Principal Commissioner Vs Aryan Coal Benefications Pvt. Ltd. (CESTAT Delhi)
The Revenue filed an appeal against Order-in-Original No.02-03/Commr./CGST/Audit-I/2018 dated 05.07.2018, which had decided five issues in favour of the assessee. The present appeal was confined to whether washing of coal undertaken by the respondent for its clients was taxable under “Business Auxiliary Services” under Section 65(19)(v) read with Section 65(105)(zzb) of the Finance Act, 1994, for the period from 16.06.2005 to 31.03.2007. The respondent was engaged in washing raw coal on behalf of its clients. The Tribunal noted that beneficiation or washing of coal was specifically made taxable with effect from 01.06.2007 under Section 65(105)(zzzy) as a service “in relation to mining of minerals, oil or gas.” For the earlier period, the Revenue sought to classify the activity under Business Auxiliary Service covering production or processing of goods for, or on behalf of, the client.
The respondent relied upon earlier Tribunal decisions in its own case and in other cases, contending that the issue had already been decided in favour of the assessee. The Revenue’s authorised representative also accepted that the issue had consistently been decided in favour of the assessee. The Tribunal found that the decisions in Aryan Energy (P) Ltd., Spectrum Coal & Power Ltd., and Aryan Coal Benefications Pvt. Ltd. consistently held that beneficiation of coal was part of mining activity and became liable to service tax only from 01.06.2007. It further considered Global Coal & Mining Pvt. Ltd. Vs. CST, Delhi – 2020 (36) GSTL 77, which held that an activity covered under the mining service entry from 01.06.2007 could not be categorised under Business Auxiliary Service for the earlier period. The Tribunal also referred to the Bombay High Court decision in Indian National Shipowners Association Vs. Union of India – 2009 (14) STR 289 (Bombay).
