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Chandrika Environ Versus Commissioner of Central Excise, Customs and Service Tax Visakhapatnam-I

2015 (11) TMI 238 - CESTAT BANGALORE

Waiver of pre deposit - Cleaning Service and Site Formation and Clearance, Excavation and Earthmoving and Demolition Service - Held that:- Appellant was engaged in restoration of waste pits in the oil extraction area of M/s. Cairn Energy and what they are doing physically is to clean the pits and bring them into a condition in which they are usable again. Therefore what the appellant is undertaking the activity of cleaning the pits of waste, oil etc and therefore the activity is clearly cleaning .....

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the pits by removing oily and non oily waste completely and thereafter put in fresh soil (back filling). The main activity is not Site Formation since the drilling site is already existing and what the appellant to undertake is to remove the waste from the existing drilling site and clean up all the wastage and bring it back to the original condition. The Cleaning Service definitely covers the activity. Therefore on merit we do not consider that appellants have made out a case. - Partial stay gr .....

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th M/s. Cairn Energy India Pvt. Ltd. for cleaning and restoration of the drilled areas and pits used for oil exploration, entertaining a view that appellant should have paid service tax treating the service provided as Cleaning Service proceedings were initiated for demanding service tax on the said service. As a result of the proceedings service tax of ₹ 23,37,761/- (Rupees Twenty Three Lakhs Thirty Seven Thousand Seven Hundred and Sixty One only) has been demanded with interest for the p .....

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learned counsel that the work undertaken by the appellant falls into the category of other works/site formation/repairs. He submits that they have undertaken the work under Works Contract system. It was submitted that appellants wanted to opt to pay the tax under Works Contract (Composition Scheme for Payment of Service Tax) Rules 2007 and pay tax as per the scheme. It was also submitted that appellant had not availed any cenvat credit of duties paid on inputs/input services. It was also submitt .....

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d that according to their calculation they are liable to pay an amount of ₹ 6,39,753/- (Rupees Six Lakhs Thirty Nine Thousand Seven Hundred and Fifty Three only) which has been paid by them in 2010 itself. He submits that the same may be treated as sufficient for the purpose of pre-deposit and pre-deposit of balance dues may be waived and stay granted. 4. In addition to the above submission he also submitted that the work undertaken by them cannot be considered as Cleaning Service but can .....

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il extraction area of M/s. Cairn Energy and what they are doing physically is to clean the pits and bring them into a condition in which they are usable again. Therefore what the appellant is undertaking the activity of cleaning the pits of waste, oil etc and therefore the activity is clearly cleaning only. 6. Before we proceed further it would be appropriate to take note of the definition of Cleaning Service as per 65(105)(zzzd) and Section 65(105)(24b). Cleaning Activity means cleaning, includ .....

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of the order-in-original which is reproduced below for better appreciation. Method of waste collection and disposal: Liquid/solid waste with oil contamination: The waste pits and mud storage pits at the well sites are covered with solid as well as liquid waste. At some places oil is mixed up with the sludge and liquid waste. Before removing the solid waste priority has to be given for oily surface at the top of pit which has to be removed by following method: Skim the top surface of the liquid b .....

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oil to the barrels, if required water may be separated from the barrels by means of mechanical means. The process to be repeated till all the oil layer has been removed. The de-oiled liquid will be examined by CEIL/CEIL engaged agency for checking the oil content in the remaining liquid. Upon approval from the testing agency, the de-oiled liquid shall be pumped to the water pit (already at sites) and this may be used for consolidation/compaction of the soil which is required during pit falling o .....

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learned counsel submitted that while he agrees with substantial portion of the extract, he submitted that the appellants were required to fill up the pits with soil. According to him this is the main activity undertaken by the appellant and therefore the appellant was actually undertaking the service of Site Formation. According to him the filling up of the pits with fresh soil and restoring the pit to the original condition has to be taken as the main activity and therefore the work undertaken .....

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