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2016 (2) TMI 873 - AT - Service TaxClassification of services - Levy of interest and penalty - It merely pleaded that there was no malafide intention in not remitting the tax and therefore, neither interest nor penalty should be levied. - Held that:- As the validity of the classification of the service is a factor integral to the legitimacy of levy and collection of tax, we have allowed the miscellaneous application for raising additional grounds and we consider the factual matrix of the Appellant’s rendition of service in the context of the two competing services ‘ ‘site formation etc.’ and ‘mining’ service. On a true and fair construction of the matrix and bouquet of service provided by the Appellant, considered in the light of the two taxable services i.e. ‘site formation’ on the one hand and ‘mining’ on the other, and applying the provisions of Section 65A of the Act, the conclusion is compelling that since the essential character of the services provided by the Appellant is mining of Lignite and removal of Over Burdens is an activity incidental to facilitate and effectuate mining of lignite and as the quantum of lignite mined is also, under the schedule of quantities of the agreement between the Appellant and GHCL is predominantly, the contract should be considered in essential character as a contract for mining of lignite. On this reasoning, the service provided by the Appellant to GHCL clearly and undisputedly falls within the ambit of mining service and cannot be classified as “site formation etc” service. Demand of service tax with interest and penalty set aside.
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