Snehalatha Singh Vs Commissioner of Service Tax (CESTAT Bangalore)
The appeal concerned the issue of service tax liability on activities undertaken by the appellant and whether those activities were taxable under the category of “Business Auxiliary Service” (BAS) or under “Mining Services.” The appellant was engaged in providing services such as excavation, extraction, grading, and sorting of iron ore to clients. The Department alleged that these activities fell under Business Auxiliary Service and raised a service tax demand for the period from 10.09.2004 to August 2006, along with penalties. The adjudicating authority confirmed the demand and imposed penalties, leading to the present appeal.
The appellant contended that the activities undertaken were mining-related activities and that service tax on mining services was introduced only through the Finance Act, 2007. The service was made taxable through Notification No. 23/2007-ST dated 22.05.2007 and became effective from 01.06.2007. Therefore, according to the appellant, no service tax could be demanded for the period prior to 01.06.2007. The appellant also relied on a CBIC circular clarifying that activities related to mining of minerals, oil, and gas, including outsourced activities, would be covered under the newly introduced mining service category. The appellant maintained that excavation, extraction, grading, and sorting of iron ore carried out inside the mine were activities directly connected with mining and fell under the definition of mining services.
