TMI Blog2023 (11) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable service of survey and exploration of mineral and the expression survey and exploration is defined under Section 65(105)(zzv) and 65(104a) of the Finance Act, 1994 - Also, CBEC Circular dated 17.09.2004, clarifies the activities covered under the service category of survey and exploration of mineral . In the present case admittedly, the seismic data is owned by GXT and GGS which they have acquired under a contract entered into by them with DGH of India. Further, it is also admitted position that the said data is available off-the-shelf and is made available on license to use basis, to the Appellant. The Appellant has not engaged service of GXT and GGS for the purpose of carrying out any specific survey or exploration activity for them. This can be equated with the Appellant seeking license to use any copy right OR IPR protected knowledge, available in the form of a book or a web portal - it is observed that GXT and GGS are located outside India, and while they may acquire data from or within India, at the stage of acquisition of data, the same is done for their own self. For making available that data to the Appellant, it is being done from outside India and therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the business of mining of mineral oil or gas and had submitted bid for oil and gas exploration blocks, offered under New Licensing Exploration Policy VII (NELP VII), by the Ministry of Petroleum and Natural Gas, Government of India. 3. It was provided in the bid document that the Appellant was required to purchase data related to geological and seismic quality of the blocks from the Director General of Hydrocarbons (DGH) . The DGH was granted rights by the Government of India to carry out survey with respect to availability of Hydrocarbons in the territory of India. The DGH in turn appointed GXTC, USA and GGS Spectrum Ltd., UK to undertake in-depth analysis of geological and marine seismic data. The said GXT and GGS were also authorised by DGH to grant license to 3rd parties for use of the data collected by them. This data was available off-the-shelf and through auction process, the Appellant was entitled to use the licensed data owned by GXT and GGS. 4. The contract under which the license was granted to the Appellant stipulated that the data shall always be owned by GXT and GGS and at the end of the licensing period of the License, i.e. the Appellant herein, was ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seismic data for a particular duration of time. This data is made available for the licensed period. The data is available off-the-shelf (recorded on media) and is not created by GXT or GGS, specifically for the Appellant. The actual analysis of the said data is being carried out by DGAL for the Appellant, the consideration for which is offered to service tax by the Appellant under RCM. 10. The Appellant further stated that in view of para 7 of Circular No. 80.10.2004-ST dated 17.09.2004, only activities such as seismic survey, collection, processing, interpretation of data, are liable to service tax. In the present case, GXT and GGS are not appointed by the Appellant to carry out survey, collection, processing, interpretation of data for them, but the data is already available in the ownership of GXT and GGS, which is only made available to the Appellant on a license to use basis. It is further submitted by the Appellant that in view of Rule 3(ii) of Taxation of Services (provided from outside India and received in India) Rules, 2006, since the activities of GXT and GGS entities located outside India are performed outside India, the same will not be liable to service tax in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by both the sides, and perused the records. 15. We find that under the pre-negative regime, services were specifically defined with respect to scope and coverage, for the purpose of levy of service tax. The Show Cause Notice, as far as the first issue is concerned, proposes to levy service on the Appellant under the category of survey and exploration of mineral . The taxable service of survey and exploration of mineral and the expression survey and exploration is defined under Section 65(105)(zzv) and 65(104a) of the Finance Act, 1994, respectively as under: Section 65(105)(zzv) to any person, by any person, in relation to survey and exploration of mineral; Section 65(104a) survey and exploration of mineral to mean geological, geophysical or other prospecting, surface or sub-surface surveying or map making service, in relation to location or exploration of deposits of mineral, oil or gas. 16. We have also perused the CBEC Circular dated 17.09.2004, which clarifies the activities covered under the service category of survey and exploration of mineral . 17. In the present case admittedly, the seismic data is owned by GXT and GGS which they have ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., Vs Commissioner of GST C.Ex., Chennai [2019 (25) G.S.T.L. 252 (Tri-Chennai)] (iii) Gayatri Hi-Tech Hotels Ltd., Vs Commissioner of Customs, CE ST, Hyderabad I [2022 (5) TMI 141 CESTAT Hyderabad] 19. In the present case, TDS is paid by the Appellant on its own account (out of pocket) and hence, respectfully following the ratio in the judgments supra, we hold that service tax will not be applicable on the TDS deposited by the Appellant on their own account and paid to the Government, in addition to the consideration paid to DGAL. With respect to the judgment of this Hon ble Tribunal in the case of Sheladia Rites [2019 (27) GSTL 707 (Tri- Hyd)] relied upon by the Authorised Representative for the Revenue, we see that the facts in this case are different in as much as there the TDS was deducted from the gross amount payable to the service provider. In the present case, however, the gross amount charged by the service provider under Section 67 of the Finance Act, 1994, will only attract service tax and not on the TDS amount. 20. Since we are deciding both issues on merits, we are not giving any finding on limitation, and leave them stand open. 21. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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