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2024 (4) TMI 36 - AT - Service TaxClassification of service - classification of activities of wireline logging and perforation - period from December 2003 to November 2004 under the category of technical testing and analysis (TTA services) - HELD THAT:- The activities undertaken by the appellant do not involve testing or analysis. It is the data procured by the appellant that is communicated to ONGC which, thereafter, independently analyses the same for determining the course of action. The function required to be performed by the appellant is strictly limited to the scope of measuring different parameters related to the oil rigs, and additionally, perforation, which has no relation to testing and analysis services. The services like wireline logging, perforation and other wireline related services involving mechanical jobs like cutting, puncture, plug/packer setting, cable splicing, etc., which were undertaken by the appellant at the time of drilling an oil well are integrally connected with the mining of oil or gas and have a direct nexus with the drilling of a well. Thus, these activities would be covered by the taxable category of ‘mining service’ w.e.f. 01.06.2007. Reliance has been placed on the decision of the Bombay High Court in INDIAN NATIONAL SHIPOWNERS' ASSOCIATION VERSUS UNION OF INDIA [2009 (3) TMI 29 - BOMBAY HIGH COURT], wherein it was held that though the phrase ‘in relation to’ is of wide import but the context in which the same is used has to be kept in mind and that the services rendered by a person must have a direct or a proximate relation to the subject matter of the taxing entry. The Bombay High Court also held that the context in which the words ‘in relation to’ are used has to be borne in mind to examine the extent of the scope of an entry which may be of wide amplitude. The issue that needs to be decided is whether the activity carried out by the appellant would fall under TTA services prior to 01.06.2007. According to the appellant, the said activity will be covered under the scope of mining related services under section 65 (105)(zzzy) of the Act w.e.f. 01.06.2007. The contention is that on introduction of such a service from 01.06.2007, there was no amendment in the definition of TTA services and, therefore, the activity covered under a new category of mining related services cannot be classified under the existing category of TTA services prior to 01.06.2007. Thus, it has to be held that as the activity undertaken by the appellant w.e.f. 01.06.2007 pertains to mining services made taxable under section 65(105)(zzzy) of the Finance Act, service tax under TTA services cannot be charged from the appellant prior to 01.06.2007. Thus, the activities undertaken by the appellant cannot be classified under ‘technical testing and analysis’ service (TTA services) as defined under section 65(106) of the Finance Act and deserve classification under ‘mining services’ made taxable under section 65(105)(zzzy) of the Finance Act w.e.f. 01.06.2007 - impugned order set aside. Appeal allowed.
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