Case Law Details
Associated Soap Stone Distributing Company Pvt Ltd Vs C.S.T. Service Tax (CESTAT Ahmedabad)
In the present case, the issue to be decided is that the service in question is classifiable under the category of Site Formation and clearance, Excavation and Earth Moving and Demolition service as contended by the revenue or under the category of Mining service as contended by the appellant. As per the facts of the case, the appellant have carried out the service in terms of contract under Tender No.LP-2/04-05 and similar other contract.
From the certificate issued by the Gujarat Minerals Development Corporation Ltd., who is the recipient of service in this case, makes it clear that the work of overburden/interburden removal is a part of mining during the course of mining therefore. The service is pre-dominantly related to mining. We find that even if, the contention of the revenue that the activities of the appellant taken independently is of „Site Formation and Clearance, Excavation and Earth Moving and Demolition but at the same time, all these activities undertaken by the appellant is for the purpose of mining only. In this position, we find that if at all, there is a doubt about the particular service to be classified under one or more category the principle laid down for classification of taxable service under Section 65A need to be applied.
From the provision of Section 65A for classification of taxable service, it is provided that if taxable service is prima facie classified under two or more sub-clauses of clauses under Section 65, classification shall be effected on the basis of sub-clauses which provides the most specific description as compared to sub-clauses providing more general description. In the facts of the present case, it is undoubtedly clear that between appellant and the service recipient M/s. GMDC even though the nature of activity independently is of excavation and removal of soil but the objective of this activity is for mining only. In case of any mining activity, the activity of removal of over burden is inevitable. If the contention of the revenue is accepted then in case of all mining activities, the activity of excavation, removal of soil will go out of mining service which is not the intention of the legislature. Therefore, considering the above provision for classification of taxable service particularly in terms of Sub-section (1)(2a) of Section 65A as per the nature of the service in the present case, the removal of over burden which is exclusively meant for mining of lignite shall fall under the category of mining service only.
CESTAT followed its earlier decision and held that activity undertaken by the appellants is excavation and removal of O/B waste and mining of ore. We also note that there is only one contract with the appellants showing the scope of work as excavation and removal of O/B waste and mining of ore. This activity starts from excavation and ends at mining of ore. We find that this is a composite activity and cannot be split into two separate parts for levy of service tax. We are supported in taking this view by the decision of Tribunal in case of M. Ramakrishna Reddy v. CCE reported in 2009 (13) S.T.R. 661 (Tri.-Bang.) wherein it was held that removal of over burden and excavation of ore is undertaken for mining of ores only and activity does not fall under Site Formation and Excavation and Earth moving and Demolition service. Following the said decision, we hold that since the activity undertaken by the appellants is also excavation and removal of over burden and mining of ore, it is not classifiable under Site Formation, Cleaning, Excavation, Earthmoving and Demolition services.
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