Collection, Cleaning, Segregation & Stacking of Blasted Raw Magnesite is ‘Mining Services

KRSS Manpower Service Vs Commissioner of GST & Central Excise (CESTAT Chennai)

Introduction: In the case of KRSS Manpower Service vs. Commissioner of GST & Central Excise, the CESTAT Chennai addressed a crucial question regarding the classification of activities related to the collection, cleaning, segregation, and stacking of blasted raw magnesite. The central issue was whether these services should be classified as ‘Business Auxiliary Service’ or ‘Mining Services’ under the Finance Act, 1994. This article provides an in-depth analysis of the CESTAT Chennai’s order and its implications.

Background of the Case

The appellant, M/s. KRSS Manpower Service, registered with the Service Tax Department, undertook the tasks of collecting, cleaning, segregating, and stacking blasted raw magnesite within a mining area on behalf of M/s. Burn Standard Co. Ltd. During a specific period, the appellant received a sum of Rs. 15,22,166 but did not pay any service tax, file ST-3 returns, or adhere to relevant provisions. Subsequently, a Show Cause Notice dated 24.11.2010 was issued, proposing to classify the activity as ‘Business Auxiliary Service’ and demanding service tax of Rs. 1,86,514, along with interest and penalties.

Adjudication and Appeal

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