Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2023 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (7) TMI 201 - AT - Service TaxClassification of service - mining service or not - activity of transportation of limestone and reject undertaken by the appellant - period involved is from July 2013 to December 2014 - HELD THAT:- The contracts in question entered by the appellant with the mine owners are not composite in nature as the same provide for separates activities to be undertaken by the appellant at separate rates. A perusal of the contracts leaves no manner of doubt that the appellant had undertaken the activity of mining and transportation separately, for which separate charges were paid to the appellant by separate invoices. Thus, when the contracts categorise the activity of mining and transportation as two separate activates having no nexus with each other, then these two activities have to be treated as two separate services. Reference can be made to the judgment of the Supreme Court in THE STATE OF MADRAS VERSUS GANNON DUNKERLEY & CO. (MADRAS) LTD. [1958 (4) TMI 42 - SUPREME COURT]] wherein this Supreme Court emphasised the nature of an indivisible works 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 fit for client usage. Thus, the same would be classifiable under ‘business auxiliary service’ and not under ‘mining service’. The impugned order dated 01.02.2017 passed by the Commissioner, therefore, cannot be sustained and is set aside - The appeal is, accordingly, allowed.
|