Vyshnavi Minerals Vs Commissioner of Central Excise (CESTAT Bangalore)
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) considered an appeal filed by M/s. Vyshnavi Minerals against an order confirming service tax demand for the period from 01.04.2005 to 30.09.2006. The appellant was engaged in activities such as excavation, extraction, grading, sorting, and related operations in respect of iron ore for its customer, M/s. S.B. Minerals, Hospet.
The Revenue sought to levy service tax by classifying these activities as “Business Auxiliary Services” (BAS) under Section 65(19)(v) of the Finance Act, 1994, on the ground that the appellant was engaged in production or processing of goods for, or on behalf of, its client. A show-cause notice dated 15.10.2007 was issued, and the Commissioner confirmed the demand through the impugned order.
The appellant contended that the activities undertaken by it were in the nature of mining services and could not be classified as Business Auxiliary Services. It was argued that “Mining Services” were specifically introduced as a taxable service under Section 65(105)(zzzy) of the Finance Act, 1994 only with effect from 01.06.2007. Since the disputed period was prior to the introduction of the taxable category of mining services, no service tax liability could arise. The appellant relied on judicial precedents, including Indian National Shipowners’ Association v. Union of India and recent CESTAT decisions in Popular Constructions and Snehalatha Singh.
