991/- having been paid through CENVAT credit has to be deducted and the demand has to be limited only to the extent of Rs. 2,85,73,729/-. This aspect was not considered in the impugned order though it was pointed out by the appellant in the reply filed to the show cause notice. 13. It has also been pointed out by the learned counsel for the appellant that out of the total taxable value of Rs. 61,22,79,616/- on the above six contracts, the appellant had already paid service tax of Rs. 4,71,04,032/- on the taxable value of Rs. 38,11,00,584/-. Further, such taxable value of Rs. 38,11,00,584/- pertains to the values taken with respect to Sidhi, Nilgrie, Beohari and Bokaro site contracts. Therefore, according to the appellant service tax has duly been discharged with respect to Sidhi, Nilgrie, Beohari and Bokaro site contracts and no demand was sustainable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 70,309 2,85,73,729 15. It is clear from the above table that with respect to Dalla site contract, out of the total receipts of Rs. 40,35,84,323/-, receipts of Rs. 20,77,63,768/- pertain to mining activity on which service tax has already been discharged by the appellant under mining services. The balance receipts of Rs. 19,58,20,555/- pertains to the transportation activity. 16. Similarly, with respect to Tanda site contract, out of the total receipts of Rs. 6,02,46,926/-, receipts of Rs. 2,48,88,449/- pertain to loading/unloading charges, on which service tax has already discharged by the appellant under cargo handling services. The balance receipts of Rs. 3,53,58,477/- pertain to the transportation activity. 17. With respect to the balance receipts pertaining to transportation activity, the bifurcation is as under: Nature of the transportation activity Dalla Tanda Total Receipts ST payable Transportation of material mined by the service recipients (i,e. mine owners) 7,89,37,255 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire and indivisible, as the contracts of the respondents have been held by the learned Judges of the Court below to be. The several forms which such kinds of contracts can assume are set out in Hudson on Building Contracts, at page 165. It is possible that the parties might enter into distinct and separate contracts, one for the transfer of materials for money consideration, and the other for payment of remuneration for services and for work done. In such a case, there are really two agreements, though there is a single instrument embodying them, and the power of the State to separate the agreement to sell from the agreement to do work and render service and to impose a tax thereon cannot be questioned and will stand untouched by the present judgment. 20. It is clear from the aforesaid observation of the Supreme Court that in a case when two separate activities are undertaken even though the same may be provided under a single contract, they would have to be treated as two separate activities and taxed accordingly. 21. This is what was also observed by the Tribunal in the case of the appellant in Rashleela Enterprises Pvt. Ltd. vs. CCE, Jaipur - I [2019 (2) TMI 675 - CEST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsported more mineral than what they have mined. 16. In this view of the matter, we hold that the concept of composite service is not applicable and our findings are also fortified by the precedent ruling of this Tribunal in the case of M/s. Jain Carrying Corporation - 2014 TIOL3069-CESTAT-DELHI, which has been affirmed by the Apex Court reported at 2015 (39) STR J 370 (SC). 17. Accordingly, we allow the appeal and set aside the impugned order. The appellants are entitled to consequential l benefits, in accordance with law. 22. It has been pointed out by learned counsel for the appellant that the aforesaid decision has attained finality as no appeal was filed by the department. This fact has not been refuted by the learned authorised representative appearing for the department. 23. Reference can also be made to the Circular dated 12.11.2007 issued by the Central Board of Indirect Taxes and Customs after the introduction of mining service under the Finance Act, w.e.f. 01.06.2007. The said Circular clarifies that services such as handling and transportation of mineral from pithead to specific locations would be a post-mining activity and would be taxable under cargo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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