The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata has held that transportation services within mines constitute goods transport agency (GTA) services.
The assessee, M/s. Tycoon Industries Private Limitedis working inside the mining area as per an agreement entered into with M/s. Tata Steel Limited (TSL). During assessment proceedings, the Commissioner dropped the demand of service tax amounting to Rs. 7,18,33,115/- on Mining services under section 73(1) of the Finance Act, 1994 by holding that the activity of transportation within the mines as per the work orders cannot be classified as mining services.
The Aggrieved department filed an appeal before the CESTAT. The counsel for the appellant submitted that the work of Transportation of raw coal within the respective areas of mines shall also be classified as mining of mineral, oil, or gas services and that the same cannot be taxed under the transport of goods by road service.
The counsel for the respondent relied on the decision of the Supreme Court in Commissioner of Central Excise and Service Tax, Raipur Vs. Singh Transporterssubmitted that transportation of coal from the pit-heads to the railway sidings within the mining areas is more appropriately classifiable Under Section 65(105)(zzp) of the Act, namely, under the head “transport of goods by road service” and does not involve any service in relation to “mining of mineral, oil or gas” as provided by Section 65(105)(zzzy) of the Act.
The Tribunal by relying on the decision of the Supreme Court in Singh Transporters observed that the transport activities have been performed within the mining area of TSL, and the confirmation of demand for such activity by treating the same as mining service cannot be sustained. The Coram of Mr. P. K. Choudhary, Member(Judicial) and Mr. P. Anjani Kumar, Member(Technical) has held that “we are of the considered view that the transport charges cannot be included in the valuation for mining services and thus the order of the Ld. Adjudicating authority is correct in the eyes of law”.
Mr. S. S. Chattopadhyay and Mr. Ankit Kanodia appeared on behalf of the appellant and respondent respectively.Subscribe Taxscan Premium to view the Judgment