Activities of Camp Mobilisation and Demobilisation, Camp Establishment, etc., cannot be Classified as ‘Survey and Exploration of Mineral’: CESTAT quashes Service Tax Demand [Read Order]

The Chennai bench of Customs, Excise and Service Tax Appellate Tribunal has held that activities of camp mobilisation and demobilisation, camp establishment etc., cannot be classified as ‘Survey and Exploration of Mineral’ and quashes Service Tax Demand.

The original authority confirmed the demand and imposed penalty on the appellant, M/s. AP Enterprises, alleging that the appellant is providing service falling within the definition of ‘Survey and Exploration of Mineral’ service as given under Section 65(105)(zzv) of the Finance Act, 1994.

The counsel for the appellant submitted that the activities rendered by the appellant do not fall within the definition of ‘Survey and Exploration of Mineral’ Service. The appellants provided the activity of camp mobilisation and demobilisation in the nature of camp establishment and maintenance, cable laying, shooting and shot hole drilling, centring around oil and gas areas. The activities include construction of sheds, bathrooms, toilets, bunkhouse jacking up, electrical wiring and fitting, erection of water tank and preparation of internal roads and paths and such activities rendered by the appellant do not fall within the definition of ‘Survey and Exploration of Mineral’ Service.

The counsel further submitted that in the case of the appellant’s sister concern, M/s. Mohabir Enterprises, the Tribunal had considered the very same issue and held that the activities would not fall within the definition of the service as alleged in the Show Cause Notice. In the appellant’s own case for the period from 2005 to 2007, the Commissioner (Appeals) has held the issue in favour of the appellant.

The division bench presided by Mrs. Sulekha Beevi C.S., Member (Judicial) and Mr. P. Anjani Kumar, Member (Technical) has observed that by relying the decision of the Tribunal in case of M/s. Mohabir Enterprises has observed that the activity undertaken by the appellant is in the nature of mobilization of camps, upkeep and maintenance of camps and such other services that would not fall under the definition of Survey & Exploration of Mineral Services.

Based on the above findings the Tribunal has held that the demand cannot sustain and allowed the appeal.

Advocate Mr. M.N. Bharathi, appeared for the appellant and Mr. Vikas Jhajharia, appeared for the Respondent.

To Read the full text of the Order CLICK HERE

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