9911796707
TMI Blog2010 (4) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... of recovery of demand. (4) An amount of Rs. 2,91,47,921/- towards the demand raised was appropriated being supported by TR-6 challans. (5) Penalty of Rs. 1,000/- under Section 77 of the Finance Act, 1994 for each return period for the period relating to 1-12-2004 to 31-10-2007 was levied for various omissions and commissions. (6) Penalty of Rs. 200/- per day or an amount calculated c 2% per month whichever was higher, for the impugned period became realisable subject to limiting of the penalty to the amount of Service Tax payable under Section 76 of the Finance Act, 1994. (7) Penalty of Rs. 27,47,65,531/- under Section 78 of the Finance 1994 for suppressing/concealing the value of taxable services with the intent of evading payment of Service Tax was imposed. 2. Order of Adjudication was outcome of show-cause notice dated 30th May, 2008 making following allegations: (i) The assessee had rendered services of 'shot hole drilling and seismic job charges' failing under the category of taxable services 'survey & exploration of minerals' during the period 1-12-04 to 31-10-07 and Service Tax to the tune of Rs. 39,81,19,699/- and Cess/SHEC of Rs. 84,95,897/- remained unpaid. (ii) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmined value thereof, thoroughly examining value of taxable service objectively and such value was considered to be Rs. 2,68,31,65,692/- being collected and there was billing amount of Rs. 3,54,25,53,006/-. 3.2 So far as the second allegation was concerned, activity carried out was held to be classifiable under category of "survey and exploration of minerals". 3.3 Third allegation was dealt by the Authority in para-20 of the impugned order bringing the service provided on behalf of the ONGC falling under sub-section 65(19)(b) of the Finance Act, 1994 and determined value of taxable service to be Rs. 2,34,59,683/-. 3.4 So far as the fourth allegation was concerned, the Authority below held that service provided was classifiable under the category of "mining" and valuation thereof was made to be Rs. 10,57,39,272/- for taxation and that was dealt by para-21 of the order. 3.5 Ld. Commissioner analysed sample agreements before him and discarded plea of non taxability of certain activities raised by the appellant and made out a chart at page 48 of the impugned order (Page - 116 of appeal folder) for determining tax liability in respect of each activity carried out. In respect of acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pression "in relation to" following the decision of the Hon'ble High Court of Bombay in the said case in terms of paras 46 & 47 of the judgment. (D) If at all there may be liability that shall be reduced to Es. 3.5 crores and the appellant having been registered under law under the category of mining of mineral and exploration of gas from December 31-10-07 (page 24 of the order-in-original) is only liable to tax from 1-6-07. For the normal period of liability the appellant should not be put to undue hardship. (E) The appellant's work of drilling the shot holes at the predetermined points is covered under the taxable category of 'site formation and clearance service'. (F) The appellant having discharging its liability for the normal period i.e. March, 2007 onwards under the category of mining services of recovery of the demand be stayed during pendency of appeal. (G) Extended period of limitation cannot be invoked in the present case. Demand is time-barred. No interest is chargeable/penalty imposable for no liability arose. (H) No penalty is payable under Section 76 since the appellant was not liable to pay Service Tax on composite contract entered into with oil under 'survey a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h an activity shall fall within the category of "Mining Services'. Reasons were also given by the id. Adjudicating Authority under para 21.1.1 at page 46 of the order-in-original. He relied on the CBEC clarification provided by F.No. 334/1/2007-TRU, dated 28-2-07 (Clauses 6.2 & 6.2.1). He took note of the activity carried out in relation to oil field industry and to oil or gases well which remained undisputed and discarded plea of the appellant holding that such activity were carried out prior to mining activity and the plea that the activity did not result in actual extraction of oil and gases was considered immaterial. 5.6 So far as the valuation of the services is concerned, id. Authority examined the evidence before him and ascertained value of taxable service. The pleading of cum-duty value of the service was considered by the Id. Adjudicating Authority and he held that such benefit shall be available to the assessee. 5.7 So far as time-bar aspect is considered, ld. Commissioner held that the proceeding was not barred by limitation in view of suppression of fact noticed by him for the specific reason of unearthing of loss of Revenue consequent upon audit done by Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follow for the loss of Revenue. Revenue's prayer is that if pre-deposit is not ordered that shall make Revenue to suffer and the appellant shall unduly be enriched. 6. Heard both sides and perused the record. 7. We have carefully heard both sides on different issues raised by them. Principally, the nature of activity carried out by the appellant seeks thorough scrutiny and examination by elaborate hearing in the course of regular appeal hearing to ascertain the activity whether was mining or survey and exploration of Mineral Service introduced from 1-12-2004. Similarly, whether drilling of short holes shall be site formation activity needs thorough scrutiny. However, the manner of examination done by ld. Adjudicating Authority clearly depicts his application of mind and his anxiety to scrutinise the activity of the appellant. He examined nature of the contracts executed by the appellant. He has tried to find out various technicalities involved in several activities carried out by the appellant. There is no casual approach of examination made by the ld. Adjudicating authority. But interpretation of law is partly involved in respect of the activities carried out as against the entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Oil and Minerals. Service of Gas compression was held to be covered under the service of 'Business Auxiliary Service' and work over Operation & Development Well Drilling was held to be covered under the service of 'Mining of Oil & Minerals'. 8.3 Apart from other disputes, the allegations were mainly three fold (1) whether the impugned services shall fall in the ambit of taxable services i.e. 'Mining services' under the Finance Act, 1994 w.e.f. 1-6-07 in terms of Section 65(105)(zzzy) or the services shall be taxable as exploration of minerals. Sec ondly, whether there was any Business Auxiliary Services provided and thirdly whether the proceeding is time barred. 9. Having heard both sides on various contentions afc prima facie we are of the view that although interpretation of law is involved in this case and a detailed examination of fact is called for, balance of convenience does not tilt in favour of assessee and we were unable to find any scope to grant full waiver of pre-deposit to protect interest of Revenue. Keeping in view the ratio laid down by the Apex Court in the case of Dunlop India Ltd. v. CCE reported in 1985 (19) E.L.T. 22 and Benara Valves. v. CCE reported in 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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