Incidental Relation to one Service cannot be preferred over Main Service for charging Tax retrospectively: CESTAT Rejects Revenue dept's appeal [Read Order]
The respondent, M/s Dholu Construction & Projects Ltd., had not taken any registration with the Service Tax Department before 25.06.2007 as the activities carried out were integrated to mining operations which were not taxable.
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The Customs, Excise and Service Tax AppellateTribunal (CESTAT), New Delhi Bench, rejected Revenue department’s appeal and held that any incidental relation to one service cannot be preferred over main service for charging tax retrospectively. Also Read:Service Tax Demand of ₹26.26 Lakh Quashed: CESTAT Confirms Exemption for Own-Truck Operations [Read Order]The appeal was filed by...
The Customs, Excise and Service Tax AppellateTribunal (CESTAT), New Delhi Bench, rejected Revenue department’s appeal and held that any incidental relation to one service cannot be preferred over main service for charging tax retrospectively.
The appeal was filed by the Revenue department challenging the order which dropped the demand of service tax under the category of “site formation and clearance, excavation and earthmoving and demolition services” undertaken by the respondent as the services were classified as ‘Mining Services’ which were not taxable prior to 01.06.2007. The respondent, M/s Dholu Construction & Projects Ltd., had not taken any registration with the Service Tax Department before 25.06.2007 as the activities carried out were integrated to mining operations which were not taxable.
The issue for consideration was whether the services fall under Section 65(97a) as claimed by the Revenue or under Section 65(105)(zzzy) as classified by the respondent. The submission of the respondent is that the whole contract cannot be classified by picking and choosing some incidental activity in total disregard of the main activity.
The tribunal agreed with the view taken by the Adjudicating Authority that since the essential character of work undertaken by the respondent was mining of minerals, the activity would be classifiable under Mining Service. The bench of Bina Tamta (Judicial Member) and Hemambika R. Priya (Technical Member) therefore affirmed with the previous order and appeal was accordingly, dismissed.
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