Commissioner of Service Tax Vs G.S. Atwal And Co. Engineering Pvt Ltd (Calcutta High Court)
Calcutta High Court held that coal cutting or mineral extraction and lifting them up to the pithead are essential integral processes and are part of mining operations and hence taxable only from 01.06.2007. No service tax is leviable on such activities prior to the said date.
Facts- The issue which arises for consideration in this appeal is whether the respondent/assessee was liable to pay service tax in respect of the services rendered by him which are essentially mining activities for the services/activities prior to 1st June, 2007. The other issue is whether the Department could have invoked the extended period of limitation for issuing the show-cause notice and demanding service tax.
Conclusion- Circular issued by Central Board dated 12.11.2007 being Circular FL No. 232/2/2006-Cx.4, wherein it was clarified that no service is leviable on mining activity prior to 1st June, 2007. Further, circular specified that Coal cutting or mineral extraction and lifting them up to the pithead – these activities are essential integral processes and are part of mining operations. As stated earlier, mining activity has been made taxable by legislation under the Finance Act, 2007(w.e.f.1.06.2007). Prior to this date, such activities, being part of mining operations itself are not subjected to service tax. Therefore, no service tax is leviable on such activities prior to the said date.
