No Simultaneous Classification under TTA Services on acceptance that it is Mining Services: CESTAT quashes Service Tax demand [Read Order]

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand as there was no simultaneous classification under the Technical Testing and Analysis (TTA) services on acceptance that it is mining services.

M/s. HLS Asia Ltd, the appellant a registered provider of services, has filed this appeal with a prayer to set aside the order passed by the Commissioner Service Tax, Delhi demanding Service tax.

Considering that these services fall under “Technical Testing and Analysis” , the appellant registered with the service tax department and paid service tax but its client OIL never reimbursed the service tax to it, while ONGC initially reimbursed service tax and then recovered it later as, according to both these clients, these services do not fall under TTA.

Thereafter, from 1.6.2007, a new category of taxable service known as „mining services‟ was introduced and the appellant started paying service tax under this head for the same three services and has been filing returns and the department has not objected to this payment of service tax under “mining services”.

The Counsel for the appellant submitted that once it is undisputed that from 1.6.2007, the services rendered by the appellant fall under “mining services”, they cannot be classified under any other category prior to that date. Even otherwise, the appellant is not testing anything but is only taking measurements and supplying them to its clients and in case of OIL, it was also processing the data so collected during measurements.

The Coram consisting of Justice Dilip Gupta, President and PV Subba Rao, Technical Member “The appellant has been paying service tax on these three services from 1.6.2007 under the head „mining services‟ and the department has not disputed this classification of the service. Once the department accepted that these are „mining services‟, it cannot, simultaneously, classify them under TTA services.”

“Unless the department can establish that the appellant was wrong in classifying these services under “mining services” and the department itself was equally wrong in accepting their classification under “mining services”, the department cannot classify the services under any other head, including TTA” the Bench noted.

To Read the full text of the Order CLICK HERE

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