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2024 (4) TMI 11 - AT - Service TaxClassification of service - Business Auxiliary Services or Mining of Minerals, Oil or Gas? - activity/service rendered by the appellant in raising iron ore to the Appellant under agreement dated 03.05.2003 - imposition of penalty - HELD THAT:- It is clear that the agreement entered into by the appellant comprises host of activities/services referred to and necessary and incidental to mining operations within the mining area mentioned in the said Agreement. Broadly, the activity comprises of exploration, development, excavation, extraction, grading, screening, sizing, sorting and stacking, etc. Also, the Appellant is required to built and maintain necessary infrastructure by way of building internal roads, office premises etc. within the mining area in carrying out the mining activities. For undertaking all the activities, the appellant received consideration of Rs.188/- per metric tonne of calibrated iron ore and Rs.25/- per metric tonne of iron ore fines raised and generated, thus, the activities undoubtedly indicate that the appellant has provided services which are akin to the category of ‘mining of minerals’ service inserted in the Finance Act,1994 with effect from 1.6.2007. The activities undertaken by the appellant are composite in nature and involves not merely production of minerals but services before production and after production of the said minerals including building and maintenance of necessary infrastructure; hence, rightly covered under the scope of mining operations and not under ‘Business Auxiliary service’. The Tribunal following the circulars and the judgments rendered earlier in the case of M/s. G. S. Atwal & Co. Engineers Pvt. Ltd. vs. CST, Kolkata [2023 (6) TMI 310 - CESTAT KOLKATA] considering and comparing the three competing services viz. Cargo Handling service, Business Auxiliary Service and Site Formation and clearance, excavation and demolition services with that of ‘mining services’ held that the activities carried out by the appellants, which are akin to the services rendered by the Appellant in the present case, fall under the scope of mining operations, hence, leviable to tax w.e.f. From 01.06.2007. The issue involved in the present case is, whether the host of activities/service carried out by the appellant under the Raising agreement, result in the nature of service mentioned under clause(v) of Business Auxiliary Service or ‘Mining of Mineral, Oil or Gas’ services. Also, the Ld. A.R for the Revenue made an attempt to distinguish the case laws referred by the appellant submitting that the nature of competing service involved in these cases is different i.e., Site formation service, cargo Handling Service etc. hence not applicable to the present case. The said argument is devoid of merit. Reading the circulars and relevant entries, it is clear that the services provided by the appellant squarely fall under the category of mining services and in all these cases it has been consistently held that Mining service involves a host of activities and rendered under a composite contract which cannot be divided into individual components/service for levy of service tax on each service separately; and observed all these activities combined are rightly classifiable under ‘Mining of Mineral, Oil or Gas’ service leviable to service tax w.e.f 01.6.2007. The impugned Order is devoid of merit and accordingly set aside - Appeal allowed.
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