Dept classifies Transport Contractor as Mining Service Provider without Proper Evidence: CESTAT sets aside Service Tax Demand [Read Order]

In a recent ruling, the Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) overturned the service tax demand on transportation services as the department was unable to provide corroborative evidence to prove that the service provided by the appellant was that of mining.

In this case, the appellant, Roopsangji Samatji Payara, a transport contractor, was accused by the department of providing mining services based on audits of companies they had worked for.

During the course of the audit of the records of M/s. Ashapura International Ltd. and M/s. Ashapura Minechem Ltd, it was discovered that they had used mining and material excavation services at their mining site, for which they had paid the appellant, falling under the category of mining services. But the appellant did not obtain registration and had not paid the service tax.

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The main issue in this case was whether the services provided by the appellant during the period 2009-2014 fell under mining services as argued by the department or transportation services  as claimed by the appellant.

The Commissioner (Appeals) upheld the service tax demand imposed by the department. Aggrieved, the appellant approached CESTAT for relief.

The Chartered Accountant appearing on behalf of the appellant, Nilesh Suchak, contended that the impugned order was passed based on the assumption and presumption contrary to the facts on record. It was further contended that the appellant hadn't given any party mining services, and there is no evidence for the department’s claim.

It was also noted by the bench that the 3 CD report under Income Tax also shows that the appellant is a transport contractor.

The bench was of the view that the department's demand was based on assumptions derived from income tax data, without substantive evidence proving the appellant's involvement in mining services.

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The CESTAT bench, comprising of Ramesh Nair (Judicial) and C.L. Mahar (Technical), observed that there was no concrete evidence proving that the appellant had rendered mining services. The department's case was based on assumptions without any corroborating documentation. The CESTAT bench allowed the appeal and set aside the impugned order.

To Read the full text of the Order CLICK HERE

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