TMI Blog2024 (3) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... held that compressed gas was liable to duty under item 68 of the then Central Excise Tariff Act, 1985. The contention of the Appellant is agreed upon that the ownership of the plant and machinery used for the manufacture of 'excisable goods' cannot be a criteria for charging Central Excise duty. Accordingly, the activity undertaken by the appellant in both the cases amounts to manufacture of 'Compressed Air' chargeable to Nil rate of duty and hence, no Service Tax is leviable on such activities. As per these Contracts, the appellant operated the said HPMACs at the mining sites of ONGC and OIL to produce and supply excisable goods viz. Compressed Air , falling under the Central Excise Tariff Heading No. 28530030 chargeable to 'Nil' rate of duty, for use in the oil exploration. In both the cases, the appellant was responsible only for the production of 'Compressed Air'. Oil exploration was not the responsibility entrusted to the appellant. The appellant has not been paid based on the quantum of oil explored - the activity undertaken by the appellant cannot be categorized as mining service as defined under Section 65(105)(zzzy) of the Finance A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. 3. The Appellant submits that in respect of three HPMACs, owned by them, both the ld. Adjudicating authority and the lower appellate authority has held that the activity undertaken by them amounted to manufacture of excisable goods, namely, Compressed Air , falling under the Central Excise Tariff Heading No. 28530030 and thus no Service Tax is attracted. Both the authorities came to such a conclusion on the premise that Central Excise Duty and Service Tax are mutually exclusive and once the process undertaken is found to be manufacture of excisable goods within the meaning of Section 2(f) of the Central Excise Act, 1944, the provisions of Finance Act, 1994 for levy of Service Tax cannot be applied. But in respect of other two HPMACs that were owned by ONGC, the ld. Adjudicating authority as well as the ld. Commissioner (Appeals) has held that the process involved rendering of mining service , as defined under Section 65(105)(zzzy) of the Finance Act, 1994 and confirmed the demand of service tax Rs.6,23,430/- pertaining to the period December, 2007 to September, 2011 along with interest and penalties under Sections 77 and 78 of the Finance Act. The appellant submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture of excisable goods occurs in respect of three contracts, there is no reason to hold that no manufacture has happened in respect of the remaining two contracts. The only difference between the two set of contracts is that in the second set of contracts, the HPMACs were owned by ONGC. The ownership alone will not make the manufacture of the goods into a Service Tax activity. In this context the appellant refers to and relies upon the following reported decisions:- (i) BOC India Ltd. v. Commissioner of C.Ex., Jaipur [2018 (10) G.S.T.L. 309 (Tri. Del.)] (ii) Brindavan Bottlers Pvt. Ltd. v. Commr. of C.G.S.T. C.Ex., Lucknow [2022 (58) G.S.T.L. 330 (Tri. All.)] 3.4 The appellant further submits that in the case of Union of India Vs. Indian National Shipowners Assn., reported in 2011 (21) STR 3 (SC) wherein the scope of work relating to providing vessels in the mining area of ONGC was examined by the Hon'ble Apex Court. It was found that the nature of work in terms of contract with ONGC could be strictly said to be service in relation to mining of mineral oil or gas and thus held to be not included within the expression as per Section 65(105) (zzzy). 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med the demand of Service Tax. We observe that except the ownership of the HPMACs, all other terms and conditions for production and supply of compressed air remained same in respect of both the set of contracts. We observe that the appellant was solely responsible to operate and maintain the HPMACs, owned by ONGC also, to produce and supply compressed air to ONGC. 6.2 Thus, we agree with the contention of the Appellant that the ownership of the plant and machinery used for the manufacture of 'excisable goods' cannot be a criteria for charging Central Excise duty. Accordingly, we hold that the activity undertaken by the appellant in both the cases amounts to manufacture of 'Compressed Air' chargeable to Nil rate of duty and hence, no Service Tax is leviable on such activities. 7. We observe that in respect of the HPMACs owned by ONGC, both the ld. adjudicating authority as well as the ld. Commissioner (Appeals) has held that the process involved amounts to rendering of mining service , as defined under Section 65(105)(zzzy) of the Finance Act, 1994 and confirmed the demand of service tax Rs.6,23,430/-. We have perused the scope of work assigned to the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X
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