TMI Blog2010 (4) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance Act, 1994 read with the then Section 73(a) of the said Act was invoked. (2) Service Tax amounting to Rs. 29,32,05,565/- Cess and SHEC of Rs. 66,63,060/- was levied under Section 73 read with Sections 66, 67 68 of the said Act read with Section 91 read with Section 95 of the Finance (No. 2) Act, 2003 for Cess and Section 140 read with Section 136 of the Finance Act, 2007 for SHEC. (3) Interest under Section 75 of the Finance Act, 1994 became recover able till the date 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 serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce was well covered within the four corners of "Survey Exploration of Mineral Service" which was introduced from 1-12-04. Service Tax amounting to Rs. 1,08,76,580/- and Cess amounting to Rs. 2,17,532/- became le viable on such value of taxable services provided and realised during the period 1-12-04 to 31-10-07. Interest on the amount in default became recoverable from the assessee as per Section 75 of the Finance Act, 1994. In respect of shot hole drilling, learned Adjudicating Authority determined 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing the judgment of the Hon'ble High Court of Bombay in the case of Indian National Shipowners' Association v. Union of India reported in 2009 (14) S.T.R. 289 (Bom.). Similarly, the expression "in relation to" used in law should be read as meaning 'direct' or 'proximate' relationship without any wide interpretation following paras 45 47 of the said judgment. Accordingly, a service remotely connected cannot be included in entry (zzzy) of Section 5(105) to bring the remote services with the help of expression "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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parts etc. and scope of work encompassed total engineering supply, transportation, installation, construction, commissioning, operation and maintenance of the suitable compressor plant complete in all respect on charter hire basis. But the assessee failed to provide comprehensive details regarding realisations of considerations. 5.5 So far as the activity of 'Work Over Operations and 'Development Well Drilling' carried out by appellant was concerned, it was the opinion of the ld. Adjudicating Authority that such 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al is distinct activity by its nature. All incidental and ancillary activity carried out to achieve the ultimate object of exploration of oil and gases are to be brought to the fold of principal activity of exploration of oil and minerals since those were essential activities giving access to principal activity of extraction of oil and minerals. Therefore the authority examining the issues threadbare by a speaking order raised demand at page 58 of the order-in-original appropriately with the penalties and interest to 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. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eum Corporation Ltd. Etc. through different terms of contract. They were paying Service Tax on three categories of services mentioned in Serial No. 1 to 3 of column (3) of the Table depicted above and had taken Service Tax registration for the said services only. They were not paying Service Tax on other seven categories of services as mentioned under Sl. Nos. 4 to 10 in column (2) of the Table and as observed by learned Adjudicating Authority. However, out of the seven non-taxable services claimed by appellant, five of such services (Sl. No. 4 to 8 of Col-2 of Table) were found to be taxable under law by Adjudicating Authority. The service of Shot Hole Seismic job services for Data Acquisition were held to be covered under the services of Survey Exploration of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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