Western Coalfields Limited Vs Commissioner of Central Excise (CESTAT Mumbai)
CESTAT Mumbai allowed three appeals filed by Western Coalfields Limited for the period April 2016 to June 2017 and set aside orders confirming duty demands of Rs.79,19,098/-, Rs.10,70,840/- and Rs.5,91,129/- under Section 73(1A) of the Finance Act, along with interest and penalties under Sections 75 and 77 of the Finance Act, 1994.
The appellant is engaged in production and clearance of coal and has several area offices with local Service Tax Registration. DGCEI intelligence indicated that the appellant was charging and collecting compensation, penalty and forfeiting Security Deposit/Earnest Money Deposit for short lifting of coal and breach of fuel supply agreement conditions. This activity was treated as a declared service under Section 66E(e) of the Finance Act, 1994.
The appellant submitted that it had already obtained relief from CESTAT Mumbai on the same issue for the earlier period July 2012 to March 2016. It also produced the Tribunal’s order dated 12.08.2022 and CBIC Circular No. 214/1/2023-Service Tax dated 28.02.2023, which recorded that the Board had decided not to file an appeal against the relevant CESTAT orders.
The Tribunal noted its earlier decision in the appellant’s own case, which had followed the decision of the Principal Bench in South Eastern Coalfields Ltd. Vs. Commissioner of Central Excise & Service Tax, Raipur, reported in 2021 (55) GSTL 549 (Tri.-Del.). Considering the earlier decision and its acceptance by the CBIC Board, the Tribunal allowed all three appeals and set aside the impugned orders with consequential relief, if any.
Service Tax Demand on Coal-Related Compensation
Western Coalfields Limited is engaged in the production and clearance of coal falling under Tariff Item No. 27011200 of the First Schedule of the Central Excise Tariff Act, 1985.
