CESTAT Rules Mining Services Between Distinct Entities Taxable, Not “Self‑Service”, Rejects Refund Claim [Read Order]
CESTAT Rules Mining Services Between Distinct Entities Taxable, Not “Self‑Service”, Rejects Refund Claim
CESTAT - Rules Mining - Services - Distinct - Rejects Refund Claim - taxscan
CESTAT - Rules Mining - Services - Distinct - Rejects Refund Claim - taxscan
The Delhi Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) rejected the refund claim of the assessee, ruling that mining services provided by Rajasthan State Mines and Minerals Limited (RSMML) were taxable as transactions between distinct entities and not “self‑service.”
Mayur Inorganics Limited,appellant-assessee,was registered with the Service Tax Department from October 2017 for providing taxable services. It sought a refund of ₹21,13,639, claiming this amount was wrongly paid as service tax to RSMML through debit notes for limestone mining.
The department rejected the refund on multiple grounds. It held that the appellant assessee had not provided proof of actual service tax payment to RSMML and that the transaction involved two separate entities, so it could not be treated as “self service.” The agreement relied on was between different parties, raising doubts about the appellant assessee’s right to claim the refund.
Authorities also noted that RSMML, being registered for service tax, was deemed to have deposited the tax with the government, leaving the appellant assessee with no standing to seek a refund. Part of the claim ₹7,26,647 linked to older debit notes was rejected as time barred under Section 11B of the Central Excise Act.
It was further alleged that the assessee had not directly paid service tax to the government and had likely passed the tax burden to its buyers, making the refund inadmissible.
Based on these findings, the department issued show cause notices and rejected the claim through an Order in Original. The Commissioner (Appeals) upheld this decision, prompting the assessee to move the Tribunal.
The two member bench comprising Dr.Rachna Gupta Judicial Member) and P.V.Subba Rao (Technical Member) heard both sides and examined the case records.It noted that the Commissioner (Appeals) had rejected the refund claim because RSMM charged service tax on limestone mining, and both RSMM and the assessee were separate legal entities. The tribunal held that the activity could not be treated as “self service.”
It also referred to the joint venture agreement and the Central Board of Excise and Customs (CBEC) circular, stating that services provided between the joint venture and its members were taxable. Since the assessee paid RSMM for these services, the service tax was correctly charged.
The appellate tribunal further found that the assessee had not submitted proper evidence to link its payments to RSMM with the tax returns filed by RSMM.
Based on these findings, the CESTAT upheld the Commissioner (Appeals)’s order and dismissed the appeals.
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