TMI Blog2018 (7) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... self and that the same was entered into with the sole objective of justifying the financial burden upon the appellant. The activity carried out by the appellant was the mining activity which has been identified as taxable activity only beyond 01.06.2007. Hence, the demand for the period prior the said date is absolutely not sustainable - Reliance is also placed on the Circular No. 232/2/2006 E 1-4 dated 12.11.2007 which says that activities as that of excavation, drilling, removal of overburdens, etc. are the essential integral processes and are the part of mining operations and since the mining activity is taxable w.e.f. 01.06.2007, prior to this date such activities being part of mining operations itself are not subject to service tax and as such no service tax is leviable on such activities prior to the said date. The activities for the period beyond 01.06.2007 till 31.03.2008 - Held that:- It is observed that though the activities of appellant are no doubt the mining activities but it is observed from the impugned Show Cause Notice that the same has not been so alleged - In Show Cause Notice, the Department has alleged the said activity as that of site clearance. In such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act was being raised. The said liability has been confirmed by the Order under challenge. The Adjudicating Authority has confirmed the demand of ₹ 23,40,304/- alongwith interest and the penalties as mentioned in the Order itself. 3. We have heard Mr. S.K. Pahwa, Advocate representative of the assesse and Mr. Sanjay Jain, D.R., representative of the Department. 4. It is submitted on behalf of the appellants that they entered into an agreement with the State Government of Rajasthan (RSMML) for mining lignite in the mines of Mata Sukh and Kasua Village in the year 2003. It is during the said mining activity that a water aquifer was noticed having much greater volume of water than the one usually seen in the area to be mined and are often cleared by the contracting party itself. It is impressed upon that keeping in view the said higher volume of that aquifer that a separate agreement was entered into between the appellant and the State Government to clear that water so as to complete mining activities in the said mine and as such the activity of depressurising the impugned water aquifer is as much a mining activity as was awarded to appellant under the contract dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of saleable demand from Kasnau Mines. Clause 2.1.5 of the agreement shows that the area bound by laws/ the impugned agreement is Kasnau Mata Sukh Mines, being the mine falling in the boundary of both the villages. Perusal of Clause 4.2.1 which is about the description of work perusal makes it clear that the agreement as was executed between the parties in the year 2003 was for conducting mining activity by the appellant in the mines owned by the RSMML. This mining activity has been brought in the tax net w.e.f. 01.06.2007 onwards only. Perusal of Show Cause Notice dated 28.09.2010 shows that the period involved is w.e.f. 25.08.2005 to 31.03.2008. Though the Show Cause Notice alleged the said activity as that of Site Formation and Clearance, Excavation and Earth Mining and Demolishing Services as per Show Cause Notice dated 28.09.2010, it was for the Department to prove. 8. The mooted question of consideration therefore is whether the impugned activity falls under the definition in Section 65(97a) which is taxable under Section 65 (105) (zzza). Section 65 (97a) site formation and clearance, excavation and earth moving and demolition includes: (i) drilling, boring and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant was the mining activity which has been identified as taxable activity only beyond 01.06.2007. Hence, the demand for the period prior the said date is absolutely not sustainable. Resultantly, we set aside the same. Reliance is also placed on the Circular No. 232/2/2006 E 1-4 dated 12.11.2007 which says that activities as that of excavation, drilling, removal of overburdens, etc. are the essential integral processes and are the part of mining operations and since the mining activity is taxable w.e.f. 01.06.2007, prior to this date such activities being part of mining operations itself are not subject to service tax and as such no service tax is leviable on such activities prior to the said date. 11. Now coming to the activities for the period beyond 01.06.2007 till 31.03.2008, it is observed that though the activities of appellant are no doubt the mining activities but it is observed from the impugned Show Cause Notice that the same has not been so alleged. In Show Cause Notice, the Department has alleged the said activity as that of site clearance. In such circumstances, the principle is well settled that the classification of taxable service which is not alleged in the ..... 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