TMI Blog2020 (1) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses relating to mining and transportation in the ratio 40:60 while making payments. The contracts and supplement over the years were in identical manner - Thus it is apparent that the contracts undertaken by the appellant are composite contracts involving excavation and transportation of iron ore. The terms of the contract in the instant case being categorical and the division of the amount payable in a ratio appears to be only for the convenience of the parties involved and therefore it cannot be concluded that the services rendered by the appellants are under two different heads. Such an artificial bifurcation is not acceptable. This Bench of the Tribunal in the case of M/S. HAZARIBAGH MINING ENGINEERS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS SERVICE TAX, BBSR-I [ 2016 (12) TMI 1131 - CESTAT, KOLKATA] having gone through the scope of the contract therein have concluded that the work undertaken by the appellants therein amounted to Mining Services - In the instant case also the learned Sr.Counsel for the appellant other than merely showing that there is a division of payment could not produce any documentary proof so as to conclude that the contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Commissioner vide Order-in-Original No.70/Commr/ST/Kol/2011-12 dated 31.01.2012 wherein Service Tax of ₹ 2,90,48,791/- was confirmed with equal penalty and interest. Hence this appeal. 2. Learned Sr.Counsel for the appellant submits that the original agreement was dated 24.03.2005 and similar agreements were entered in respect of subsequent financial years 2006-07 to 2009-10; during 2005-06 and during 2006-07, the appellant did not charge or collect any consideration towards raising/shifting of iron ore and started charging the same from financial year 2007-08 onwards. Learned Sr.Counsel submits that that substantial portion of the activities comprised in transportation of iron ore therefore the appellant entered into the supplementary agreement from 2007-08 whereby the consideration receivable by the appellant was split into mining charges(40%) and transportation charges (60%). The learned Sr.Counsel submits that Service Tax on mining activities were levied w.e.f. June 1, 2007 and the appellant has started paying Service Tax under the category of Mining Services in respect of 40% of the consideration they received. In respect of balance 60% of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R. 496 (T)] Affirmed by the Supreme Court in Commissioner Vs. R.K.Transport Company [2018 (16) G.S.T.L. J 78 (S.C.) Learned Sr.Counsel, however, fairly concedes the confirmation of Service Tax to the extent of ₹ 12,23,964/- for the period April and May 2007 under Site Formation and Clearance Service . Learned Sr.Counsel also relied upon Hon ble Apex Court s judgement in the case of Continental Foundation JT. Venture Vs. Commissioner of C.Ex., Chandigarh-I as reported in 2007 (216) E.L.T. 177 (S.C.). 5. The learned Authorized Representative for the department reiterates the findings of the Order-in-Original and submits that the case law submitted by the appellant is not applicable as the operations undertaken by the appellant is clearly falling under Mining Services and it cannot be artificially split into Mining Services and GTA Services . He relies upon the case of Hazaribagh Mining Engg. Pvt.Ltd. [2017 49) S.T.R. 289 (Tri.-Kol)]. 6. Heard both sides and perused the records of the case. 7. We find that the appellants are undertaking the activity for the lease holder in ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n agreed upon that out of the above agreed rate it has been felt necessary to bifurcate the expenses relating to mining and transportation as these are the main major heads of operating expenses. After through discussion it has now been agreed upon that the contractor however will have to restrict the mining and transportation billing to the ratio of 40:60 (Approx.) and henceforth the payments of the bills will be made according to this supplemental agreement. In view of the above the implementation of service tax will be as under. -For raising activities service tax shall be payable by the contractor -For Transportation and other Logistics service tax shall be payable by the Leaseholder All other terms and condition will remain unchanged and binding upon both the parties. 8. On going through the terms of the contract, we find essence of the contract is that the contractor i.e. the appellant shall extract iron ore from the said mine and shall deliver it exclusively to the leaseholder. In consideration thereof the leaseholder shall pay to the contractor in the manner decided. We find that the rates are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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