IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

ECIAL LEAVE PETITION (CIVIL) NO._ __ OF 2025

[Petition under Article 136 of the Constituti on of India

arising out of the Impugned final order/judgment dated
09.07. 2024 pas sed by the Hon'ble High Court of Calc utta in
CEXA No.11/2024)

[WITH PRAYER FOR INTERIM RELIEF)

IN THE MATTER OF:

Commissioner of Service Tax,
Kolkata .... Peti tioners
Versus
0 G. S . Atwal & Co. Engineering
Pv t. Ltd. . .. Respondent

Wit ~ ) 2 , I U6G°'
I.A. No.._ _ _ _ of 2025
(Application for Exemption for certified copy of Impugned
order)

uGO
With..---::-:12>I
I.A.No._ _ _ _ of2025 ·
(Application for Condonation of Delay in flllng Special Leave
Petition)

And:.- \_01U62--
I.A. No." of2025
{Application for Condonation of Delay in RE-filing Special
Leave Petition )
0
PAPER BOOK
(FOR INDEX PLEASE SEE INSIDE)

ADVOCATE FOR .THE PETITIONER: GURMEET SINGH MAKKER

F74 ·12/21
 INDEX

Particulars ofDocument Page No. of part to which Remarks

it belongs

Part 1 Part II

(Contents (Contents of
of Paper file alone)
Book)

Court fees

Office Report on
Limitation

Listing Proforma -A1-A2

Cover Page ofPaper

Book

Index . of Record of
Proceedings
Limitation Report
prepared by the Registry
Defect List

Note Sheet NSlto

8. I Synopsis/List of Dates I B-K

Impugned Final order/ 1-14

judgment dated
09.07.2024 passed by the
Hon'ble High Court of
Calcutta in CEXA No.
11/2024
 Special Leave Petition 15-28
along with affidavit

11. ANNEXURE-P/1 29-94

A copy of the show
cause notice dated

14.03.2007 served upon

the Respondent

12. ANNEXURE-P/2

A copy of the Order-in-

Original dated
29,05.2008 passed by the
Coinmissioner of Service

Tax,Kolkata

13. ANNEXURE-P/3

A copy of the Order

dated 06.06.2023 passed
by the Ld. CESTAT in
Service Tax Appeal No.
, 165/2008
I

_ 14. I ANNEXURE-P/4

copy of the

CEXAyil/2024 filed by
the Petitioner before the

Hon'ble High Court

15. ANNEXUREP-5
True copy of the Order
dated 06.06.2023 passed
by the Customs, Excise &
Service Tax Appellate
Tribunal Kolkata in Service
Tax Appeal No.165/2008.
16. I.A. No. of2025
Application for Exemption
for Certified copy of
impugned order

TtT I.A. No. of 2025

Application for
Condonation of Delay
I.A. No. of 2025
Application for
Condonation of Delay in
re-filing Special Leave
Petition with Affidavit

Memo of parties

27. Vakaiatnama
 IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION rCIVILI NO. OF 202S^

[Petition under Article 136 of the Constitution of India
arising out of the Impugned Final order/ judgment dated
09,07,2024 passed by the Hon'ble High Court of Calcutta in
CEXANo. 11/2024]
WITH
[A PRAYER FOR INTERIM RELIEF]

IN THE MATTER OF:

Conunlssioner ofService Tax,Kolkata ...Petitioner
Versus
G.S. Atwal & Co. Engineering Pvt. Ltd. ...Respondent

OFFICE REPORT ON LIMITATION

1. The Petition is/are within time.

2. The Petition is barred by time and there is delay of'

days in filing the same against the order dated

09.07.2024 and Petition for condonation of days

delay has been filed.

3. There is delay of days in refilling tlie petition and

the petition for -condonation of " days delay, in
refilling has been filed.

PLACE: NEW DELHI

DATED: /J..}..202$" BRANCH OFFICER
 Section:' III

PROFORMA FOR FIRST LISTING

The case pertains to (Please ticb/Checb the correct box):
Centrot Act:(Title) Finance Act,1994

Section:
Section 73

Central Rule:(Title)

Rule No(5).

Stale Act;(Title)

Section.

State Rule:(Title)

Rule No(s)
Impugned Interim Order:

Impugned Final Order/Decree t 09.07.2024

High Court:(Name)High Court High Court at Calcutta

Names ofjudges: HON'BLE MR. CHIEF JUSTICE T.S.

SIVACNANAM AND HON'BLE
IUJTICE HIRANMAV
BHATTACHARYVA.

Tribunal/Authority:
(Name)

1. Nature of Matter

2(a). Petitioner/Petitioner No.1 Commisiloner of Scruice Tax

(b) E-mail ID:

(c) Mobile Phone Number:

3(a) Respondent No.t: G.S. Atwol and Co.

Engineering Pvt. Ltd.
 E-mail ID:

(c) Mobile Phone Number:

4(a) Cofcegory ctoJsiHcation t

(b) ^ub cioi5ificotion:

5. Not to be listed before

6. a. Q similar disposed off matter with No simitar disposed of matter

citation if any & case details

b. similar pending motter with cose details No similar pending of matter

Criminal Matters

Whether accuscd/conviict has surrendered N.A.

FiR No:

Police Station:

Sentence Awarded:
Sentence Undergone:

Whether anyearlier cose between the

some parties is filed
Particulars of the FIR and Case

Whether any bait application was

preferred corlier end decision thereupon.
Land Acquisition Matters:
Dote of Section 4 notification;
Dote of Section 6 notificotion;
Date of Section 17 notification:

Tax Matters: State the tax effect: Rs.33,10,00,270/-'

Special Cotegory(first N.A.
petitioner/oppellont only);
Senior citizen 65 years DC/ST * N.A.
Womon/child * Disabled * Legal Aid case *
In custody.
Vehicle Number (in case of Motor Accident N.A.
Claim matters);
Whether there was/!s lltigotlon on the N.A.
some point on the same point of law,if
yes, details thereof.

[C.S. h^KKER]
Advocate for the Petitioner
Code NoVasy
on: 13.01.2025
 The instant Petition is being preferred against the final
impugned judgment/order dated 09.07 2024 passed by the
Hon'ble High Court of Calcutta in CEXA No. 11/2024
• whereby and whereunder the Appeal filed by the Petitioner
against the Judgment/Order dated 06.0(^2023 passed by
the Ld. CESTAT, Kolkata in Service Tax Appeal No.
165/2008 has been dismissed without any interference and
the Judgment passed by the Ld. CESTAT, setting aside the
Order-in-Original dated 29.05.2008 confirming the
demand of Service Tax and Education Cess amounting
to Rs.33,10,00,270/- upon the Respondent, has been
upheld, while holding that the Ld. CESTAT was right in
holding that the since 'mining services' were liable for
service tax only with effect from 01.06.2017, demand
of service tax by invoking extended period is not
sustainable and as the demand was held to be
unsustainable the penalty imposed could not

only sustain and was also set aside.

The Respondent in the present case is a mining

contractor engaged in mining activities i.e. of

removal of ever burden, drilling, excavation,

haulage and crushing of end products, and

during the course of providing services, the

Respondent was collecting service charge from

its Clients in terms of their agreements and was

registered with Service

Commissionerate, Kolkata on 05.05.2006,

however it did not pay any Service Tax for the

charges collected during the period 16.08.2002

to 31.10.2006 and after some investigation the

Show cause notice dated 14.03.2007 was served

upon the Respondent for demand of Service Tax

and Edu. Cess of Rs. 3 3,10,00,270/- and after

being adjudicated upon the said show cause

notice was being affirmed vide the Order-in-

Original dated 29.05.2008 passed by the

Commissioner of Service Tax, Kolkata.

 Being aggrieved with the Order in Original
passed by the Commissioner of Service Tax,
Kolkata the respondent preferred Service Tax
Appeal No. 1 65/2008 before the Hon'ble

CESTAT, Kolkata wherein vide the order dated

06.06.2023 the Hon'ble CESTAT allowed the

appeal filed by the Respondent and the Order in

Original raising demand Service Tax was set

aside while holding that since 'mining services'

were liable.for service tax only with effect from

01.06.2017, demand of service tax by invoking

extended period is not sustainable and as the

demand was held to be unsustainable the penalty

imposed could not only sustain and was also set

aside.

The said Judgment passed by the Hon'ble

CESTAT was assailed by the Petitioner before

the Hon'ble High Court by way of the CEXA

No. 11/2024 however the Hon'ble High Court

vide the Impugned Final Order/Judgment dated

09.07.2024 dismissed the said Appeal without

any interference and upheld the judgment by the

Ld. CESTAT.

The Hon'ble High Court lost sight of the fact

that the services rendered by the Respondent

were wrongly considered as 'Mining Service'

whereas the same were rightly bifurcated under

different heads such as Cargo Handling Service,

Site Formation Service, Business Auxiliary

Service, etc. and the Respondent was also

receiving service charge against the same from

its clients, the circular dated 12.1 1.2007 relied

upon by the Ld. CESTAT only provided that

Mining Services would not be liable for service

however the same circular clarified that the

activities which were carried out by the

Respondent were infact covered.

The Hon'ble High Court as well as the Ld.

CESTAT failed to take into account that the

Respondent had on 04.05.2006 registered itself

with the Service Tax Department, under service

tax head "Site formation and clearance,

excavation and earth moving and demolition

services" and the Respondent being a private

company could not claim exemption under

notification dated 10.09.2004.

The Hon'bie High Court as well as the Ld.

CESTAT lost sight of the fact that the Show

Cause Notice served upon the respondent was

not under the category 'Mining Services' but

was under three categories i.e. (a) Business

Auxiliary Service from 10.09.2004; (b) Cargo

Handling Service from 16.08.2002; and (c) Site

Formation and clearance, excavation and earth

moving and demolition services from

16.05.2006.

The Hon'ble High Court as well as the Ld.

CBSTAT lost sight of the fact that Mining

Services is a combination of several services

and can be classified in terms of section 65A(1)

of the Finance Act.

Hence the present Special Leave Petition.

 List of dates

14.03.2007 The" Respondent in the present

case is a mining contractor

engaged in mining activities i.e.

of removal of ever burden,

drilling, excavation, haulage and

crushing of end products, and

during the course of providing

services, the Respondent was

collecting service charge from its

Clients in terras of their

agreements and was registered

with Service

Comraissionerale, Kolkata on

05.05.2006, however it did not

pay any Service Tax for the

charges collected during the

period 16.08.2002 to 31.10.2006

and after some investigation the

Show cause notice dated

 14.03.2007 was served upon the
Respondent for demand of Service

Tax and Edu. Cess of Rs.

33,10,00,270/- and after being

adjudicated upon the said show

cause notice was being affirmed

vide the Order-in-Original dated

29.05.2008 passed by the

Commissioner of Service Tax,,

Kolkata.

A copy of the show cause notice

dated 14.03.2007 served upon the |

Respondent is appended herewith

as ANNEXURE-P/1 at Page No.

to

A copy of the Order-in-Original

dated 29.05.2008 passed by the
Commissioner of Service Tax,

Kolkata is appended herewith as

 ANNEXURE-P/2 at Page No.

06.06.2023 Being aggrieved with the Order in

Original passed by the

Commissioner of Service Tax,

Kolkata the respondent preferred

Service Tax Appeal No. 165/2008

before the Hon*ble CESTAT,

Kolkata wherein vide the order

dated 06.06.2023 the Hon'ble

CESTAT allowed the appeal filed

by the Respondent and the Order

in Original raising demand

Service Tax was set aside while

holding that since 'raining

services' were liable for service

tax only with effect from

01,06.2017, demand of service tax

by invoking extended period is

not sustainable and as the demand

 was held to be unsustainable the

penalty imposed could not only

sustain and was also set aside.

A copy of the Order dated

06.06.2023 passed by the Ld.

CESTAT in Service Tax Appeal

No, 165/2008 is appended

herewith as ANNEXURE-P/3 at

Page No. !_%o_ to JJ?;3

09.07.2024 The said Judgment passed by the

Hon'ble CESTAT was assailed by

the Petitioner before the Hon'ble

High Court, by way of the CEXA

No. 11/2024 however the Hon'ble

High Court vide the Impugned

Final Order/Judgment dated

09.07.2024 dismissed the said

Appeal without any interference

and upheld the judgment by the

 Ld. CESTAT.

A copy of the Appeal being CEXA

No.11/2024 filed by the Petitioner before
the Hon^ble High Court is appended
herewith as Annexure - P/4 at Page No.171
to 188.

06.06.2023 That the Customs, Excise and Service Tax

Appellate Tribunal Kolkata passed the
Order dated 06.06.2023 in Service Tax

Appeal no.165 of 2008, regarding penalty?

imposed in the impugned ,order, • we
observe that the demands confirmed in the

impugned are not sustainable, when the

demand itself is not sustainable on merit

as well as on limitation the question of

imposing penalty does not arise. In view of
the above findings, we set aside the
impugned order and allow the appeal filed
by the appellant. True copy of the Order dated
06.06.2023 passed by the Customs, Excise 8&
Service Tax Appellate Tribunal Kolkata in
Service Tax Appeal No.165/2008 is annexed
herewith marked as Annexure P/5 Page
No.189 to 198.

13.01.2025 Hence the present Special Leave Petition.

 CEXA/l'l/2024

lA NO: GA/2/2024

IN THE HIGH COURT AT CALCUTTA

SPECIAL JURISDICTION CENTRAL

EXCISE)

ORIGINAL SIDE

COMMISSIONER OF SERVICE TAX,

KOLKATA

-Versus-

G.S. ATWAL AND CO. ENGINEERING PVT

LTD

BEFORE:

THE HON'BLE THE CHIEF JUSTICE T.S

SIVAGNANAM

-AND-

HON'BLE JUSTICE HIRANMAY

BHATTACHARYYA

DATE: 9th JULY, 2024.

 Appearance:

Mr. K.K. Maity, Adv.

Mr. Tapan Bhanja, Adv.

...for the appellant.

Mr. Satyaprem Majumder, Adv.

...for the respondent.

The Court: This appeal by the revenue is

directed against the order passed by the

Customs, Excise and Service Tax Appellate

Tribunal, Kolkata Eastern Zonal Bench dated

6th June, 2023 in Service Tax Appeal No. 165

of 2008. The revenue has raised the following

substantial questions of law for consideration:-

Whether the Learned Tribunal has

committed gross error of law by

considering the services rendered by the

respondent is "Mining Service" for the

period 16.08.2002 to 31.10.2006 though

the "mining service" came into effect on

01.06.2007 ?
 ii) "Whether the services provided by the

respondent prior to 01.06.2007 can be

considered as Mining service or the said

services would be considered as "(a)

Business Auxiliary service; (b)"Cargo

Handling Service; (c)"Site formation, and

clearance, excavation and earth moving

and demolition services" ?

iii) iii.) Whether the contents of the

Circular dated 12.1 1.2007 has been, fully

appreciated by the Learned Tribunal or

not?

We have heard Mr. K. K. Maity, learned

Counsel appearing for the appellant and Mr.

Satyaprem Majumder, learned Counsel for the

respondent.

The issue which arises for consideration in

this appeal which has been suggested by the

revenue in the aforementioned three substantial

questions of law 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 would be as to whether the

Department could have invoked the extended

period of limitation for issuing the show-cause

notice and demanding service tax. The assessee

had set out the factual background, namely, the

nature of activities done by them, namely, the

mining activity. It is the consistent case of the

assessee that service tax in respect of mining

activities was levied for the first time with

effect from 1st June, 2007 and therefore they

did not apply for registration in respect of

mining services before 1st June, 2007. The

assessee, therefore, contended that they were

under the bonafide belief that the registration

need not be taken in respect of the mining

services as the services were not taxable prior

to 1st June, 2007 and therefore, extended period

 of limitation cannot be invoked. That apart, the
assessee had specifically contended that the

Department was not justified in artificially

bifurcating the nature of services under various
categories, such as, cargo handling service, site
formation and clearance service and business
auxiliary services and demanding service tax.
The assessee by placing reliance on the work

orders had established before the Tribunal that

the services rendered by them was composite

service and the Department was not justified in
creating an artificial bifurcation. Furthermore,
the assessee's specific case was that they
entered into contracts with different owners of

the mines which are composite and inseparable;

all the mining contracts specified composite
rates for the mining process comprising
excavation and haulage of excavated minerals,
dumping of hauled materials at specified
locations and all inclusive rates were split up to
identify cost for any specific activity along the

mineral extraction chain.

Further, the assessee contended that they are a

mining contractor and is engaged in the mining

operation as defined under the Mines and

Minerals (Development and Regulation) Act,

1957 for extraction of minerals within the

mining area. Thus, the assessee contended that

in the light of the composite nature of work,

and inasmuch as the assessee was engaged in

mining activities, no service tax was payable

prior to 1st June, 2007, when, for the first time,

mining service was included by Notification

no.23/2007-SD dated 22.05.2007 (effective from

01.06.2007). This factual matters were

considered by the learned Tribunal and faulted

the Department for creating an artificial

bifurcation of the mining activity done by the

respondent/assessee while noting that no such

separate charges are payable to such service as

per the work orders. This factual finding cannot

be rebutted by the Department in this appeal.

That apart, the learned Tribunal had also taken

note of the 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. The relevant paragraph of the

Circular is quoted hereinbelow;-

"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."

r^. Thus, on facts that Tribunal has rightly

appreciated the case of the assessee and granted

relief with regard to invoking the extended

period of limitation. We have seen the

allegation in the show-cause notice and we find

that except for the use of the words "omission

and failure", "suppression of material facts",

"with an intent to evade payment of service

tax", the adjudicating authority has not brought

out any facts to substantiate as to how there was

an act of omission and failure on the part of the

assessee to disclose the correct facts and that it

was with an intent to evade payment of service

tax. In the absence of these essential elements,

it is a settled legal position that the extended

period of limitation cannot be invoked. Further,

the assessee on facts had further stated that on

and from 1st June, 2007 they have been paying

service tax and earlier there was a doubt as

regards the leviability of the service tax prior

to 1st June, 2007, that too, by artificially

 bifurcating the composite services rendered by
the assessee and therefore, the extended period
of limitation cannot be invoked. That apart, the
assessee had pointed out that they entered into
contracts with reputed companies like TISCO

Ltd. and ICML etc. and in tire contracts which

they have entered into with these listed

companies there was no provision for service

tax as there was no service tax on mining
service during the material period. Furthermore,
all the details were reflected in their books of

account and balance-sheet and also where all the

facts and figures have been explicitly brought

on record and, therefore, the question of

suppression of facts would not arise. Thus, the

specific submission of the assessee could not be

shown to be wrong by the department before the

Tribunal. Thus, the Tribunal has rightly held
that the extended period of limitation cannot be

invoked. While on this issue, it will be

beneficial to refer to the decision of the Hon'ble
 erne Court in Commissioner of Centra]

Excise & Customs (Kerala) vs. Larsen & Toubro

Limited reported in 2015 (39) STR 913 (SC). In

the said decision, the Hon'ble Supreme Court

referred to the decision in. the case of Sabina

Abraham. & Ors. Vs. Collector of Central

Excise & Customs reported in 2015 (322) ELT

372 (SC). In this decision reliance was placed

in the decision in the case of Partington vs

A.G., (1869) LR 4 HL ICQ at 122 wherein Lord

Cairns stated: *'lf the person sought to be taxed

comes within the letter of law he must be taxed,

however great the hardship may appear to the

judicial mind to be. On the other hand, if the

Crown seeking to recover the tax, cannot bring

the subject within the letter of law, the subject

is free, however apparently within the spirit of

law the case might otherwise appear to be. In

other words, if there be admissible in any

statute, what is called an equitable construction,

certainly, such a construction is not admissible

in a taxing statute where you can simply adhere

to the words of the statute."

As could be seen from the above decision, if the

State seeking to recover tax, cannot bring the

subject within the letter of law, then it goes

without saying that the subject is free. The

Hon'ble Supreme Court held that since the

Finance Act lays no charge or machinery to levy

and assess service tax on indivisible composite

contracts, the argument o'f the revenue must

fail. Further, it was pointed that this is also for

a simple reason that there is no subterfuge in

entering into composite works contract

containing element both of transfer of property

and goods as well as labour and service.

In Union of India vs. Indian National

Shipowners Association- reported in (2011) 11

STR 3 (SC), the appeal was filed by the Union

of India against a judgment of the High Court of

Bombay quashing the notice issued by the

appellant therein to the members of the Indian

National Shipowners Association (respondents

therein) by holding that the entry contained in

Section 65(105) (zzzy) of the Finance Act, 1994

does not include service provided by the

members of the association. The Union of India,

appellant therein contended that such service

which were provided by the members of the.

association, have by then, subjected to the

payment of service tax by virtue of the

amendment brought in Section 65(105) by way

of amendment in Finance Act, 1994 with effect

from 16.05.2008 by inserting a fresh entry

namely Section 65(105)(zzzzj). Further, it was

contended by the Union of India that the period

relevant in the said case was from 01.06.2007 to

15.05.2008 and that the amendment was brought

in subsequently but yet, by taking recourse to

Section 65(105) entry No.zzzy, the members of

the association are still liable to pay service

tax. The contention was resisted by the

respondent association therein contending that

the service rendered by their members cannot be

said to be any service in relation to mining of

minerals, oil or gas and have placed before the

Hon'ble Supreme Court the nature and scope of

work which were required to be done by the

members. The High Court of Bombay held that

the nature of work done by the members cannot

be said to be work in relation to mining of

mineral, oil or gas. The Hon'ble Supreme Court,

after considering the relevant provision and the

nature of work that was carried out by the

members of the respondent association therein,

in terms of the contract entered into b-y them

with ONGC held that none of them could be

strictly stated by the service rendered in

relation to mining of minerals, oil or gas and

that the nature of work which has been placed

before the Court cannot be said to be even

remotely connected and included within the

ambit of the provision as found in Section

r^: 65(305), entry no.zzzy and, accordingly, the
order pa.ssed by the High Court of Bombay was
affirmed. This decision also lends support to the
case of the respondent/assessee.

Thus, for the above reasons, we are

satisfied that the appellant was rightly granted
relief by the learned Tribunal and the order
does not call for any interference.

Accordingly, the appeal filed by the

revenue (CEXA/1 1/2024) is dismissed.
Consequently, the substantial questions of law
are answered against the revenue.

The application for stay (lA No.GA/2/2024)

also stands dismissed.

(T.S. SIVAGNANAM, CJ.)

(HIRANMAY BHATTACHARYYA, J.)

//True Cooyy/
rue L^ODU
 ly
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SPECIAL LEAVE PETITION (CIVIL) NO. Of 202^
WITH
[A PRAYER FOR INTEIRM RELIEF]

[Petition under Article 136 of the Constitution of India

arising out of the impugned final order/judgment jdated
09.07.2024 passed by the Hon'ble High Court" of
Calcutta in CEXA No.11/2024]

IN THE MATTER OF:

Commissioner of Service Tax, Kolkata ... Petitioner

Versus

G.S. Atwal & Co. Engineering Pvt. Ltd. ... Respondent

POSITION OF PARTIES
BETWEEN: Before the In this Hon'ble
Hon'ble Court
High Court
Commissioner of Service Appellant Petitioner
Tax, Kolkata having office
at 4, K.S. Road, Raja
Chamber, Floor,
Kolkata-700001 (presently
looked after by
Commissioner of CGST &
ex., Kolkata South
Commissionerate and
having office at GST
Bhawan, 180,
Shantipally, Rajdanga
Main Road, Kolkata-
700107).
 Versus

G.S. Atwal & Co. Respondent Contesting

Engineering Pvt. Ltd., Respondent
having office at 4B,
Nandalal Basu Saranl,
Kolkata-700071

The hon'ble chief Justice of India

And his Companion Judges of the
Hon'ble Supreme Court of India

HUMBLE PETITION OF THE PETITIONER

ABOVENAMED

MOST RESPECTFULLY SHEWETH:

That the instant Petition is being preferred against

the final Impugned judgment/order dated 09.07.2024

passed by the Hon'ble High Court of Calcutta in CEXA

No.11/2024 whereby and whereunder the Appeal filed

by the Petitioner • against the Judgment/Order dated

06.07.2023 passed by the Ld. CESTAT, Kolkata in

Service Tax Appeal No.165/2008 has been dismissed

without any interference and the Judgment passed

by the Ld. CESTAT, setting aside the Order-in-

Original dated 25.09.2008 confirming the demand of

Service Tax and Education Cess amounting to

Rs. 33,10,00,270/- upon the Resp&ndent, has

been upheld, while holding that the Ld. CESTAT

was right in holding that the since 'mining

services* were liable for service tax only with

effect from 01.06.2017, demand of service tax

by invoking extended period is not sustainable

and as the demand was held to be unsustainable

the penalty imposed could not only sustain and

was also set aside

UESTIONS OF LAW

The following Questions of Law arise for the

consideration of the Hon'ble Court:

2.1 Whether The Hon'ble High Court lost sight

of the fact that the services rendered by the

Respondent were wrongly considered as-'Mining

Service' whereas the same were rightly

bifurcated under different heads such as Cargo

Handling Service, Site Formation Service,

Business Auxiliary Service, etc, and the

Respondent was also receiving service charge

against the same from its clients, the circular

dated 12.1 1.2007 relied upon by the Ld.

CESTAT only provided that Mining Services

would not be liable for service however the

same circular clarified that the activities which,

were carried out by the Respondent were infact

covered?

2.2 Whether the Hon'ble High Court as well as

the Ld. CESTAT failed to take into account that

the Respondent had on 04.05.2006 registered

itself with the Service Tax Department, under

service tax head "Site formation and clearance,

excavation and earth moving and demolition

services" and the Respondent being a private

company could not claim exemption under

notification dated 10.09.2004?

2.3 Whether the Hon'ble High Court as well as

the Ld. CESTAT lost sight of the fact that the

Show Cause Notice served upon the respondent

was not under the category *Mining Services'

 but was under three categories i.e. (a) Business

Auxiliary Service from 10.09.2004; (b) Cargo

Handling Service from 16.08.2002; and (c) Site
Formation and clearance, excavation and earth

moving and demolition services ■ from

16.05.2006?

2.4 Whether the Hon'ble High Court as well as

the Ld. CESTAT lost sight of the fact that

Mining Services is a combination of several

services and can be classified in terms of

section 65A(1) of the Finance Act?

2. DECLARATION IN TERMS OF RULE 2(21

The Petitioner states that no other Petition

seeking leave to appeal has been filed by the

Petitioner against the Impugned Final order/

judgment dated 09.07.2024 passed by the

Hon'ble High Court of Calcutta in CEXA No.

11/2016.
3- DECLARATION IN TERMS OF RULE 4

The Annexure P-1 to P-4 filed along with the

present Special Leave Petition are the copies of
the pleadings/ documents which forms a part of
the records below against which the leave to

appeal is sought in the present Special Leave

Petition.

5.1 Because The Hon'ble High Court lost sight

of the fact that the services rendered by the
Respondent were wrongly considered as ^Mining
Service' whereas the same were rightly
bifurcated under different heads such as Cargo
Handling Service, Site Formation Service,
Business Auxiliary Service, etc. "and the

Respondent was also receiving service charge

against the same from 'its clients, the circular
dated 12.11.2007 relied upon by the Ld.
CESTAT only provided that Mining Services
would not be liable for service however the
same circular clarified that the activities which

were carried out by the Respondent were infact

covered.

5.2 Whether the Hon'ble High Court as well as

the Ld. CESTAT failed to take into account that

the Respondent had on 04.05.2006 registered

itself with the Service Tax Department, under

service tax head "Site formation and clearance,

excavation and earth moving and demolition

services" and the Respondent being a private

company could not claim exemption under

notification dated 10.09.2004.

5.3 Whether the Hon'ble High Court as well as

the Ld. CESTAT lost sight of the fact that the

Show Cause Notice-served upon the respondent

was not under the category ^Mining Services'

but was under three categories i.e. (a) Business

Auxiliary Service from 10.09.2004; (b) Cargo

Handling Service from 16.OS.2002; and (c) Site

Formation and clearance, excavation and earth

moving and demolition services from

1 6.05.2006.

5.4 Because the Hon'ble High Court as well as

the Ld. CESTAT lost sight of the fact that

Mining Services is a combination of several

services and can be classified in terms of

section 65A(1) of the Finance Act.

6. GROUNDS FOR I NTERIM RELIEF

6.1 Because The Hon'ble High Court lost sight

of the fact that the services rendered by the

Respondent were wrongly considered as 'Mining

Service' whereas the same were rightly

bifurcated under different heads such as Cargo

Handling Service, Site Formation Service,

Business Auxiliary Service, etc. and the

Respondent was also receiving service charge

against the same from its clients, the circular

dated 12.11.2007 relied upon by the Ld.

CESTAT only provided that Mining Services

 would not be liable for service however the

same circular clarified that the activities which

were carried out by the Respondent were infact

covered.

6.2 Because the Hon'ble High Court as well as

the Ld. CESTAT lost sight of the fact that the

Show Cause Notice served upon the respondent

was not under the category 'Mining Services'

but was under three, categories i.e. (a) Business

Auxiliary Service from 10.09.2004; (b) Cargo

Handling Service from 16.08.2002; and (c) Site

Formation and clearance, excavation and earth

moving and demolition services from

16.05.2006.

6.3 Because the Petitioner has a very good prima

facie case on facts as well as on law and if the

interim relief as prayed is not granted the

Petitioners would suffer gravely. !

7. MAIN PRAYER

In light of the foregoing paras the Petitioner

herein most humbly prays that this Hon'ble

Court may be pleased to:

(a) Grant Special Leave to Appeal against the

Impugned Final order/ judgment dated

09.07.2024 passed by the Hon'ble High Court of

Calcutta in CEXA/1 1/2024; and

(b) Pass any other order/ order(s) as this

Hon'ble Court may deem fit and proper in the

present case;

8. PRAYER FOR INETRIM RELIEF

The Petitioners further most humbly prays that

this Hon'ble Court may be pleased to grant:

(a) Ad-interim ex-parte stay to the effect and

operation of the Impugned Final order/ judgment

dated 09.07.2024 passed by the Hon'ble High

Court of Calcutta in CEXA/11/2024; and/or

(b) Pass any such order/ order(s) as this
Hon'ble Court may deem fit, proper and in the
interest of justice of the Petitioner in the

present case;

Drawn by:
Filed by:
[Ms.Prema Priyadarshini] [GURMEET SINGH MAKKAR]
Advocate Advocate for the Petitioner

PLACE: New Delhi

DATE:26.11.2024
 IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

SPECIAL LFAVR PFTITION fCrVJL) NO. OF 20?4

[Petition under Article 136 of the Constitution of India arising out of
the Impugned Final order/ judgment dated 09.07.2024 passed by the
Hon'blc High Court of Calcutta in CEXA No. 11/2024]
WITH
[A PRiVYER FOR IN'J ERIM RELIEF]

IN THE MATTER OF:

Commissioner of Service Tax, Kolkata ...Petitioner
Versus
G.S. Atwal & Co. Engineering Pvt. Ltd. ...Respondent

CERTIFICATE
CERTIFIED that the accompanying Special Leave Petition is confined
only to the pleadings before the Hcn^ble High Court whose order has
been challenged and the documents relied upon in that proceeding. No
additional facts, documents or grounds have been taken therein or
relied upon in the Special Leave Petition. It is further certified that the
copies of the documents/Annexures attached to the Special Leave
Petition are necessary to answer the Questions of Law raised in the
accompanying Petition or to make out Grounds urged in the Special
Leave Petition for consideration of this Hon'ble Court, This certificate
is given on the basis of the instnictions given by the Petitioner whose
affidavit is filed in support of the accompanying Special Leave
Petition.

PLACE: NEW DELHI GURMEET SINGH MAKKAR

DATE:26s.11.2024 Advocate for the Petitioner
 IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION fCIVILI NO. OF 2024

IN THE MATTER OF:

Commissioner of Service Tax, Kolkata ...Petitioner

Versus

G.S. Atwal & Co. Engineering Pvt. Ltd. ...Respondent

I, Rcsham Dwivedi, Deputy Commissioner, Legal
Cell, Central Board of Indirect Taxes and
Customs, Department of Revenue, Ministry of
Finance, Government of India, do hereby
solemnly affirm and state on oath-as under:

1. That I am the authorized person on behalf of

the Petitioner in the abovementioned matter

and well conversant with the facts and

circumstances of the case therefore
competent to swear this affidavit.
2. That I have read and understood the contents
of the accompany Special Leave Petition
(Para 1 to 8) (Pages to 0), the Synopsis
and List of Dates and Events (Page B to j"C—
)say that the facts stated therein are true and
correct to my knowledge derived from
official records.

(•
%DaH/ y//
IICD INDORa
^OF
 3. That the Annex"ures attached to the Special
Leave Petition is tnie copies of respective
originals.

4. That the facts stated in the above affidavit

are true to my knowledge. No part of the
same is false and nothing material has been
concealed there from.

DEPONENT

VERIFICATION
^ 'Now Delhi

I, the deponent above named, do hereby verify

that the contents of paras 1 to 4 of the aforesaid
affidavit are true and correct to my knowledge
and based on record, no part of its is false and
nothing material has been concealed therefrom.

Affirmed on this the day of December.

2024 at New Delhi.

fo DEPONENT

^SHAM OW/VEDm

ATTESTED ' /Nov/Delhi

BHIfvlSJMviHiNDORA '
NOTARY GOVT. OF INDIA

( "— "osiVi
•:REDATSLNoffl.fcl..''?^^^Tv 3 0 OEC 2024
\\){>\
 ANNEXURE-Pl

GOVERNMENT OF INDIA

MINISTRY OF FINANCE, DEPARTMENT OF

REVENUE

DIRECTORATE OF GENERAL OF CENTRAL

EXISE INTELLIGENCE

KOLKATA ZONAL UNIT, 4/2 KARAYA ROAD

KOLKATA-700 017

DGCEI F No. 206/KZU/KOL/ST/06/

DATED:

M/S G.S.Atwal & Co Engineers (Pvt) Ltd.,

48 Nandalal Bose Sarani, Kolkata-700 071.

NOTICE TO SHOW CAUSE

M/S G.S.Atwal & Co Engineers [Pvt]

Ltd., 4B Nandalal Bose Sarani, Kolkata-700

071 (hereinafter referred to as ' M/S

GSACEPL) mining contractors, are engaged

in the following mining activities viz.

removal of over burden, drilling,

excavation, haulage and crushing of end

products, loading and unloading and

transportation of the end product, etc. as

per mining contract agreement entered into

with M/S TATA Steel Ltd [TISCO), M/.S

ICML and others for [l]Sukinda chromites

mines, Sukinda PO-Kalapani dt-Jajpur, [2]

Orissa Manganese Mines, Joda west, [3]

Sharsatali Coal Mines, Sarisatali, PO-

Kopista, Dt-Burdawan, West Bengal, [4]

Lime Stone mines, Bewar, Rajasthan [5]

Limestone mines, Jaisalmer, Rajasthan and

[6] manganese mines, Khanbad. For

providing the above services they have

been collecting service charges from their

clients/customers as per mining

contract/agreement. Such Services provided

by them appeared to be classifiable under

the categories of [i] Business Auxiliary

Services, [ii] Cargo Handling Services and

[iii] Site Formation and Clearance,

Hxcavation and Earth Moving and

demolition Services as envisaged in clause

 [19], [23], and [97A] respectively of Sec.
65 of Chapter V of the Finance Act, 1994,
as amended and chargeable to Service Tax
as per Section 66 of the said Act.

On the basis of intelligence developed

by the officers of the Directorate General
of Central Excise Intelligence (hereinafter
referred to as DGCEI), Kolkata Zonal Unit,
it appears that the said M/S GSACEPL, got
themselves registered with the Service Tax
Commissionerate, Kolkata vide Service Tax
Registration No. AABCG08 16EST001 dated
05-05-2006 under Service Tax head Site
Formation and Clearance, Excavation and
Earth Moving and demolition Services after
initiation of investigation, but did not pay
any Service Tax on Service charges as.
mentioned above, having the said service
 charges collected from their clients during
the period 1 6.08.2002 to 31-10-2006.

2.0 INVESTIGATION:

An investigation was initiated by the

officers of the DGCEI, Kolkata Zonal Unit

through Summons proceedings under

Section 14 of the Central Excise Act, 1944

as made applicable to Service Tax under

Section 83 of the Finance Act, 1994 as

amended.

2.2.1 A spot Summons dated 19.04.2006

was issued under Section 14 of Central

Excise Act 1944 as made applicable to

Service Tax vide Section 83 of Chapter V
of Finance Act 1994 as amended to Shri

D.N.GUPTA, Chief Executive Officer of

the said M/S GSACEPL [Copy enclosed and

marked Annexure-1 ]. Shri

N.R.Ramchandran, Authorized

Representative of the said M/S GSACEPL

being duly authorized by Shri DN GUPTA,

CEO of M/S GSACEPL appeared before the

proper officer of DGCEI and submitted

copies of Final Accounts for the financial

year 2002-03, 2003-04, 2004-05 vide their

Ref.012/S.TAX-RKL/2006-07 dated

19.04.2006. The, said M/S GSACEPL

submitted the [1] copy of registration

certificate in ST-2, [2] intimation for

granting centralized registration and [3]

balance sheet 2005-06 vide their letter

under reference no. 03 9/S.Tax/2006-07

dated 24.05.06. They also submitted some

copies of work orders issued by TISCO,

Orissa. Subsequently on- 30.06.2006., they

submitted particulars

month/fortnight wise and service wise in

'respect of different jobs undertaken for the

period from 01.04.2002 to 31.03.2006,

 alongwith work orders/agreement.

Summons was also issued to Shri

D.N.Gupta, CEO of M/S GSACEPL on

21.07.2006. [marked as Annexure-2] In

response to Summons dated 21-07- 2006

Shri D.N.GUPTA, Chief Executive Officer

of the said M/S GSACEPL appeared on

25.07.2006 before the proper officer of

DGCEI, Kolkata and tendered a statement

under Section 14 of Central Excise Act

1944 as made applicable to Service Tax

vide Section 83 of Chapter V of the

Finance Act 1994 as amended, wherein he

inter alia, stated the following. [The Copy

of statement is enclosed and marked as

Annexure-3].

2 That he has been looking after the

commercial aspects of M/S GSACEPL

relating to contract, accounts and

purchases. That he is conversant with the

jobs undertaken by M/S GSACEPL on

 contract agreement. The place of operation

for TISCO contracts is in Sukinda in Orissa

for chromites mining and for ICML the

operation is near Sarshatali, Asansol in

West Bengal for coal mining. The activity

for TISCO includes drilling, excavation,

haulage and crushing of some of the end

product. Apart from this, small contracts

relating to drilling, crushing and shifting,

are involved.

J That for ICML, they have also

been doing the mining, which involves

drilling, excavation, etc. as in the case of

TISCO as well as transportation of coal

from mines stack yards to the railway

siding,, 11 KM. from the mines. Thereafter,

the coal is loaded into railway wagons at

the siding. In the case of ICML the running

contract has been operative since 2001 and

in the case of TISCO, the main contract for

excavation has been operative since 1984.

 In the ease of TISCO, they have, from time

to lime, issued secondary orders covering

spot jobs for shifting, crushing and other

activities. Removal of over burden is part

of their contracts for both contracts. In the

case of ICML, this is termed an

'spoilsV'rejects.

2.2.4. He was shown a copy of the letter

dated 28.07.2005 written by Executive in

Charge, FAMD, TISCO Ltd addressed to the

DG, Service Tax, Mumbai, which he

countersigned as seen. In the said letter,

TISCO has opined that 'While producing

chrome ore, overburden removal is inherent

on day to day basis unlike coal and other

minerals where overburden is done first to

get the minerals'. The above opinion of

TISCO shows that removal of overburden is

a coutinuou.s process in case of chrome ore

mining. Sri D.N.Gupta was specifically

asked as to whether he agrees to the above

 view. In reply, Sri Gupta stated that since

TISCO has opined as above, he cannot

refute their views.

5 That for the mining contracts he

stated that M/S GSACEPL raise fortnightly

bills for both TISCO and ICML. For TISCO

spot contracts, the billing is monthly.

6. That Spot' work orders for

transportation of coal/ore/minerals from

Mines to different locations have been

given to their company on different dates.

These contracts given by TISCO are not

related to the main mining contract. These

contracts are for transporting the ore to

TISCO plants outside the lease area.

7. That they have Centralized

registration with the Service Tax

Comraissionerate in Kolkata. The Service

registration number
 AABCG08I6EST001 dated 04.05.2006 for

site preparation and clearing services.

I He admitted that they have not

paid Service Tax till date.

A summons dated 08.09.2006 was

issued to Shri R.N.Ghatak, Executive

Director, M/S GSACEPL [copy enclosed

and marked as Annexure-4], who appeared

before the proper officer on 19.09.2006 and

stated the following, inter alia;

I That he is looking after the

technical side of operation of coal mining

and chromites mining. Chromite mine is

situated at Sukinda PO-Kalapani dt- Jajpur,

Orissa for contract with TISCO. Coal mine

is at Sarishatali, PO-Kopista Dt-Burdawan,

West Bengal under contract for ICML. He

looks after the mining activities in mining

area personally. Coal is overlaid by

overburden, mainly consisting of top soft

 soil, sand stone. To lake out the coal, the

overburden is first removed and the coal is

exposed, which is subsequently excavated.

Chromite is excavated in the same system

of removal of overburden and mining of ore

continues at Sukinda, Orissa. Removal of

overburden is. required to be done at every

stage of mining in case of chromites ore

mines for TISCO and coal for ICML.

2- While detailing and analyzing the

activities generally undertaken at the mines

for extraction of coal, he further stated that

the activities associated with the mining of

coal can be summarized as under:-

[a] removal of top soil and stack it at

a designated place for future use;

[b] after removal of top soil the hard

stone is drilled and blasted and being taken

out to the dump yard with the assistance of

 escalator, dozer, dumper, drills and

dumper,

[c] after exposure of coal, the coal is

similarly taken out by drilling, blasting,

excavation and hauling it to coal yard;

[d] the coal in the yard is dressed

sorted, seized and loaded into transport

truck for its journey to rail way siding:

[e] the coal in the siding is loaded

into railway, wagons for its journey to

plant, etc. for final consumption.

2.3.3 That overlaying strata of coal

consisting of soft soil, hard stone, any

igneous rock is called over burden. In case

of chromites, where the deposit is vertical,

the other rocks or minerals embedding the

chromites is defined as over burden. So far

chromites is concerned, they are removing

the overburden and dumping into the dump

yard. Chromites is excavated and being

dumped in the chromites stacking yard
where other activities are being dealt by
TISCO themselves. The statement of Shri

Ghatak is enclosed and marked as

Annexure-5. '

Another Summons [spot] dated 24-01-

07 was issued Shri D.N.Gupta, Chief

Executive Officer, M/S to GSACEPL (copy

enclosed and marked as Annexure- 6], In

compliance of above summons, Shri

D.N.Gupta appeared before the proper

officer of DGCEI, Kolkata and tendered a

statement under Section 14 of Central.

Excise Act 1944, as made applicable to

Service Tax vide Section 83 of Chapter V

of the Finance Act 1994 as amended on

24.01,07 and in reply to specific query,he

stated as follows:

"Qus. No.l
 Please specify the area of

operation/activity of your company in

respect of the following jobs as stated in

the attachment to your letter dated

02.01.07.

[a] Jaisalmer Job [IISCO], Job

[Rajasthan], [b] Raranagar [C] Noamundi

JOB [TISCO). [d] Joda job [TISCO], [e]

Bewar Job» [f] Mangar job, [g] Sukinda Job

[h] Sarishatali [ICML job] [i] Khanband

job [TISCO] [j] Joda West [TISCO]

Ans: In relation to the above works I

clarify that the specific activities were as

follows:

on
 Corporatio
n

Bewar Extract! Contract Lime stone

Job, on of with DLF
Minerals cement
and
other
allied
works as
per
contract
Ramnagar Extract! IISCO Coal
Job on of
[IISCOL coal
Sarishatal Extracti ICML Coal
i [ICML on of
jobl coal
Noamundi Will be TISCO
Job clarified
[TISCOl, later on.
Khanbarid Extracti TISCO Manganese
job on of ore
[TISCO] ores and
other
allied
works as
per
contract
Joda West Extracti TISCO Manganese/ir
[TISCO] on of on ore
ores and
other
allied
works as
per
contract
Sukinda Extracti TISCO C hromites
Job on of ore
ores and
other
allied
O. works as
per
contract
Mangar Extracti Will Send quarries
on of informed
ores and later on
other
allied
works as
per
contract

In case Joda [TISCO] we have undertaken

job construction of slime dam at Joda.

Qus.2: Whether over burden removal is part and

parcel of your above mentioned contracts?

Ans. I have already clarified in respect of our

contracts with ICML and TISCO, Sukinda
covering coal and chromites extraction
contracts. Concerning the other projects we will
submit clarifications after going through detail
records;

Qus.3 What do you mean by scientific

exploitation as mentioned in your above
attachment?
Ans: The term scientific exploitation was used

by IISCO for contracts negotiated by them for

coal extraction according to methods developed

by their Engineers as set out in the contract

given by them for this job [copy submitted to

you];

Qus;4' In respect of Sarishatali Coal mining

project [ICML] you have charged bills for top

soil, overburden, coal- crushing, transporting

and loading. Please clarify the above activities,

Ans: Top soils extraction and removal includes

mining without drilling/blasting. Overburden

removal is the same activities but includes

drilling/blasting. Coal removal includes mining

with drilling and blasting. After Coal mining, it

is either crushed manually or mechanically to

specified size. This is crush-ing. Transportation:

The crushed coal is transported to the Barabani

siding stack yard for loading into railway

Wagons. It is approximately 11.20 KM from the

mines and it is outside the mining area.

Loading: The stacked coal at Barabani siding is

loaded into railway wagons as and when these

are placed for dispatch to CESC Power Plants.

There is a separate rate for this loading and

bills are raised after the loading is completed

and Railway Receipts [R.R.] are available.

Qus:5 Do you know whether your principal is

paying the Service Tax on transportation

services provided by you?

Ans: In case of ICML the transportation is

carried out outside the mining premises and I

am unable to clarify if they are paying any

service tax on this, account;

In case of TISCO, Sukinda, the

shifting/transportation of ore from blending

yard to Chrome ore beneficiation plant [COB]

[i.e. within the mine premises), I cannot say

 whether they are paying any Service Tax on this
account;

In case of transportation of chrome ore

from SCM to Bamnipai/Jajpur/Randia/Dhenkana!
which are outside the mining areas, I am unable
to clarify if they have paid Service Tax on these
accounts.

Shifting of lumpy chromite ore/ball mill by

pass materials/dust and silt from sumps/old low
grade chrome ore materials to LOP,
Segregations-mix heap/transporting of ore from
blending yard of COB plant to feeding hopper
and ore feeding for reclining hopper, etc. which
was carried out within the mining premises, I
am unable to clarify if they have paid Service
Tax on these accounts.

In respect of Beawar job, transportation of

lime stone is done outside the mining area, I am
unable to clarify if they have paid Service Tax
on these accounts.
 In case of composite contract of ore

breaking and transporting, shifting of finished

lumpy ore/pyroxenite all the activities is carried

inside the mining area, and it is not possible to

bifurcate the amount involved in various

activities.

In case of Ramnagore, IISCO the

transportation is carried out outside the mining

premises and I am unable to clarify if they are

paying any Service Tax on this account;

Qus:6 What do you mean by ash incentive in

ICiML contract?

Ans: The ICML provide an incentive per MT of

coal for lower ash contents in dispatched coal

after scientific analysis;

Qus:7 Please explain the heads as mentioned in

pages 9/11, 11/12 of the attachment to your

letter headed 02.01.07."

Ans: In respect of pages 9/11, 11/12 of the

attachment I will clarify the points as

mentioned therein within 7 days. Copy of

statement is enclosed and marked as Annexure-

M/S GSACEPL were asked to submit details

particulars of jobs done during the period from

16.08.2002 to 31.10.06 vide this office letter

DGCEI 206/KZU/KOL/ST/067787 dt.27.10.06. F

Accordingly on 11.12.06. they submitted

the detailed statement in this regard. The above

statement has been relied in this case and is

enclosed to this notice marked as Annexure-8.

Again they were asked to submit the above

statement financial year wise co-relating the

figures with balance sheet. Accordingly they

submitted a detailed statement in this regard for
the period from 2002-2003 to 2005-06 on
 02.01.07. The same has been relied upon in this
proceeding and is enclosed to this notice
marked as Annexure-9.

Subsequently under their letter reference

309/S.Tax/2006-07 dated 29.01.2007 Shri
D.N.Gupta, CEO had further clarified the
different heads which were hitherto remained
unanswered by him in course of his deposition
dated 24.01.2007 [copy of the said letter dated
29.01.2007 alongwith all attachment is enclosed
and marked as Annexure-10].

STATUTORY PROVISIONS REGARDTNr:

levy of SERVICF. tax and FnTTPATTox^

CESS:

Business Auxiliary Services came into the

purview of Service Tax on and from 01-07-2003
under Sec. 65 (19) of Chapter-V of the Finance
Act, 1994 as amended. Business Auxiliary
Services as tt stands with effect from
10.09.2004, means any service in relation to:-
 "[i] Promotion or marketing or sale of

goods. produced or provided by or

•belonging to the client; or

[ii] Promotion or marketing of service

provided by the clients; or

[iii] any customer care service

provided on behalf of the client; or

[iv] procurement of goods or services,

which are inputs for the clients; or

[v] production or processing of goods

for or on behalf of the client; or

[vi] a service incidental or auxiliary

to any activity specified in sub c]auses[i]

to [vi], such as billing, issue or collection
or recovery of cheque, payments,

maintenance of accounts and remittance,

inventory management, evaluation or

development of prospective customer or

vendor, public relation services,

management or supervision, and Includes
services as commission agent, but does not

include any information technology service

and any activity that amounts to

"manufacture within the meaning of clause

[f] of section 2 of the Central Excise Act,

1944.

Explanation-For removal of doubts, it

is hereby declared that for the purpose of

this clause:-

[a] Commission agent means any

person who acts behalf of another person

and causes sale or on purchase of goods, or

provision or receipt of services, for a

consideration and includes any person who,

while acting on behalf of another person-

[i] deals with goods or services or

documents of title to such goods or

services or

[ii] collects payment of sale price of

such goods or services; or

 [iii] guarantees for collection or

payment ofor such goods or services; or

[iv] undertakes any activities relating

to such sale or purchase of such goods or
services;"

Clause [V] of sec.65 [19] of chapter V

of the Finance Act, 1994 as amended on

10.09.2004 as mentioned above is squarely

applicable to the activities of M/S

GSACEPL as 'production or processing of

goods', for or on behalf of client".

Clause (zzb) of Sec.65 (105) of the

Finance Act, 1994 as amended defines:

The definition of taxable service

provided by a commercial concern has been

given under sub-clause [zzb] of clause 105

of section 65, that is, any service provided
or to be provided, "to a client, by a
commercial coiicern in relation to Business

Auxiliary Service".

Cargo Handling Services:

The definition of cargo handling has

been given under clause [23] of section 65.

That is:

"Cargo handling services means

loading, unloading, packing or un packing

of cargo and • includes cargo handling

services provided for freight in special

containers or for no containerized freight,

services provided by a container freight

terminal or any other freight terminal, for

all modes of transport and cargo handling

services incidental to freight, but does not

include handling of export cargo or

passenger baggage or mere transportation

of goods".

The definition of cargo handling

service is very wide, the following services

 will fall under the Category of cargo
handling service-

fa] loading, unloading, packing or

unpacking of cargo;

[b] freight in special containers or for

non containerized freight services provided

by a container freight terminal or any other

" freight terminal;

[c] cargo handling services incidental

freight, to

The definition of taxable service

provided by a cargo handling agency has

been given under sub-clause [zr] of clause
105 of section 65, That isr any service
provided or to be provided, to any person,
by a cargo handling agency in relation to

cargo handling services".

The Finance Act, 2005, w.e.f. 16-06-

2005 as amended the clause [105] of

section 65, to extend the scope of taxable
r-i. services' so as to include the 'services to

be provided and to clarify that taxable

services would include such services

provided from outside India to a recipient

in India for detail.

3.1.3. Site Formation and Clearance,

Excavation and Earth Moving and
demolition Services

Site preparation service means service

in relation to site formation and clearance,

excavation earth moving and demolition

and such other similar activities.

The definition of site formation and

clearance, excavation, earth moving and

demolition has been given under clause
[97a] of section 65. That is:" site formation

and clearance, excavation and earth moving

and demolition" includes,-
 [i] drilling, boring and core extraction

services for construction, geophysical,

geological or similar purposes; or

[ii] soil stabilization; or

[iii] horizontal drilling for the passage

of cables or drain pipes; or

[iv] land reclamation work, or

[v] contaminated top soil stripping

work; or

[vi] demolition and wrecking of

building, structure or road,

but does not include such services

provided in relation to agriculture,

irrigation, watershed development and

drilling, digging, repairing renovating or

restoring of water sources or water bodies.

The Finance Act, 2005 has levied the

tax for the services in relation to site

formation, cleaning and excavation and

/=^ ;
t demolition. It may be noted that Service

Tax is also levied on commercial or

industrial construction, but it does not

include the roads, airports, railways,

bridges, tunnels, dams and transport

terminals. It is evident from the definition

itself that site formation, demolitions are

inclusive definition and the activities'

specifically mentioned therein are only

indicative and not exhaustive.

Prior to construction of buildings,

factory or any civil structure, activity of

mining or laying cables OX pipes,

preparation services of site formation and

clearance, excavation and earthmoving or

leveling are normally undertaken includes

blasting and rock removal work, clearance

or undergrowth, drilling services of

mineral properties and sites, and other

similar excavating and earth moving

services. Demolition of structures.
buildings, streets or highways is also

undertaken for consideration as preparatory

activity for subsequent construction

activity of for clearing the site for any

other purpose. All such activities fall

within the scope of this service.

The definition of taxable service

provided by service provider in relation to

site preparation has been given under sub-

clause [zzza] of clause [105] of section 65.

That is:

Any service provided or to be

provided" to any person, by any other

person in relation to site formation and

clearance, excavation and earth moving and

demolition and such other similar

activities. [As per para 6.2 TRU'S LETTER

F.No.Bl/6/2005-TRU dated 27th July 2005]

The Finance [No.2] Act, 2004 has

introduced levy of an education cess 82%

Oi: under Chapter VI of the said Act. Sec.. 95

of Chapter VI of the Finance Act [No.2]

2004 which provides Education Cess on all

taxable services, is produced below:

"95 [1] The Education Cess levied

under section 91, in the case of all services

which are taxable services,, shall be a tax

[in this section referred to as the education

cess on taxable services] at the rate of two

per cent, calculated on the tax which is

levied and collected under section 66 of he

Finance Act, 1994.

[2] The Education cess on the taxable

services shall be in addition to the tax

chargeable on such taxable services, under

Ch-apter V of the Finance Act, 1944.

[3] The provisions of Chapter V of the

Finance Act, 1994 and rules made

thereunder, including those relating to

refunds and exemptions from tax and

 imposition of penalty shall, as far as may
be apply in relation to the levy and
collection of the Education Cess on taxable

services, as they apply in relation to the

levy and collection of such taxable services

under Chapter V of the Finance Act, 1994

or the rules, as the case may be."

4.0 FUNCTION OF THE NOTICEE AND

CLASSIFICATION OF THE SERVICK

RENDERED:

From the investigation' conducted

against the said noticee vis-a-vis the

statutory provisions, the following salient

points emerged.

4-1.1 ■ One of the important activities

involved in open cast mining is removal of

stratum (layer of mud, boulders etc that

forms horizontal/vertical layer over the

deposits of coal/ore and other minerals).

The material so removed to expose the
 layer of coal/ore and other mineral or is

called as 'overburden'. The overburden has

to be necessarily removed and transported

to some other part of the mines. Thereafter,

coal/ore and other mineral is extracted and

brought at the pit-head. Later, these are

shifted -within or outside the mine. The said

M/S GSACEPL has undertook the following

activities as per the agreement with M/s

TISCO and M/s ICML.- *

(a) Removal of the overburdens.

[b] removal of top soil and stack it at

a designated place for future use,

[c] coal/ore/minerals is taken out by

drilling, blasting, excavation

[d] Loading of coal/ore/minerals and

lifting them upto pithead. Conversion of

ore/coal/minerals into lump size;

(e) Transportation of coal/ore/minerals

from pit head to a specified location within

the mine/factory or for transportation

outside the mine / factory (to railway

sidings etc.).

Coal/or e/minerals

cutting/extraction acti viti es

coal/ore/minerals mining;

M/s ICML have awarded mining

contract to M/S GSACEPL for mining

activity at Sarshatali, WB. M/S GSACEPL

deploys workers and machinery for removal

of overburden, excavation, extraction/

breaking of coal, conversion of coal

layers/starter into lump size,

loading/unloading and transportation, etc.

Similar activities are also done in case

of ore mining as has been admitted by Shri

R.N.Ghatak,

Executive Director of M/S GSACEPL. It is

also seen that the following activities have

 to be undertaken in case of both ore as well

as coal mining.

(a) Removal of the overburdens.

(b) removal of top soil and stack it at

a designated place for future use,

(c) coal/ore and other minerals are

taken out by drilling, blasting, excavation;

(d) Loading of coal/ore and other

minerals and lifting them upto pithead.

Conversion of pre/coal, etc. into lump size;

(e) Transportation of coal/ore and

other minerals from pit head to a specified

location within the mine/factory or for

transportation outside the mine / factory

(to railway sidings etc.).

(f) Cutting/extraction activities of

coal/ore and other minerals for mining

4.1.3. Classification of taxable services

is required to be done as per the provision

 of sec. 65 A of the finance act 1994 as

amended which provides

[1] for the purposes of this chapter,

classification of taxable services shall be

determined according to the terms of the

sub-clauses of clause [105] of section 65.

[2] when for any reason, a taxable

service, is prima facie, classifiable under

two or more sub- clauses of clause [105] of

section 65, classification shall be effected

as follows:-

[a] the sub-clause which provides the

most specific description shall be preferred

to sub-clauses providing a more general

description; 7

[b] composite services consisting of

combination of different services which

cannot be classified in the manner

specified in clause [a] shall be classified

as if they consisted of a service which

 gives them their essential character, in so

far as this criterion applicable;

[c] when a service cannot be classified

in the manner specified in clause (a) or

clause [b], it shall be classified under the

sub-clause which occurs first among the

sub-clauses which equally merit

consideration.

In order to determine the appropriate

classification of the services rendered by

M/s GSACEPL to M/s TISCO, M/S ICML

and others at different mine premises the

running accounts bills submitted by M/S

GSACEPL have been scrutinized at random.

4.2 Business Auxiliary Services:

4.2.1. On examination of the Running

A/C Bills vis-a- vis the Work

Order/Contracts submitted by them in this

regard, it is seen that:-

 M/S. GSACEPL undertakes the

following jobs at the Sukinda Chrome ore

mines/ICML, Sarsatoli Coal Mines,

Manganese Mines, Khanbad and Joda, Lime
Stone mines, Bewar, Jaisalmer,

(1) Hiring & deployment of Pay

Loader at Stock Yard.

(2) Hiring & Deployment of HEMM for

excavation, dumper and other allied

machinery for the excavation and

transportation/dumping of ROM from mine

face to crushing plant.

(3) Removal operation of Overburden

by mechanized

(4) Deployment of HEMM for

development of Pyroxenite.

(5) Hole making in the leveled slacks

of Silicious Lumpy ore/Pyroxenite.

 (6) Drilling Pre-slit hole in new

Magazine area.

(7) Laying of Hume Pipe

(8) Removal of Top Soil.

(9) Processing/Crushing of ore

(10) Mechanized Screening & Crushing

(11) Ore breaking, transporting,

finished lumpy ore/ Pyroxenite. Shifting of

(12) Hiring of water tank at stack

Yard.

(13) D-slitting of the Blow down area.

(14) Hiring & deployment of rock-

breaker for breaking of over size

pyroxenite.

(15) Crushing of hard lumpy

ore/boulders.

(16) Deployment of mining sirdar

(1 7) Pond Cutting.
 (18) Excavation settling pond.

(19) Widening haul road

(20) coal/ore and other minerals

excavated

(21) Collection of different grade of

Manganese ore & iron ore

(22) Deployment of dumper for

transfer of metal, slag & mixture to

dumping yard and other works incidental

and auxiliary to the above works as

mentioned serial no. (1) to (22) above.

2. In the above job details, it may be

seen that hiring and deployment of HEMM,
Dumper, Pay Loader or mines Sirdar has

been mentioned therein, buf the fact

remains that no amount has been paid as

hiring charges and the full amount

mentioned in Running A/C Bills has been

 paid for the quantity of work done/final

output given vis-a-vis quantum of

overburden/ lop soil removed, quantum of

coal/ore and other minerals excavated

quantum of coal/ore and other minerals

screened/crushed, etc. Therefore, the entire

amounts mentioned in the said bills have

been taken into account for determination

of the total job value.

All the above mentioned activities

done by M/S GSACEPL were in relation to

the basic business of the respective
companies i.e. M/s. TISCO (for Sukinda,
Joda, Jaisalmer) or M/s Ambuja Cement
[Now DLF Cement] Bewar mines and M/s.
ICML [for Sarsatoli mines] who got the
jobs done by way of outsourcing the
service of M/s. GSACEPL in respect of
their basic business like production or
processing of coal/ore and other minerals
for use or for further manufacture of goods
or for sale. Hence the above activities of

M/S GSACEPL appeared to be classifiable

as production or processing of goods for,

or on behalf of, the client and is chargeable

to Service Tax under business auxiliary

service in terms of the definition contained

in Sec. 65 (105) (zzb) of the Finance Act,

1994 as amended with effect from

10.09.2004 read with Notification No.

14/2004 dated 10.09.2004 and N-otification

No. 19/2005 dated 07.06.2005. In the

instant case M/s GSACEPL, being a Private

Ltd Company, is not eligible for the

exemption granted u-nder notification No.

14/2004-ST dated 10.09,2004.

1. Again, sometimes the mining

companies award contract for open cast

mining to outsiders. The contractor deploys

workers and machinery for extraction/

breaking of coal/ore and other minerals,

conversion of ccal/ore and other minerals

 layers/starter into lump size, etc. Taxable

service, namely, 'Business Auxiliary

Service includes activities which are in the

nature of production or processing of goods

for or on behalf of the client' provided any

such activity does not amount to

'manufacture' within the meaning of clause

(f) of section 2 of the Central Excise Act,

1944. In the instant case the contractors

undoubtedly produce coal/ore and other

minerals for their clients, namely the

coal/ore and other minerals companies.

Further, extraction of coal/ore and other

minerals is not a process amounting to

manufacture within the meaning of section

2 (f) of the Central Excise Act. Therefore,

such an activity would fall under the

purview of 'business auxiliary service*

w.e.f. 10.09.2004.

4.3. Site formation and clearance, excavation,

earth moving and demolition services:-

4.3.1. Site formation and clearance,
excavation, earth moving and demolition

services came into effect from 16.06.2005

by virtue of Notfn. No. 15/2005 dt.

7.6.2005 which means any service provided

or to be provided to any person, by any
other person in relation to site formation

and clearance, excavation and earth moving

and demolition and such other similar

activities Sec. 65 (105) (zzza).

Sec.65 (97a) specifies definition of

the said service

The definition of site formation and

clearance, excavation, earth moving and

demolition has been given under clause

[97a] of section 65. That is:" site formation

• and clearance, jcxcavation and earth moving

and demolition" includes,-
 [i] drilling, boring and core extraction

services for construction, geophysical,

geological or similar purposes; or

[ii] soil stabilization; or

[iii] horizontal drilling for the passage

of cables or drain pipes; or

[iv] land reclamation work; of

[v] contaminated top soil stripping

work; or

[vi] demolition and wrecking of

building, structure or road,

but does not include such services

provided in relation. to agriculture,

irrigation, watershed development and

drilling, digging, repairing renovating or

restoring of water sources or water bodies.

Therefore, it appears that the said

definition is an inclusive definition and the

activities mentioned therein at SI. No. (1)

 are only illustrative and not

exhaustive. The very word "Similar

activities" as in Sec. 65 (105) (zzza) is of

utmost importance which indicates that all

the activities similar in nature are also

included in this service.

2. M/s. GSACEPL undertakes the

following activities in Sukinda Chrome Ore

mines, Sarishatali Coal Mines/ Joda

Manganese & Iron Ore Mines/ Bewar &

Jaisalmer Lime Stone Mines as per

agreement with M/s. TISCO/M/s.

ICML/M/S Ambuja Cement;

(1) Removal operation, of overburden

by mechanized

(2) Removal of Top Soil over burden

at Sarishatoli Coal Mines.

(3) Hole making in the levelled Stacks

of Silicious Lumpy Ore/ Pyroxenite.

 >
9-

i
V 16
(4) Drilling Pre-Split hole in new

Magazine area.

V" (5) Laying of Home Pipe (Blow Down

area)

•
(6) Deployment Pyroxenite. of HEMM
for development of

(7) Excavation/

i
(8) Hiring of payloader at stack yard

(9) processing [crushing) boulders at -

SCM of Pyroxenite

(10) Mechanized friable chrome ore

screening and crushing friable chrome ore
•-
(11) ore breaking and transporting.
•

shifting of finished lumpy /pyroxenite ore;

■t (12) Hiring of water tanker at stack 1

yard at SCM

''
(13) Hole making in the leveled st.cks
: solicious lumpy ore/pyroxenite;
 (14) D-silting of the blow down area

(15) hiring of rock breaker for

breaking of oversize pyroxinite;

(16) deployment of D155A dozer,

(17) crnshing of hard lumpy ore

boulders at SCM;

(18) soil, over burden, coal crushing,

mining.

sardar, pond cutting, excavation settling

pond, widening haul road, coal excavated,

5. The scope of this service has been

explained in circular No.B1/6/2005-TRU

dated 27.07.2005 (para 6.2). This taxable

service covers certain activities like site

formation and clearance, excavation and

earthmoving and demolition. While site

formation and clearance may be a

preparatory activity, excavation and

earthmoving activities need not be

preparatory activity.

Therefore, the argument that the

taxable service is limited to preparatory

services does not stand the test of law. The

definition of open cast working' (i.e. 'open

cast working means a quarry, that is to say

an excavation where any operation for the

purpose of searching for or obtaining

material) itself calls the activity

'excavation'. of open cast mining as

Therefore, activity

excavation/drilling and removal of

overburden (whether or not containing

traces of minerals) is taxable under the

aforesaid taxable service.

The definition of site formation

and clearance, excavation and earthmoving

and demolition is an inclusive definition

and the activities specifically mentioned

are indicative and not exhaustive. Prior to

construction of buildings, factory or any

civil structure, activity of mining or laying

of cables or pipes, preparation services of

site formation and clearance, excavation

and earthmoving or leveling are normally

undertaken for a consideration to make the

land suitable for such activities. Such

services include blasting and rock removal

work, clearance of undergrowth, drilling

and boring, overburden removal and other

development and preparation services of

mineral properties and sites, and other

similar excavating and earthmoving

services.

Therefore the above activities

appear to be rightly classifiable under site -

formation and clearance, excavation, earth

moving and demolition services as per the

definition under Sec. 65 (974) and become

 chargeable to Service Tax under Sec. 66 of

the Finance Act, 1944 as amended.

4.3.6. However, site formation and

clearance, excavation, earth moving and

demolition services' came into effect from

16.6.05. All such services as in [1] to [7]

as mentioned in para 4.3.2. above appears

to be amply covered under Business

Auxiliary Services from 10.09.2004 to

15.6.05 being incidental and auxiliary in

nature for completion of the basic activity

of the principal of offers contract viz,

TISCO, ICML, etc. in the instant case.

4.4. Cargo Handling Services:

I. The said M/S GSACEPL have

been awarded contract for Foading of coal

in tippers at pit head and unloading at the

railway sidings. Similar contracts are also

executed by them for loading and unloading

overburdens within the mines area. The.job

 basically involves deployment of labour

and pay loaders.

2. Similarly, loading and unloading

of cargo falls, under Cargo Handling

Services, so far as there is a contractual

agreement and a consideration is paid for

it. Secondly, dictionary meaning of cargo

is a load, a burden or a charge'. Therefore,

the term Cargo includes a load, whether or

not it has a market value. Therefore, all

such contracts for loading unloading falls

under the Cargo Handling Services, and

J. Nature of different job undertaken

by M/S GSACEPL at, various sites and

copy of the agreement dated 11.06.01 for

carrying out transportation work of lime

stone within the crusher area between M/s.

GSACEPL and M/s. Ambuja Cement

[subsequently taken over by DLF Cement)

has been taken into account. The- said

 agreement specified THAT M/S GSACEPL

would be responsible for all aspects of

collection of materials, transportation and

delivery of the same to the Crusher Hopper.

Since the subject material is lime stone, all

aspects involved in such transportation

includes inter-alia, loading/unloading of

the material with is Incidental to

transportation & delivery, (vide clause 1.1

of the agreement). The said activity

appears to be classifiable under Cargo

Handling Services, as defined in the

Finance Act, 1994 and is liable for such tax

at the appropriate rate.

4.5. As regards the transportation of coal done

by M/s GSACEPL in th'e Sarshatali Coal

Mines [ICML] M/s ICML vide their letter

dated 02.02.2007 informed that the Service

Tax involved in the GTA services is being

discharged by them. They also submitted

billwise details and quantum of Service Tax

paid frora 01.01.0.5 to 31.12.06. M/s TISCO

informed vide their letter Ref. No.

FC/FAMD/38/ dated 05 02.07 that M/S

GSACEPL had not rendered any goods

transport agency service. Hence payment of

Service Tax does not arise [copies of the

letters enclosed and collectively marked as

Annexnre- 11]

From the above as stated in para 4.1.1.

to 4.5. supra it appears that the said M/S

GSACEPL are providing services to M/S

TATA Iron and Steel Company Ltd [TISCO]

located at Sukinda, Joda, Jaisalmer, M/s

Ainbuja Cement for Bewar mines and M/s.

ICML [for Sarsatoli mines). They are

receiving the contract for execution of

work of earth cutting, over-burden removal,

extraction and transportation of minerals

and blasting and removal loading and

unloading of materials, site formation,

other incidental and ancillary services

relating to the above services of rocks,

drilling, etc. and receiving the payment

also on the basis of quantum of the work

executed. Thus work done by them comes

under the perview of the following

services, which is classifiable under [A]

Business Auxiliary Services [B] Cargo

Handling and (C) Site Formation and

Clearance, Excavation, Earth moving and

demolition as envisaged in clause [19],

[23] and [97A] respectively of Section 65

of chapter V of the Finance Act, 1994 as

amended and Service Tax is leviable under

Section 66 of the said Act on the said

amount collected.

They got themselves registered with

Service Tax Authority registration No.

AABCG0816EST001 dated 05-05- 2006

under site formation and clearance services

only after initiation of the investigation by

 this office. But they have not discharged
their. Service Tax liability till date.

5.0 APPLICABILITY OF extended

period of TIMT. T TA/TTX-

As envisaged in the first proviso to

Sub-Section (1) of Sec 73 of the Finance
Act, 1994 as amended, it appears that M/S
GSACEPL by way of their act of omission
and failure, suppression of material facts

with an intent to evade payment of Service

Tax, did not get themselves registered with
the Jurisdictiona! Service Tax Authority in
time and did not disclose substantial

amount collected and failed to discharge

their Service Tax liability including
Education Cess amounting

Rs.33,10,00,270/-(Rs. thirty three Crore

ten Lakh two Hundred seventy only)
during the period from 16.08.2002 to

31.10.06 fcalculation sheet enclosed and

OV m_a 1'ked as Anpexure-Cl. The said amount

is recoverable from said M/S GSACEPL,

under the first proviso to Section 73 of the

said Finance Act ]994 and under Sec.91

and 95 of the Finance (No.2) Act, 2004.

6-0 CALCULATION OF SERVICE TAX

PAYABLE BY M/S GSACKPL,

KOLKATA:

Total head wise Service charges

collected by M/S GSACEPL intimated to

DGCEI, Kolkata vide their office letter

dated 11.12.06 and has been relied in. On
the basis of the above statement, category
wise Service Tax liability has been

determined as in the table below:

Details Gross Amount Edu. Total

of value of of Cess S.Tax
Servjce Services Service
Tax
Business 232359191 20150519 248234 20398753
Auxiliary
Service
[10.09.04
J
Cargo 1778.12588 17965269 359305 18324574
Handiing |4 0 4 4
Total 32,46,61 » 63,38,4 33,1 0,00,
81 0 60 270
Figure in Rupees

The total tax liability in respect of

M/S GSACEPL stands at Rs. 32,46,61,810/-

[Rs. thirty two Crore forty six Lakh sixty

one Thousand eight Hundred ten only] plus

education cess Rs. 63,38,460/-[Rs.' sixty

three Lakh thirty eight Thousand four

Hundred sixty only) total amounting to Rs.

33,10,00,270/-[Rs. thirty three Crore ten

Lakh two Hundred seventy only) for the

period from 16.08.2002 to 31.10.2006.

Calculation sheet of evasion of Service Tax

by M/S GSACEPL under the instant

investigation is enclosed and marked as

Annexure-C.

7.0 CONTRAVENTION OF STATUTORY

PROVISIONS:
 Thus, the said M/S GSACEPL, the

noticee, appeared to have contravened

[a] the provisions of Sec. 68 of the

Finance Act, 1994 as amended read with

rule 6 of the Service Tax Rule 1 994 as

amended, in as much as they failed to pay

the Service Tax at the rate specified in

Sec.66 in the required manner within the

prescribed period;

[b] the provisions of Sec. 69 of the

Finance Act, 1994 as amended read with

rule 4 of the Service Tax Rule 1 994 as

amended, in as much as they failed to make

application for registration within the

required time in prescribed manner and in

prescribed form for Business Auxiliary

Service" and thereby did not get themselves

registered for that service, and

[c]the provisions of Sec. 70 of the

Finance Act, 1994 as amended read with

 rule 7 of the Service Tax Rule 1994 as

amended, in as much as they failed to

assess the tax due on the services provided

by them and to furnish the return in

prescribed form and in prescribed manner

and at the prescribed frequency.

[d] the provisions of Sec. 91 and Sec.

95 of the Finance (No.2) Act, 2004, in as

much as they failed to pay the appropriate

Education Cess on the appropriate Service

Tax payable by them.

.0 Now, ■ therefore, the said M/S

GSACEPL are hereby directed to show

cause to the Commissioner of Service Tax,

Service Tax Coramissionerate, Raja

Chamber, 3d floor, 4 Kiran Shankar Roy

Road, Kolkata-700 001, within 30 [thirty]

days from the date of receipt of this notice,

as to why:-
[i] Service Tax to Rs. 32,46,61,810/-[Rs.

thirty t^vo Crore forty six Lakh sixty one

Thousand eight Hundred ten only) plus

education cess Rs. 63,3S,460/-[Rs. sixty

three Lakh thirty eight Thousand four

Hundred sixty only) total amounting to

Rs. 33,10,00,270/-[Rs. thirty three Crore

ten Lakh two Hundred seventy only]

should not be recovered from them

invoking the extended period of time limit

as envisaged under the sub-section of

section 73of the Finance Act, 1994 as it

existed till 09.09.2004 the first proviso to

the Sub-Section (1) of Sec. 73 of the

Finance Act, 1994 as amended thereafter.

[ii] Interest at an appropriate rate under

section 75 of chapter V of the Finance Act,

1994, [as amended] should not be

charged/demanded from them as applicable

during the material period for the delayed
payment of Service Tax including

Education Cess;

[iii] Penalty should not be imposed upon

them in terms of Section 76, 77 and 78 of

Finance Act, 1994 as amended for failure to

pay Service Tax including Education Cess

and for contravention of the provisions of

Sec. 68, 69 and 70 of Chapter V of the

Finance Act, 1994 as amended and Sec.91

and 95 of the Finance (No.2) act, 2004 and

The said M/S GSACEPL, the noticee,

is further informed that:

[i] they should indicate in their

written reply as to whether they would like

to be heard in person or through their legal

representative before the case is

adjudicated, failing which, it would be

presumed that they do not desire any

personal hearing;
o:. [ii]they should furnish all the

evidences upon which the intend to rely in

support of their defence at the time of

showing cause against the above proposed

action

[iiijif no cause is shown within the

stipulated period of 30 (thirty) days from

the date of receipt of this notice and they
fail to appear before the adjudicating
authority when the case is posted for
hearing, the case will be adjudicated ex-
parte on the basis of the available records

without any further reference to the

noticee.

10.OA list of documents relied upon for

issuance of the instant show cause notice is

enclosed as Annexure-R. The noticee is at

liberty to inspect and or to take extract of

the same on prior appointment made with

 the officers of DGCEI on any working day

during office hours:

11.0 This notice is issued without prejudice to

any other action that may be initiated

against the noticee under the provisions of

the Finance Act 1994 (Service Tax) or rules

framed there under or under any other law

for the time being in force in India.

Enclo: Annexure R containing list

of Annexures alongwith Annexures
as mentioned above.

SD/-

(K.K.KABIRPANTHI)
ADDITIONAL DIRECTOR
GENERAL,
DGCEI. KOLKATA ZONAL UNIT

DGCEI NO.206/KZU/KOL/ST/06/1758

Dated: 14.03.07

Copy alongwith Annexure-R containing list

of Annexures for adjudication proceedings to:

1. The Commissioner, Commissionerate of

Service Tax, 3rci Floor, Raja Chambers, 4,

K.S.Roy Road, Kolkata 700 001.

2. The Additional Director General, DGCEI,

West Block No. VIII, Wing No.VI, 2nd Floor,

R.K. Puram, New DeIhi-1 10 066.

3. The Additional Commissioner,

Commissionerate of Service Tax, 3rd Floor,

Raja Chambers, 4, K.S. Roy Road, Kolkata 700

4. The Assistant Commissioner, Service Tax,

Division-Ill, Service Tax Commissionerate

Kolkata, 9 Old Post Office Rd., 4'*> floor,

Kollcata-700 001.

Sd/-

(B.K.MALLICK)
ADDITIONAL DIRECTOR,
DGCEI. KOLKATA ZONAL
UNIT

//True Copv//
 ANNEXURE-P2

GOVERNMENT OF INDIA

OFFICE OF THE COMMISSIONER OF SERVICE

TAX

4, K.S.ROY ROAD, RAJA CHAMBER, 3'"^

FLOOR,
KOLKATA-7QOOO 1
C.No.-V(5) 24/ST-Adjn/Commr./07

Date:

ORDER (ORIGINAL) NO.

01/Commr/ST/Ko]/2008-09

DATE: 29.05.08

PASSED BY :K.R.N.Chary,

Commissi oncer Service

Tax, Kolkata

ORDER-IN-ORIGINAL

N.B. 1. This copy is granted free of charge for

the private use of the person to whom it is

issued.

i) Any perso-n deeming himself aggrieved

by this order may appeal in duplicate

 against the same to the Central Excise

and Service Tax Appellate Tribunal

(CESTAT), 169 AJC Bose Road, Bamboo

Villa, 7th Floor, Kolkata-7000 1 4.

ii) The appeal must be filed within

90(ninety) days from the date of

communication of the above.

iii) The appeal petition should be affixed

with Court Fee Stamp of appropriate

amount.

iv) Appeal should be filed in quadruplicate

in form ST-5 (vide Sec.88 of Finance Act

1994) and shall be accompanied by the

copy of the order / decision appealed

against which should bear a Court Stamp

as appropriate.

Subject: Service Tax case proceedings in

respect of Show Cause Notice bearing DGCEI

F.NO.206/KZU/KGL/ST/06/1757 dated 14.03.07

issued against M/s G.S. Atwal & Co. Engineers

 Pvt. Ltd., 4B, Nandalal Bose Sarani, IColkata-
700 071- Adjudication thereof.

M/s G. 5. Atwal & Co Engineers (Pvt.) Ltd., 4B

Nandalal Bose Sarani, Kolkata-700 071
(hereinafter referred to as M/s GSACEPL)
mining contractors, are engaged in the
following mining activities viz. removal of over

.burden, drilling, excavation, haulage and

crushing of end products, loading and unloading
and transportation of the end product, etc. as
per mining contract agreement entered into with

M/s TATA Steel Ltd. (Tisco), M/s ICML and

others for (I) Sukinda chromites mines,

Sukinda-Kalapani dt- Jajput, (2) Orissa
Manganese Mines, Joda west, (3)' Sharsatali
Coal Mines, Sarisatali, PO Kopista, Dt-
Burdawan, West Bengal, (4) Lime Stone mines,
Bewar, Rajasthan (5) Limestone mines,
Jaisalmer, Rajasthan, Rajasthan and (6)
manganese mines, Khanbad.* For providing .the
above services they have been collecting service
r^: charges from their clients/customers as per
mining contract/agreement. Such Services
provided by them appeared to be classifiable
under the categories of (i) Business Auxiliary
Services, (ii) Cargo Handling Services and (iii)
Site Formation and Clearance, Excavation and
Earth Moving and demolition Services as
envisaged in clause (19), (23), and (97A)
respectively of Sec. 65 of Chapter^V of the
Finance Act, 1994, as amended and chargeable
to Service Tax as per Section 66 of the said Act.

The said M/s GSACEPL were directed to show

cause to the Commissioner of Service Tax,
Service Tax Commissionerate, Raja Chamber,
3rd floor, 4 Kiran Sankar Roy Road, Kolkata-
700 001, within 30 (thirty) days from the date
of receipt of this notice, as to why:-

(i) Service Tax to 32,46,61,810/-(Rupees

thirty two Crore forty six Lakh sixty one
Thousand eight Handred ten only) plus
 Education Cess Rs. 63,38,460/- (Rupees

sixty three Lakh thirty eight Thousand

four Hundred sixty only) total amounting

to Rs. 33,10,00,270/- (Rupees thirty

three Crore ten Lakh two Hundred

seventy only) should not be recovered

from them invoking the extended period

of time limit as envisaged under the sub

section of section73 of the Finance Act,

1999 as it existed till 09.09.2j004 the

first proviso to the sun-Section (1) of

Sec. 73 of the Finance Act, 1994 as

amended thereafter.

(ii) Interest at an appropriate rate under

section 75 of chapter-V of the Finance

Act, 1994, (as amended) should not be

charged/demanded from them as

applicable ditring the material period for

the delayed payment of Service Tax

including Education Cess;

 100
(iii) Penalty should not be imposed upon them
in terms of Section 76, 77 and 78 of

Finance Act, 1994 as amended for failure

to pay Service Tax including Education

Cess and for contravention of the

provisions of Sec. 68,69 and 70 of

Chapter V of the Finance Act, 1994 as

amended and Sec. 91 and 95 of the

Finatice (No.2) Act. 2004.

BRIEF FACTS OF THE TA.qF

M/s GSACEPL got themselves registered with

the Service Tax Commissionerate, Kolkata vide
No. AABCG0816EST001 dated 05.05.2006 under
Service Tax head. Site Formation and Clearance,
Excavation and Earth Moving and demolition
Services" but did not pay any Service Tax on
service charges collected from their clients
during the period 16.08.2002 to 3 1.10.2006. An
investigation was initiated by the officers of the
DGCHI, Kolkata Zonal Unit through Summons
 101

proceedings under Sec. 14 of Central Excise

Act, 44 as amended.

A spot summon dated 19.04.2006 was issued

under Section 14 of Central Excise Act, 1944 as

made applicable to Service Tax vide Section 83

of the Finance Act, 1994 to Shri D. N. Gupta,

Chief Executive Officer of the said M/s

GSACEPL. Shri N. R. Ramchandran, authorised

representative of the said M/s GSACHFL being

duly authorised by Shri D. N. Gupta, CHO

appeared before the proper officer of DGCEI

and submitted copies of Final Accounts for the

Financial year 2002-03, 2003-04, 2004-05 vide

their Ref. 012/S.TAX-RKL/2006-07 dated

19.04.2006. The said M/s GSAGEPL submitted

the copy o-f (1) Registration Certificate in ST-2,

(2) Intimation for granting centralised

registration and (3) Balance Sheet for 2005-06

vide letter under Ref. No. 039/5. Tax/2006-07

 102

dated 24,05.06. They submitted some copies of

work orders issued by TISCO, Orissa. On

30.06.2006 they submitted particulars of job

month/fortnight wise and service wise in respect

of different job under taken for the period

01.04.2002 to 31.03.2006 along with work

orders/agreement. In response to summons dated

21.07.2006 Shri D. N. Gupta, CEO of the said

M/s GSACEPL tendered a statement under

Section 14 of Central Excise Act, 1944 made

applicable to Service Tax vide Section 83 of the

Finance Act, 1994.

Shri D. N Gupta stated that the place of

operation for TISCO Contracts was in Sukinda

in Orissa for chromites mining and for ICML

the operation was near Sarshatali, Asansol in

West Bengal for coal mining. The activity for

TISCO includes drilling, excavation, haulage

and crushing of some of the end product. There
 103
also doing the same job for ICML. In the case

of ICML the running contract has been operative

since 2001 and in the case of TISCO, the main

contract has been operative since 1984. He is

stated that M/s GSACEPL raise fortnightly bills

for both TISCO and ICML. For TISCO spot

contracts, the billing is monthly. He has also

stated that spot work order fox transportation of

coal /ore/minerals from mines to different

locations have been given to their company on

different dates. These contracts given by TISCO

are not related to the main mining contracts.

These contracts are for transporting the ore to

TISCO plants out side the lease area.

A statement was recorded from Shri R. N.

Ghatak, Executive Director no 19.09.06 and

enclosed to the notice as Annexure-5. Another

statement was recorded from Shri D. N. Gupta,

CEO on 24.01.07 and enclosed with a notice as

Annexure-7. The said M/s GSACEPL submitted

detailed particulars of jobs done during .the

 104
period from 16.08.2002 to 3 1.10.2006. This has

been relied upon as Annexure-8. They have

submitted financial year wise figure for the

period 2002-03 to 2005-06 on 02.01.2007 and

relied upon in the case as Annexure-9.

"Business Auxiliary Services" came into the

purview of Service Tax on and from 01.07.2003

in terms of Section 65(19) of the Finance Act,

1994. The definition of Business Auxiliary

Service has been changed with effect from

1 0.09.2004. "Cargo Handling Services" has been

given under Section 65(23) of the Finance Act,

1994 and became taxable with effect from

1 6.08.2002, "Site Formation and Clearance,

Excavation and Earth Moving and demolition

services" has been defined under Section

65(97a) of the Finance Act, 1994 and became

taxable with effect from 16.06.2005.

 105
Form the investigation conducted against the

said noticee vis-a-vis the statutory provisions,

the following salient points emerged.

One of the important activities involved in open

cast mining is removal of stratum (layer of mud,

boulders etc. that forms horizontal/vertical

layer over the deposits of coal/ore and other

minerals). The material so removed to expose

the layer of coal/ore and other mineral or is

called as 'overburden'. The overburden has to be

necessarily removed and transported to some

other part of the mines. Thereafter, coul/ore and

other mineral or is extracted and brought at the

pit-head. Later, these are shifted within or

outside the mine. The said M/s GSACEPL has

undertook the following the activities as per the

agreement with M/s GSACEPL and M/s ICML.

(a) Removal of the overburdens.

(b) Removal of top soil and stack it at a

i

designated place for future use;

 106
(c) Coal/ore/minerals is taken out by

drilling, blasting, excavation

(d) Loading of coal/ore/minerals and

lifting them upto pithead. Conversion of

ore/coal/minerals into lump size;

(e) Transportation of coal ore/minerals

from pit head to to specified location

within the mine/factory or for

transportation outside the mine/factory (to

railway sidings etc.)

(f) Coal/or e/minerals cutting/extraction

activities of coal/ore/ininerals mining;

M/s ICMI have awarded mining contract to M/s

GSACEPL for mining activity at Sarshatali, WB.

M/s GSACEPL deploys workers and machinery

for removal of overburden, excavation,

extraction/breaking of coal, conversion of coal

layers/starter into lump size, loading/unloading

and transportation, etc.

 107
Similar activities are also done in case of ore

mining as has been admitted by Sliri R. N.

Ghatak, Executive Director of M/s GSACEPL. It

is also seen that the following activities have to

be undertaken in case of both ore as well as

coal mining.

(a) Removal of the overburdens.

(b) Removal of top soil and stack it as a

designated place for future use;

(c) Coal/ore and other minerals are taken

out by drilling, blasting, excavation;

(d) Loading of coal/ore and other minerals

and lifting them upto pithead. Conversion

of ore/coal, etc. into lump size.

(e) Transportation of coal/ore and other

minerals from pit head to a specified

location within the mine/factory- or for

transportation outside the mine/ factory (to

railway sidings etc.)

(f) Cutting/extraction activities of

coal/ore and other minerals for mining.

 108
In order to determine the appropriate

classification of the service rendered by the

said M/s GSACEPL to M/s TISCO, M/s ICMI.

and others at different mine premises the

running accounts bills submitted by M/s

GSACEPL have been scrutinized at random. The

activities done by M/s GSACKPL were in

relation to the basic business of respective

companies Le. M/s TISCO or M/s Ambuja
Cement now DLF Cement), Bewar mines and M/s

ICML who got the jobs done by way of

outsourcing the service of M/s GSACEPL in

respect of their basic business like production

or processing of coal/ore and other minerals for

use or for further manufacture of goods or for

sale. Hence the activities of M/s GSACEPL

appeared to be classifiable as production or

processing of goods for, or on behalf of, the
clients and is chargeable to Service Tax under

Business Auxiliary Service in terms of

definition contained in Section 65(105) (zzb) of

 109

the Finance Act, 1994 as amended with effect

from 10.09.2004 read with Notification No.

14/2004 dated 10.09.2004 and Notification No.

19/2005 dated 07.06.2005, In the instant case

M/s GSACEPL, being a private limited

company, is not eligible for exemption granted

under Notification No. 14/2004 dated

10.09.2004.

Site formation and clearance, excavation, earth

moving and demolition services came into effect

form 16.06.2005 by virtue of Nolfn. No.

15/2005 dt. 7.6.2005 which means any service

provided or to be provided to any person, by

any other in relation to site formation and

clearance, excavation and earth moving and

demolition and such other similar activities-sec.

65 (105) (zzza).

Sec. 65 (97a) specifies definition of the

said service
 110

The definition of site formation and

clearance, excavation, earth moving and

demolition has been given under clause

(97a) of section 65. That is site formation

and clearance, excavation and earth moving

and demolition" includes,-

(i) drilling, boring and core extraction

Services for construction, geophysical,

geological or similar purposes; or

(ii) soil stabilization; or

(iii) horizontal drilling for the passage of

cables or drain pipes; or

(iv) land reclamation work; or

(v) contaminated top soil stripping work; or

(vi) demolition and wrecking of building,

structure or road.

But does not include such services provided in

relation to agriculture, irrigation, watershed

development and drilling, digging, repairing.

 Ill
I

renovating or restoring of water sources or

water bodies.

Therefore, it appears that the said definition is

an inclusive definition and the activities

mentioned therein at SI. No.(i) to (vi) are only

illustrative and not exhaustive. The very word
"Similar activities" as in Sec. 65 (105) (zzza) is
of utmost importance which indicates that all
the activities similar in nature are also included
in this service.

M/s. GSACHPL undertakes the following

activities in Sukinda Chrome ore mines,
Sarishatali Coal Mines/joda Manganese & Iron
ore mines / Bewar & Jaisalmer Lime Stone

mines as per agreement with M/s.

TISCO/M/S.ICML/M/S Ambuja Cement;

1. Removal of overburden by mechanized

operation.

2. Removal of Top Soil & over burden at

Sarishatoli Coal Mines,

 112
3. Hole making in the leveled Stacks of

Sil icious Lumpy ore/ pyroxenite.

4. Drilling pre-split hole in new Magazine
area.

5. Laying of Home Pipe (Blow Down area)

6. Deployment of HEMM for development of
Pyroxenite.

7. Excavation/

8. Hiring of Payloader at stack yard

9. processing (crushing) of Pyroxenite
boulders at SCM

10. Mechanized screening and crushing of

friable chrome ore

11. Ore breaking and transporting, shifting

of finished lumpy/pyroxenite .ore;
12. Hiring of water tanker at stack yard at
SCM

13. Hole making in the leveled stacks of

silicious lumpy ore/pyroxenite;
14. De-silting of the blow down area
 113
15. Hiring of rock breaker for breaking of

oversize pyroxenite;

16. Deployment of D155A dozer,

17. Crushing of hard lumpy ore botilders

at SCM;

18. Soil, over burden, coal, crushing,

mining sardar, pond cutting, excavation

settling pond, widening haul road, coal

excavated.

The scope of this service has been explained in

circular No. BI/6/2005-TRU dated 27.07.2005

(para 6.2). This taxable service covers certain

activities like site formation and clearance,

excavation and earth moving and demolition.

While site formation and clearance may be a

preparatory activity, excavation and earth

moving activities need not be a preparatory

activity.

Therefore the activities appear to be rightly

classifiable under "site formation and clearance,

 I 114

excavation, earth moving and demolition

services" as per the definition under the Section

65 (97a) and become chargeable to Service Tax

under Section 66 of the Finance Act, 1944 as

amended.

The service "site formation and clearance,

excavation, earth moving and demolition

services" came into effect from 16.06.2005. Ail

the above noted services are amply covered

under "Business Auxiliary Services" from

10.09.2004 to 15.06.2005 being incidental and

auxiliary in nature for completion of the basic

activity of the principal of offers/contract viz.

TISCO, ICML, etc. in the instant, case.

The said M/s GSACEPL have been awarded

contract for loading of coal in tippers at pit

head and unloading at the railway sidings.

Similar contracts are also executed by them for

loading and unloading overburdens within the

 115
I

mines area. The job basically involves

deployment of labour and pay loaders.

Similarly, loading and unloading of cargo falls

under Cargo Handling Services, so far as there-

is a contractual agreement and a consideration

is paid for it. Secondly, dictionary meaning of

cargo is 'a load, a burden or a charge'.

Therefore, the term Cargo includes a load,

whether or not it has a market value.. Therefore,

all such contracts for loading and unloading

falls under the Cargo Handling Services.

Nature of different job undertaken by M/s

GSACEPL at, various sites and copy of the

agreement dated 11.06.01 for carrying out

transportation work of lime stone within the

crusher area between M/s CSACEPL and M/s

Ambuja Cement [subsequently taken over by

DLF Cement] has been taken into account. The

said agreement specified THAT M/s GSACEPL

would be responsible for all aspects of

 116
O: collectio3i of materials, transportation and
delivery of the same to the Crusher Hopper.
Since the subject material is lime stone, all
aspects involved in such transportation includes
inter-alia. loading/unloading of the material
with is Incidental to transportation & delivery,
(vide clause l.I of the agreement). The said
activity appears to be classifiable under Cargo
Handling Services, as defined in the Finance
Act, 1994 and is liable for such tax at the
appropriate rate.

As regards the transportation of coal done by

M/s GSACEPL. in the Sarashtali Coal Mines
[ICML]. M/s ICML vide their letter dated
02.02.07 informed that the Service Tax Involved
in the GTA services is being discharged by
them. They also submitted billwise details and
quantum of Service Tax paid from 01.01.05 to
31.12.06. M/s TISCO informed vide their letter
 117

Ref. No. FC/FAMD/38 dated 05.02.07 the M/s

GSACEPL had not rendered any goods transport

agency service. Hence payment of Service Tax

does not arise [copies of the letters enclosed

and collectively marked as Annexure-11]

From the foregoing discussions it appears that

the services provided by M/s GSACEPL to M/s

TISCO located at Sukinda, Joda, Jaisalmer; to

M/s Ambuja Cement for Bewar mines and to M/s

ICML for Sarsatoli mines is classifiable under

(A) Business Auxiliary Service (B) Cargo

Handling and (C) Site Formation and Clearance,

Excavation, Earth Moving and demolition

Service as envisaged in clause (19), (23) and

(97A) respectively of Section 65 of the Finance

Act, 1994. They got themselves registered with

Service Tax authority vide registration No.

AABCG0816EST001 dated 05.05.2006 under

Site Formation and Clearance Services only. But

 118
n V they have not discharged their Service Tax
liability.

It appears that the said M/s GSACEPL by way of

theii act of omission and failure, suppression of
material fact with an intent to evade payment of
Service Tax, did not get themselves registered
with the jurisdictional Service Tax authority in
time and did not disclosed substantial amount
collected and failed to discharged their Service
Tax liability including Education Cess
amounting to Rs. 33,10,00,270/- during the
period from 16.08.2002 to 31.10.2006. The said
amount is recoverable from the said M/s

GSACHPL under the first proviso to Sub-

Section (1) of Section 73 of the finance Act,
1994 and under Section 91 and 95 of the
Finance (No.2) Act, 2004.

Total head wise Service charges collected by

M/s GSACEPL Intimated to DGCBI, Kolkata
 119

vide their office letter dated 11.12.06 and has

been relied in. On the basis of the above

statement, category wise Service Tax liability

has been determined as in the table below:

DEETAIL GROSS AMOUN EDUCATI TOTAL

S OF VALUE T OF ON CESS SERVIC
SERVICE OF SERVIC E TAX
S SERVICE E TAX
S
23235919 2015059 248234 2039875
1 1 3

Cargo 17781258 1796526 3593054 1832457

Handling 84 90 44
Service
(16.08.02)
Site 12177355 1248586 2497172 1273557
preparatio 58 01 73
n

(16.06.20
05)
TOTAL 32282206 3246618 6338460 3310002
33 82 70

The total tax liability in respect of M/s

GSACEPL stands at Rs.32,46,61,8 1 0/- plus

education cess Rs.63,3 8,460/- totaling

Rs.33,10,00,270/- for the period from

16.08.2002 to 31.10.2006. Calculation sheet of

evasion of service tax by M/s GSACEPL under

 120
r• the instant investigation is enclosed with the

notice as Annexure-C.

DEFENCE SUBMISSION OF THE NQTICRF.

The said M/s GSACEPL have submitted their

reply vide their ref. no.550/SCN- S.Tax/2007-08

dated 05.09.07. The case was heard personally

on 27.12.07 when" Shri B.N.Chattopadhyay,
consultant, Shri S.M.Agarwal, FCA and Shri

N.R.Ramchandran appeared before the

Commissioner on behalf of the said M/s

GSACEPL and re-iterated the points of
arguments appearing in the written submission

dated 05.09.07. They submitted another written

note on the date of hearing which has been

taken on record.

In the show cause notice dated 14.03.07, the

services rendered by them were grouped in three
major categories, viz. (i) Business Auxiliary
Service, (ii) Cargo handling Services and (iii)
 121

Site preparation. It was mentioned in the letter

dated 24.04.07 that the show cause notice did

not identify which of the above mentioned

categories applied to the respective contracts of

jobs. It had not clarified exactly what activity

was actually applicable to respective contracts.

The business of the Company comprises of

raining operations which are confined to the

mines areas of their clients. They have defined

the "Mines" as per Mines Act, 1952. "Mining

Operation" has been defined to be any operation

undertaken for the purpose of winning any

mineral. The definitions of "mining operations"

and "mines" are very wide and encompasses any

or every operation in which minerals are

extracted or obtained from the earth irrespective

of whether such activities are carried on above

the surface or inside the earth. It is not a

requirement of the "mining operation" that the

activity of winning the minerals must

necessarily an underground activity.

 122

Segregation of the superfluous material called

hard ultra-basic rock quartzite overburden,

interburden, waste mines spoils rejects etc. is

an integral part of the mining operation and

under no circumstances the same can be treated

as a separate function or as preparatory work

for the subsequent mining operation. Removal

of the waste material and the mineral is an

integral operation inseparable from each other

under mine plans drawn up and submitted under

statute to the Director General of Mines Safety

for mining the mineral by "open cast mining"

method.

The said M/s CSACHPL have undertaken

activities in different inines on the basis of

contracts entered into with different owners of

mines which are composite and inseparable. AM

the mining contracts specify composite rates for

the mining process comprising excavation and

haulage of excavated materials, dumping of the

hauled materials of specified locations. These

 123
all inclusive rates cannot be split up to identify

costs for any specific activity along the mineral

extraction chain. The noticee is a minins

contractor and Is engaged in mining operations

as defined in Mines & Minerals (Development &

Regulation) Act, 1957 (Supra) for extraction of

minerals within the mining area.

In view of the composite nature of work, they

have submitted that in as much as the noticee

was engaged in mining activities, no service tax

was payable prior to 01.06.07 when service was

first introduced in Mining Services under

Notification No. 23/2007- ST dated 22.05.07

(effective from 01.06.07). The noticee has been

paying service tax since 01.06.07 on the

composite service provided by them to their

clients. Before 01.06.07, no Service Tax was

payable by the noticee on their activities within

the mining area.

 124

The said M/s GSACEPL have argued that

vivisection of a composite contract is forbidden

in terms of sub-section (2) of Section-65A of

the Finance Act, 1994 and it has been stipulated

that a composite contract shall be classified

under any one category on the basis of its

essential character. There can be no dispute that

the essential character of the composite services

provided in the present case is

mini ng/prodaction of minerals. According to

them the service is clearly "mining services"

which came into effect from 01.06.07. Prior to

that no Service Tax was payable by the noticee.

The work undertaken by the noticee in the mines

and the mining area in the form of hiring and

deployment of HEMM for excavation. Dumper

Pay Loader at Stock yard, and

loading/transportation of ROM from Mines to

the crushing plants and hole making in the

 .125
leveled stacks and lumpy ores/pyroxenite,
removal of top soils, deployment of mining
sardars, excavation of settling pond etc. are all

mining operations and they cannot be vivisected

arbitrarily by the Department to place them

under the category of Business Auxiliary

Service, The Show Cause Notice relied on

clause (v) of Section 65(19) of the Finance Act,

1994 calling the service as "Any service in

relation to production and processing of goods

for or on behalf of the clients'*. They have
submitted than the production and processing of
the minerals are integral part of mining. It is
covered by mining services. With winning of the

mines, no mineral will be found. Hence, the

alleged business auxiliary service cannot come

within the mining services.

Loading and unloading of minerals including

coal and waste materials within the mining area
1

cannot be categorized under Cargo Haridling

Service. They have relied upon decision of

 126
n- Hon'ble Tribunal in the case of CCE,

Bhubaneswar-II-vs.-B.K. Thakar (Order No. A-

1877/Kol/07 dated 24.10.07) wherein it has been

held that such loading and unloading within the

mines area will not fall under the category of

"Cargo Handling Services" and such items of

materials/minerals cannot be treated as "Cargo".

They have also cited three other decisions of

the Hon'ble Tribunal in this respect.

Site formation and clearance, excavation and

earth moving and demolition as covered by

Section 65(97a) including (i) drilling, boring
and core extraction services for construction

Geophysical, geological or similar purposes; or

li) Soil stabilization; or

iii) Horizontal drilling for the passage of

cables or drain pipes; or
 127
iv) Contaminated top soil stripping work;

v) demolition and wrecking of building

structure or road.

Barring (i) above, the other items do not come

under the purview related to the work in mines.

But since (i) is relatable to raining service, the

same cannot be made applicable to prior to

01.06.07. In the mining services any service

provided or to be provided to' any person by any

other person in relation to mining of mineral or

oil or gas, there is no exclusion of any service

not to speak of site formation and clearance,

excavation and earth moving and demolition

have not been excluded to mean that they were

earlier liable to service tax.

The said M/s GSACEPL have submitted that the

Service Tax on "Mining Services" came" into

 128

operation only from 01.06.07 wherefrom they

have been paying the service tax. Since there

was serious doubt and the noticee has disputed

seriously about the leviability of service tax

prior to 01.06.07, the extended period of

limitation cannot be invoked. There cannot be

any intent on the part of the noticee to evade

service tax in any manner. They entered into

contracts with different reputed concerns like

M/s TISCO Ltd., ICML etc. and in the contracts

there was no provision for service tax as there

was no service tax on mining services during

the material period. Everything was reflected in

their Books of Accounts and also in their

Balance Sheet, when all the facts and figures

are reflected, it cannot be said that there was

any suppression of fact. They have relied upon

several decisions in this respect.

 129
They have argued that in the present case, there
is no question of imposition of penalty since the
law was not cleared and the noticee still holds
that no service tax was payable prior to
01.06.07. They have also referred to CBEC
circular bearing. No." 232/2/2006- Cx.4 dated
12.11.07 and stated that instructions contained
in the said Circular do not appear to be correct
in view of the decisions of the Hon'ble
Tribunal.

DISCUSSIONS AND FINDTNC?^

I have carefully examined the case record,s and

both oral and written submission of the said M/s
GSACEPL. In this case the said noticee has
always maintained that their services provided
under contracts to several clients fall under the
category of 'Mining Services* which became

taxable w.e.f. 01.06.07 and that prior to

01.06.07 their services were not taxable. But
 130

the show cause notice proposes classification of

their service under three categories viz. (i)

Business Auxiliary Service effective from

10.09.04, (ii) Cargo Handling Services effective

from 16.08.02 and (iii) Site Formation &

Clearance, Excavation and moving and

demolition services effective from 16.06.05.

The said M/s GSACHPL has not discharged any

service tax liability prior to 01.06.07 and has

not intimated the department about their

activities. The officers of DGCEI, Zonal unit,

IColkata have investigated their case and show

cause dated 14.03.07 has been issued demanding

Service Tax amounting to Rs. 32,4 6,61,810/-

and Education Cess of Rs. 63,38,460/ under

proviso to Section 73(1) of the Finance Act,

1994 for the period 16.08.02 to 31.10.06.

Now, the question to be settled in this case is

whether service tax is payable for the services

 131
rendered by the noticee prior to 01.06.07 and

under which category the services would fall.

It is a fact that "Mining Services" has been

brought under the ambit of Service Tax w.e.f

01.06.07. But "Mining Services" are a

combination of several services. Such services

are identified ones and can be classified in

terms of Section-65A(l) of the Finance Act 94.

CBEC vide Circular F.No. 232/2/2006-Cx.4

dated 12.11,07 has dealt with applicability of

Service Tax on activities undertaken at mines

prior to 01.06.07, According to the Circular the

following types of services are generally carried

out at Mines,

(i) Excavation / drilling and removal of the

overburdens (ie. stratum, layer of mud,

boulders, etc, that needs to be removed

during or prior to extraction of

coal/minerals).
 132

(ii) Coal cutting or mineral extraction and

lifting them up to the pithead.

(iii) Handling and transportation of coal

mineral from pithead to a specified

location within the mine/factory or for

transportation outside the mines.

Para-3 of the said Circular is re-produced

Excavation/drilling and removal of the

overburdens: These activities are

essentially in the nature of site formation,

clearance, excivation and earth-moving. As

clarified earlier vide Circular Bl/6/2005-

TRU,, dated 27.07.05 (paTa6.2) (2007 (1)

S.T.R. C-48), the definition of site

formation and clearance, excavation and

earth-moving and demolition service is an

inclusive definition and activities

specifically mentioned are indicative and

 133

not exhaustive. Prior to construction of

buildings, factory or any civil structure,

activity of mining and clearance,

excavation and earth moving or leveling are

normally undertaken for a consideration to

make the land suitable for such activities.

Such services include blasting and rock

removal work, clearance of underground,

drilling and boring, overburden removal

and other development and preparation

services of mineral properties and site, and

other similar excavating and earth moving

services. Hence, these activities are taxable

under the category of site formation and

clearance, excavation and earth moving and

demolition service w.e.f. 16.06.05.

The said M/s GSACEPL have obtained

centralised registration with Service Tax

Commissionerate, Kolkata bearing no.

 134

nl AABCG0816B51001 dated 04.05.06 under the

category "Site Formation and Clearance,

Excavation and Earth Moving and demolition

Services". This shows that the said M/s

GSACEPL, knowing fully well that there service

would fall under the category "Site Formation

and Clearance, Excavation and Earth Moving

and demolition Services" with effect from

16.06.05 have obtained registration on 04.05.06.

But for reasons best known to them have not

paid Service Tax on the services with effect

form 16.06.05. From the statements submitted

by the notices (Annexure-8 & 9), it has been

ascertained that the said M/s GSACHPL have

realised an amount of Rs. 1 21,77,3 5,558/-

during 16.06.05 to 31.10.06 from their clients

which is value of taxable service, "Site

Formation and Clearance, Excavation and Earth

Moving and demolition Services" on which

Service Tax amounting to Rs. 12,48,58,601/-and

Education Cess amounting to Rs. 24,97,172/-was

 135
payable in terms of proviso to Section 73(1) of
the Finance Act, 1994, The details of

calculation has been given in Annexure-C (5

pages) of the notice.

On examination of the Running A/C Bills vis-a

vis the Work Order/contracts submitted by them

in this regard, it is seen that:-

M/s GSACEFL undertakes the following jobs at

the Sukinda Chrome ore mines/ICML, Sarsotoli

Coal Mines, Manganese Mines, Khanbad and

Joda, Lime Stone mines, Bewar, Jaisalmer.

1. Hiring & deployment of Pay Loader at

Stock Yard.

2. Hiring 8l Deployment of HEMM for

excavation, dumper and other allied

machinery for the excavation and

 136
r. ti ansportation/diimping of aROM from mine

face to crushing plant.

3. Removal of Overburden by mechanized

operation.

4. Deployment of HEMM for development of

Pyroxenite.

5. Hole making in the leveled slacks for

Silicious Lumpy/Pyroxenite,

6. Drilling Pre-slit hole in new Magazine

area.

7. Laying of Hume Pipe.

8. Removal of Top Soil.

9. Processing/Crushing of ore.

10. Mechanized Screening & Crushing.

11. Ore breaking, transporting. Shifting of
finished lump ore / Pyroxenite.
12. Hiring of water tank at stack Yard.

13. D-sIitting of the Blow down area.

14. Hiring & deployment of rock-breaker

for breaking of over sized pyroxenite.

15. Crushing of hard lump ore/boulders.
 137

Deployment of mining Sirdar.

Pond Cutting.

Excavation settling pond.

Widening haul road.

coal/ore and other minerals excavated

21. Collection of different grade of

Manganese ore and iron ore.

22. Deployment of dumper for transfer of

metal, slag & mixture to dumping yard and

other works incidental and auxiliary to the

above works as mentioned serial no. (1) to

(22) above.

All the above mentioned activities done by M/s

GSACEPL were in relation to the basic business

of the respective companies ie. M/s TISCO or

M/s Ambufa Cement and M/s ICML who got the

jobs done by way of outsourcing the service of

M/s GSACEPLin respect of their basic business

like production or processing of coal/ore and

I

other minerals for use or for further

manufacture of goods or for .«;a)e. Hence the

 138

above activities are classifiable as production

or processing of goods for, or on behalf of, the

client and according to clause-V of Sub-Section

(19) of Section 65 of the Finance Act, 1 994, the

service falls under the category, "Business

Auxiliary Service". From the statements

submitted by the noticee (Annexure-8 & 9), it

has been ascertain that the said M/s GSACEPL

have realized the amount of Rs. 23,23,59,191/-

during 10.09.2004 to 31.10.2006 from their

clients which is value of taxable service,

"Business Auxiliary Service" on which Service

Tax amounting to Rs. 2,01,50,519/- and

Education Cess of Rs.2,48,234/- was payable in

terms of proviso to Section 73(1) of the Finance

Act, 1994. The details of calculation has been

given in Annexure-C (5 pages) of the notice."

 139
Para-5 of the Circular bearing F. NO.
232/2/2006-Cx.4 dated 12.1 1.2007 is reproduced
below:

05. Handling and transportation of coal/mineral

form pithead to a specified location within

the mine/factory or for transportation

outside the mine:

These activities are post-mining activities

and are chargeable to service tax under the

relevant taxable services, i.e. "Cargo

Handling service" and "Goods Transport by
Road". However, in case, such

transportation is undertaken by mechanical

systems, such as conveyor belt system,

ropeway system, merry-go-round systems

etc., and the same is not transported by

road, no service tax would be chargeable.

Service tax is, however, chargeable under

 140

cargo handling service, even if the loading,

unloading and similar activities are done

using mechanical systems.

The said M/s GSACEPL have been awarded

contract for loading for coal in tippers at pit

head and unloading at the railway sidings.

Similar contracts are also executed by them for

loading and unloading overburdens within the

mines area. The job basically involves

deployment of labour and pay loaders.

Similarly, loading and unloading of cargo falls

under Cargo Handling Services, so far as there

is a contractual agreement and a consideration

is paid for it. Secondly, dictionary meaning of

cargo is 'a load, a burden or a charge*.

Therefore, the term Cargo includes a load,

whether or not it has market value. Therefore,

 141
all such contracts for loading and unloading
falls under the Cargo Handling Services.

Nature of different job undertaken by M/s

GSACEPL at, various sites and copy of the

agreement dated 11.06.01 for carrying out

transportation work of limestone within the

crusher area between M/s GSACEPL and M/s

Ambuja Cement [subsequently taken over by

DLF] has been taken into account. The said

agreement specified that M/s GSACEPL would

be responsible for all aspects of collection of

materials, transportation and delivery of the

same to the Crusher Hopper. Since the subject

material is lime stone, all aspects involved in

such transportation includes inter-alia,

loading/unloading of the material which is

Incidental to transportation and delivery. The

said activity is classifiable under "Cargo

1

Handling Services" defined under Sub-Section

 142

(23) of Section 65 of the Finance Act, 1994.

From the statements submitted by the noticee

(Annexure-8 «& 9), it has been ascertained that

the said M/s GSACEPL have realised an amount

of Rs.177,81,25,884/- during 16.08.2002 to

31.10.2006 from their clients which is value of

taxable service, "Cargo Handling Service" on

which Service Tax amounting to Rs.

17,96,52,690/-and Education Cess amounting to

Rs. 35,93,054/- was payable in terms of proviso

to Section 73(1) of the Finance Act, 1994. The

details of calculation has been given in

Annexure-C (5 pages) of the notice.

Thus the total Service Tax liability in respect of

the said M/s GSACEPL stands af - Rs.

32,46,61,810/- pltis Education Cess Rs.

63,38,460/- totaling to Rs. 33,10,00,270/- for

the period from 16.08.2002 to 31.10.2006.

 143
So far as the question of invoking the
longer period of limitation as provided in the
proviso to Section 73(1) of the Finance Act,
1994 is concerned I find that the said noticee
did not apply for registration and did not submit
returns and did not disclose the fact of their
providing taxable services to the Central Excise
Authorities during the relevant period of time. I
also find and as has been observed herein before
that the statutory provisions obtaining during
the period of dispute were not amenable to more
than one interpretation. Therefore, the said
noticee cannot take shelter under the plea of
entertaining a bona fide belief about the non-
taxability of the services provided by them.
Willful suppression of material facts and
contravention of statutory provisions can be
safely inferred from the materials on records. I
have, therefore, no hesitation in holding that
the longer period of limitation is invokable for
recovery of service tax and education cess.!
 144

The said M/s GSACEPL have contravened

the provision of Section 68, 69 & 70 of the

Finance Act, 1994 read with Rule 4, 6 & 7 of

Service Tax Rules 1994 as amended. The said

M/s GSACEPL obtained Service Tax registration

on 04.05.06. This fact simply shows that the

noticee had the knowledge that their services

have already come under the Service Tax net.

But they did not take any step towards payment

of Service Tax. This fact solely can be the

reason for invoking extended period in terms of

proviso to Section 73(1) of the Finance Act,

1994. As has been discussed herein before that

their act of omission and failure, suppression of

material facts with an intent to evade payment

of Service Tax and non-di sc loser of substantial

amount collected and non-payment of Service

Tax liability including Education Cess have

rendered them liable for penalty under Section

76, 77 & 78 of the Finance Act, 1994. The said

 145
M/s GSACEPL are also liable for payment of
interest in terms of Section 75 of the Finance
Act, 1994.

ORDER

On the basis of discussions and findings

elaborated in the foregoing paras, the following

(i) Demand of Service Tax amounting to Rs

32,46,61,810/- (Rupees thirty two Crore
forty six Lakhs sixty one Thousand eight
Hundred and ten only.) and Education
Cess amounting to Rs. 63,38,460/-
(Rupees sixty three Lakhs thirty eight
thousand four Hundred and sixty only)
totaling an amount of Rs. 33,1 0,00,2J0/-
(Rupees thirty three Crore ten Lakhs two
Hundred and Seventy only) is hereby
confirmed against M/s G. S. Atwal & Co.
Engineers (Pvt.) Ltd., 4B, NandalaL Bose
 146

r-.. Sarani, KoIkata-700 071 under Section

73(2) of the Finance Act, 1994.

(ii) M/s G. S. Atwal & Co. Engineers (Pvt.)

Ltd., 4B, Nandalai Bose Sarani, Kolkata-

700 071 are also directed to pay interest

at the appropriate rate on the confirmed

demand in terms of Section 75 of the

Finance Act, 1 994.

(iii) A penalty of two percent of tax per

month starting with the first day after

the due date till the date of actual

payment of the outstanding amount of

Service Tax is imposed on M/s G. S.

Atwal & Co. Engineers (Pvt.) Ltd., 48,

Nandalai Bose Sarani, Kolkata-700 071

in terms of Section 76 of the Finance

Act, 1994.

(iv) A penalty of rupees one thousand is

imposed on M/s G. S. Atwal & Co.

Engineers (Pvt.) Ltd., 4B, Nandalai Bose

 147
Sarani, Kolkata-700 071 in terms of

Section 77 of the Finance Act, 1994.

(v) A penalty of Rs. 33,10,00,270/- (Rupees

thirty three Crore ten Lakhs two Hundred

and Seventy only) is imposed on M/s G.

S. Atwal & Co. Engineers (Pvt.) Ltd., 48,

Nandalal Bose Sarani, Kolkata-700 071

in terms of Section 78 of the Finance

Act, 1994.

Sd/-

19.05.2008

(K. K.N. CHARY)

COMMISSIONER,
SERVICE TAX
COMMISSIONERATE

KOLKATA

F. No. V(5)24/ST-Adjn./Comm./07/
Dated:

M/s G. S. Atwal & Co. Engineers (Pvt.) Ltd.,

 148
4B, Nandalal Bose Sarani,
Kolkata-700 07 1

C.No.-V(5)24/ST-Adjn/Commr./2007/9275

Dated:

Copy forwarded to

1. Assistant Director, DGCEI, Kolkata Zonal

Unit, 4/2, Karaya Road Ko 700 017 for
information with reference to endorsement
no. 206/KZU/KOL/ST/06/1758 dated
14.03.08.

2. Assistant Commissioner, Service Tax

Division III, 9, Old Post Office Street, 4th
Floor, Kolkata-700 001. He is requested to
please hand over a copy to the concerned
Range office.

3. Assistant Commissioner, Service Tax, Tax

Recovery Cell, 9 Old Post Office Street,
4th Floor, Kolkata- 700 001 for initiating
proper action to recover the arrear.

4. Superintendent (Review Cell), Chief

Commissioner's Office, 1.5/1, Strand Road,
 149

Customs House, 3rd floor, Kolkata-700 001

for necessary action.

5, Guard File.

Sd/-
29/C6'2008
(S.N. Sen)
Superintendent
(Adjn)
Service Tax:
Kolkata

//True Copy//
 150

ANNEXURE-P3

IN THE CUSTOMS, EXCISE & SERVICE TAX

APPELLATE TRIBUNAL, KOLKATA

EASTERN ZONAL BENCH: KOLKATA

Service Tax Appeal No. 165 of 2008

Commissioner of Service Tax, Kolkata.

4, K.S Road, Raja Chamber, 3'"'' Floor, Kolkata-

700001. ...Respondent(s)

APPERANCE:

Shri S. P. Majumdar, Advocate for the

Appellant

Shri A. Roy, Authorized Representative for the

Respondent

CORAM:

HON'BLE MR. ASHOK JINDAL MEMBER

(JUDICIAL)
HON'BLE MR. K. ANPAZHAKAN MEMBER
(TECHNICAL)

FINAL ORDER NO

DATE OF HEARING 29.05.2023

DATE OF
PRONOUNCEMENT.
 151
PER K. Anpa/haknn :

The appellant provided "Mining Services'

to the service recipients during the period
1 6.08.2002 to 3 1.1 0.2005. but did not pay
service tax on such activities and also did not

take any service tax registration 1 1 01.06.2007.

2. The appellant received a Show Cause

N.otice vide DGCEI

206/KZU/KOL/ST/06/1757 dated 14.03.2007,

demanding service tax for the period 16.08.2002
to 3 1.10.2006. The demand of service tax was

made under the following heads:-

Sl. Items of Commence Amount of

No. Services ment of ST* Edu

levy

Cess (Rs.)

I. Cargo Handing 16.08.2002 18,32,45,744/-

Service

[Section 65

(23)]
 152

Business Auxiliary 01.07.2003 2,09,98,752/-

Service [Section

65(19)(v)]

Site Formation and 16.06.2005 12,73,55,773/-

Clearance,

excavation

Earth Moving and

Demolition services

[Section 65(97a)]

Total demand of 33,10,00,270/-

Services

including Ed. Cess.

3 The Notice was adjudicated vide Order-ln-

Originai No.01/Commr./ST/Kol/2008-09 dated

29,05.2008, wherein the demand of service tax

with Education Cess amounting to

Rs.33,10,00,270/- was confirmed under the three

different heads as demanded in the Show Cause

Notice. Aggrieved against the impugned order,

the Appellant is before us.

4. In their submissions, the Appellant stated

that it is a well settled position in law that

when a particular levy was introduced for

certain activities with effect from a particular

date, it evident that such activities were not

taxable to service tax prior to that date. In the

present case 'mining services' were brought

under service tax with effect from 01/06/2017.

Hence, for the period prior to 01/06/2007 the -

said activities cannot be bifurcated under

different heads for the purpose of demanding

service tax. In support of their contention, they

relied on the decision of the Hon'ble Supreme

Court in the following cases:-

Sl. CITATIONS
No. 1 ITITLES

1. 2015 (39) STR 913 (SC) CCE&C. Vs.

Larsen &

Toubro Ltd.,

2. 2011 (21) S.T.R. 3 (S.C.) UOI Vs.

Indian

National

Ship-owners

Assn.

5. The appellant further relied on the

following decisions, wherein it has been held

that mining services cannot be levied under

different heads prior to 01.06.2007:-

SI. : CITATIONS CAUSE TITLES

No. -

1. 2017 (49) (STR) 289 Hazaribagh Mining

(Tri.-Kolkata). & Engineering P.

Ltd., Vs. CCE, C.

& ST, BBSR-I.

 155
2022 (63) GSTL 250 Associated Shop
(Tri.-Ahmd.) Stone Distributing

Co. Pvt. Ltd., Vs.

Commissioner of

Service Tax,

Ahmedabad.

2019 (24) GSTL 602 M. Ramakrishna

(Tri.-Hyd) Reddy Vs.

Commissioner of

CUS, C.E-x. & ST,

T i r u p a t i.

2019 (25) GSTL 43 Tuli Construction

(Tri.-Kolkata) Co. Vs. Commr.

Of C.Ex, Cus, &

ST, BBSR-II

2019 (24) GSTL 565 Ripley & Company

(Tri.-Kolkata) Ltd.,

Commissioner of

CEX & ST,

Jamshedpur. '
6. 2022 (67) GSTL 324 Commissioner of

(Call) Service Tax Vs.

Naresh Kumar &

Company Pvt.

Ltd.,

7. 2019 (31) GSTL 487 Calcutta Industrial

(Tri.-Kolkata). Supply Corpn. Vs.

Commissioner of
1
1

C. Ex., Cus & ST,

BBSR.

8. 2008 (9) GSTL 531 Sainik Mining &

(Tri.-Kolkata) Allied Services

Ltd., Vs.

Commissioner of

Central Excise,

Customs & S. Tax,

BBSR.

2009 (15) STR 393

■ Thri veni

I
■
(Tri.-Chennai) Earthmovers

.Ltd,
Pvt

Vs.
 Commissioner of

C.Ex, Salem.

10. 2009 (15) STR 540 Avian Overseas

(Tri.-Kolkata) Pvt Ltd, Vs.

Commissioner of

C. Ex. Cus & ST,

BBSR-II,

2012 (27) STR 258 Gangadhar Bulk

(Tri.-Mumbai) Movers Pvt. Ltd.,

Vs. Commr. Of- C.

Ex, Nagpur,

12. 2018 (19) GSTL 462 Commr. Of C. Ex,

(Bom.) Nagpur Vs. N. P.

Earth Movers Ltd.,

2008 (9) STR 542 Commissioner of

(Tri.-Kolkata) C.Ex. Cus., & ST,

BBSR-II ,Vs. B.K.

Thakkar.
 158

Commr. Of C. Ex.

Cus &. ST, BBSR-

6, The Appellant contended that the Ld.

Commissioner has erred in not following the
Board CBEC Circular F. No. 232/2/2006-Cx.4
dated 12.1 1.2007 which categorically states that
no service tax on mining activities is leviable

before 01.06.2007. The relevant para 4 of the

Circular is reproduced below:

"4 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 thi.s
 159

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."

7. The Appellant stated that in the present

case the contracts were not restricted to site

formation, Cargo Handling and Business

Auxiliary Service, but also included a host of

other activities associated with mining

activities viz, removal of over burden,

extraction and segregation of coal/ores. Thus,

the contracts, as a whole, has to be considered

and not in parts and in a disjointed manner.

8. Regarding the limitation issue, the

Appellant stated that service tax in respect of

mining activities was levied for the first time

with effect from 01.06.2007. Accordingly, they

did not apply for registration in respect of

mining services before 01.06.2007. They were

 160
under the bonafide belief that registration need

not be taken in respect of 'Mining services' as

the said services were not taxable prior to

01.06.2007. Hence, notice cannot be issued by
invoking extended perjod. In support of their
contention they relied on the following
decisions:-

(i) 2013 (32) S.T.R. 756 (Tri.-Ahmd.),

Atwood Oceanics Pacific Ltd., Vs.

Commissioner of Service Tax, Ahmedabad.

12.4 No doubt, the analysis made

by us can be questioned and we are aware

of limitations since we are not experts in

the field of oil exploration, drilling or
survey etc. but the analysis made above

with the help of Wikipedia, letter's issued

by the Ministry and definitions of service

would show that it is possible to entertain

an opinion that the activity of the M/s.

Atwood cannot be considered as a service

 161

covered by the definition of service

'Exploration of Mineral, Oil and Gas

Service'. It is also settled law that if two

views are possible and If an assessee

entertains a belief that he is not liable to

pay duty or tax. Intention to evade duty,

suppress!on/mis-declaration cannot be

attributed and therefore, extended period of

limitation for demanding duty/tax cannot

be invoked. Therefore, even if our finding

on classification aspect turns out to be

incorrect, extended period of limitation

could not have been invoked. In this case,

the period is prior to 1-6-2007 and the

show cause -notice was issued in April

2009. Therefore, the demand for service tax

treating the services provided as service of

Survey/Exploration of Minerals cannot be

sustained."
 162
r- (ii) 2022 (67) GSTL 324 (Cal)
Commissioner of Service Tax, Vs. Naresh
Kumar & Company Pvt. Ltd,

"14. The second issue was as to

whether the extended period of

limitation could have been invoked. If
the issue is answered in favour of the

writ petitioner, there may not be a

necessity to go into the third issue. As

rightly pointed out by the Learned

Writ Court, the proviso to Section

73(1) of the Act can be invoked only

when there is an allegation of fraud or
collusion or wilful mis-statement or

suppression of facts or contravention

of the provisions of the Act or the

Rules with intent to evade payment of

service tax. Therefore, the show cause

notice should clearly indicate the

• wilful mis-statement or suppression of
facts or fraud or collusion as done by
 163

the assessee with an intention to evade

payment of tax. On a careful reading

of the show cause notice, it is

evidently clear that there is absolutely

no whisper of any allegation of wilful

mis-statement or suppression of facts

or fraud or collusion as committed by

the respondent assessee with an

Intention to evade payment of service

tax. In the absence of such factual

finding, the extended period could not

have been invoked.

"[Emphasized]

(iii) 1 995 (78) E.L.T. 401 (SC), Pushpam

Pharmaceuticals Company Vs. CCE, Bombay.

The Hon'ble Supreme Court in this case at

para 3 has held as under:-

"3. Law about excisability of exempted

goods was settled by this Court in Wallace

Flour Mills Co. Ltd, v. Collector of Central

 164

r\ Excise, Bombay, Division III - 1998 (44)

E.L.T. 598 (SC) = (1998) 4 SCC 592 Till

then conflicting decisions were rendered by

different High Court and Tribunal and it

was not settled whether the turnovers of

assessable and exempted goods were liable

to be clubbed for determining liability.

Therefor, two questions arise whether the

appellant was bound in the state of

uncertainty in law to include the turnover

of the two items and if it failed to do so

then it amounted to suppression of fact and

second whether it was the duty of appellant

to keep the Department informed about the

turnover of the goods which were not liable

to any duty. No rule could be pointed out

requiring a manufacturer to disclose the

turnover of exempted goods. Even assuming

it was, the appellant could not be held

guilty of suppression when the law itself

was not certain.

 165
VI. Having regard to the above, it is clear

that major portion of the demand is patently

time-barred.

9. Regarding penalty impose, the Appellant

contended that the instant issue being a

predominantly legal issue, extended period of

limitation under proviso to Section 73(1) of the

Act and penal provisions under Section 78 ibid

would not get attached. They cited the decision

of the Hon^ble Madhya Pradesh High Court, in

the case of S.N. sunderson (Minerals) Ltd.,Vs.
Suptd. (Preventive), C. Ex., Indore reported in
1995 (75) ELT 273 (M.P.), wherein it has been

held that penalty is not imposable where the act

of omissipn and commission on the assesse's

part were due to Bonafide belief.

10. -The Ld Departmental Representative

reiterated the findings of the adjudicating

authority in the Impugned order.
 166
r" II. Heard both sided and perused the appeal
records. 12. We observe that the Appellant has
got a composite contract for undertaking
'mining activities'. From the work orders, it is
evident that the activities were to be performed
entirely within the mining area, for a lump sum
price. The Department has artificially
bifurcated the services under the categories of
Cargo Handling Services, Site Formation
services and Business Auxiliary Services and
demanded service tax. In fact there is no
separate charges payable to such services as per
the work orders. In the Notice, the taxable value
under each category of service has been arrived
at artificially without any basis.

13. We also observe that CBEC has issued

Circular F. No. 232/2/2006- Cx.4 dated
12.11.2007, which categorically states that no
service tax leviable on mining activities prior to
01.06.2007. However, the adjudicating authority
failed to appreciate the clarification and went
 167

ahead to confirm the demand made in the

Notice. The relevant para 4 of the Circular is

reproduced below:

"4 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."

14. The Appellant cited a plethora of decisions

of the Hon'ble Supreme Court, High courts and

Tribunals, which are listed' in paras 4 and 5

above, in support of their claim that 'mining

services' were not leviable to service tax prior

 .168
to 01/06/2007. We find that the decisions cited

by the Appellant are squarely applicable in this

case. In the case of CCE VS. Larsen & Toubro

Ltd., the Hon'ble Supreme Court has held that

when a particular levy was introduced for

certain activities with effect from a particular

date, it is to be construed that such activities

were not liable to service tax prior to that date.

In the present case 'mining services' were

brought under service tax only with effe.ct from

01/06/2007. Hence, for the period prior to

01/06/2007, there was no liability of service tax

on' mining services'.

15. We also find that Board has issued a

Circular in F. No. 232/2/2006-. Cx.4 dated

12.11.2007 clarifying the issue. The Circular

cited above categorically clarifies that 'mining

services' were not leviable to service tax prior

to 01/06/2007. Accordingly we hold that, the

 169

artificial bifurcation of the services rendered by

the Appellant into Cargo Handling Service, Site

Formation Service and Business Auxiliary

Service and demanding service tax in the

impugned order Is not sustainable and hence it

is liable to be set aside.

16. The Appellant raised the issue of

'limitation'. We observe that there is no

evidence brought on record to establish that the

Appellant has intentionally evaded service tax.

Since 'mining services' were liable for service

tax only with effect from 01/06/201 7, demand of

service tax by Invoking extended period is not

sustainable. Accordingly, the demands

confirmed in the impugned orders are liable to

be set aside on the ground of limitation also.

17. Regarding penalty imposed in the impugned

order, we observe that the demands confirmed in

the impugned are are not sustainable, when the

demand itself is not sustainable on merit as well

 170
as on iiniitatiorij the question of imposing
penalty does not arise.

16. In view of the above findingSj we set aside

the impugned order and allow the appeal filed
by the Appellant.

(Pronounced in the open court on 06.06.2023

Sd/-

CAshok Jindal)

Member (Judicial)

Sd/-

(K. Anpazhakan)

Member (Technical)

//True Copy//
 171

ANNEXURE-P4

CEXA NO. (/ OF 2024

IN THE HIGH COURT AT CALCUTTA

SPECIAL JURISDICTION

ORIGINAL SIDE

In the Matter of:

An appeal under Section 35G

of the Central Excise Act,
1944.

And

In The Matter of;

Commissioner of Service
Tax, Kolkata having office at
4, K. S. Road, Raja Chamber,
3rd Floor, Kolkata-700001
(presently looked after by
Commissioner of CGST &
Cx., Kolkata South
Commissionerate and having
office, at GST Bhawan, 180,
Shantipally, Rajdanga Main
Road, Kolkata-700107).
 172

...Appellant
-VERSUS-
M/s. G. S. Atwal & Co.
Engineering Pvt. Ltd., having
office at 4B, Nandalal Basu
Sarani, Kolkata-700071;

...Respondent
 MEMORANDUM OF APPEAL

Being aggrieved by and dissatisfied with the

Order bearing no. 75533/ 2023 dated 06.06.2023

passed by the Learned Customs, Central Excise

& Service Tax Appellate Tribunal, East Zonal

Bench, Kolkata, in Excise Appeal No. 165 of

2008 which was received on the

appellant above named begs to prefer this

appeal on the following amongst other; -

GROUNDS

For that the Learned Tribunal failed to

appreciate the moot question in this case

whether the services rendered by the

respondents during the period 16.0,8.2002

to 31.10.2006 can be considered as

"Mining Service" as the "mining Service"

has come into effect from 01.06.2007.

II. For that the Learned Tribunal without

appreciating the point of law has passed

 174

Pv the order that the department has

artificially bifurcated the services

rendered by the respondents "Cargo

handling Service, Site formation Service,

and Business Auxiliary Service" and as

such the order-in-original is not

sustainable. •

III. For that the Learned Tribunal has

wrongly set aside the Order-in- original

dated 29.05.2008.

IV. For that the Learned Tribunal at the time

of passing the order has relied upon the

Board's Circular being F. No.

232/2/2006-CX.4 dated 12.1 1.2007

wherein in the said Circular it has

clarified that "Mining Services" were not

leviable to Service Tax prior to

01.06.2006 but failed to appreciate the
 175

contention of the said Circular

wherefrom it will appear that the

activities of coal cutting or mineral

extraction and lifting them up to the

pithead only were not taxable prior to

01.06.2007 but activities relating to site

formation and clearance, excavation and

earth moving and demolition were

taxable w.e.f 1 6.06,2005. Similarly

handling (loading, unloading or similar

services) of coal/minerals from pithead

to a specific location within the mine

whether manually or using mechanical

systems were taxable under "Cargo

Handling Service".

V. For that the respondent got them

registered "with service tax department on.

04.05.2006 under service tax head "Site-

formation and clearance, excavation and

earth moving and demolition services"

 176
being no. AABCG08 1 6EST00 ] which
indicate that they were well aware of
their service tax liability on that score
and they have collected the service

charges from their clients during the said

period but have failed to pay the same.

VI. For that "Business Auxiliary Services"

came into the purview of service tax on

and from 01.07.2003 in terms of Section

65"(19) of the Finance Act, 1994 but the

definition of said service has been
changed w.e.f 10.09.2004 and the "cargo
handling services" has been defined
under Section 65(23) of the Finance Act,
and became taxable w.e.f 16.08.2002 as
well as the "Site formation and
clearance, excavation and earth moving
and demolition services" has been
defined under Section 65(97a) of the
 Ill

Finance Act, 1994 and became taxable

w.e.f 16.06.2005.

VII. For that M/s. ICMI have awarded

contract to the respondent for activity at

Sarshatali,. West Bengal ' and the

respondent deploys workers and

machineries at the said site for removal

over burden. excavation,

extraction/breaking of coal, conversion

of coal layers/starter into lump size,

loading/unloading and transportation and

the similar activities are also done in the

case of ore mining as has been admitted

by Shri R. N. Ghatak, Executive Director

of the respondent company.

VIII. For that in order to determine the

appropriate classification of the service

rendered by the respondent to M/s.
 178
TISCO, M/s. ICML and others are
different mines premises the running
account bills submitted by respondent
have been scrutinized and the activities
done by the respondent in relation to the
basic business of respective companies
I.e., M/s. TISCO, or M/s. Arabuja
Cement. Bewar mines and M/s. ICML
who got the jobs done by way of
outsourcing the services of the
respondent in respect of their basic
business like production or processing of
coal fore and other materials for use or
for further manufacture of goods or for
sale.

IX. For that the activities of the respondent

appeared to be classifiable as production"
or processing of goods for or on behalf
of the clients and is chargeable to
service tax under "Business Auxiliary
Service" read with Notification no.
 179

14/2004 dated 10.09.2004 and

Notification no. 19/2005 dated

07.06.2005. The respondent being a

private limited company is not eligible

for exemption granted under Notification

no. 14/2004 dated 10.09.2004.

For that the "Site formation and

clearance, excavation and earth moving

and demolition services" came into effect

from 16.06.2005 by virtue of

Notification no. 15/2005 dated

07.06.2005 which means any service

provided or to be provided to any person,

by any other in relation to site formation

and clearance, excavation and earth

moving and demolition and such other

similar activities.
 180
XI. For that as the respondent has undertaken

different services /activities the scope of

the said service has been explained in

Circular No.- B1/6/2005-TRU dated

27.07.2005 wherein it has been stated the

taxable service covers certain activities

like "Site formation and clearance,

excavation and earth moving and

demolition services" and while site

formation and clearance may be a

preparatory activity and excavation and

earth moving need not be a preparatory

activities therefore, the activities

appeared to be rightly classifiable under

"Site formation and clearance,

excavation and earth moving and

demolition services" as per the definition

of Section 65(97a) and became

chargeable to service tax under Section

66 of the Finance Act.

 181
XII. For that the respondent have been

awarded contract for loading of coal in

tippers at pit head and unloading at the

railway sidings. Similar contracts were

also executed by them for loading and

unloading overburdens within the mines

area. The job basically involves

deployment of labours and pay loaders.

XIII. For that similarly loading and

unloading of cargo falls under Cargo

Handling Services" so far as there is a

contractual agreement and consideration

is paid for it.

XIV. For that nature of job undertaking b-y

the respondent at various site and copy

of the agreement dated 1 1.06.2001 for

carrying out transportation work of lime

stone within the crusher area between

 182
rv respondent and M/s. Ambuja Cement has
been taken into account but the"
agreement specified that the respondent

would be responsible for all aspects of

collection of materials, transportation
and delivery of the same to the crusher

Hopper but when the subject material is

lime stone, all aspects involved in such

transportation includes inter-alia

loading/unloading of the materials which

is incidental to transportation and
delivery and as such the said activity
appears to be "Cargo Handling Service"
and as such the same is liable for service

XV. For that as regards the transportation of

coal done by the respondent in the
Sarashtali Coal mines the respondent in
- their letter dated 02.02.2007 informed
 183

that the service tax involved in the GTA

service is being discharged by them but

M/s. TISCO informed by a letter dated

05.02.2007 that the respondent had not

rendered any goods transport agency

service therefore, payment of service tax

does not arise.

XVI. For that from the available records and

submissions it appears that the

respondent provided services to M/s.

TISCO located at sukinda, joda,

jaisalmeer and to M/s. Ambnja Cement

for Bewar mines and to M/s. ICML for

Sarastaii mines is classifiable under "(a)

Business Auxiliary Service; (b) "Cargo

Handling Service; (c) "Site formation

and clearance, excavation and earth

moving and demolition services", as

envisaged in clause (.19), (23) and (97a)

 184
respectively of Section 65 of the Finance
Act.

XVII. For that the respondent has always

maintained that their services provided
under contract to several clients fall
under the category of "Mining Services"
which is taxable from 01.06.2007 and
prior to that their services were not
taxable. But the Show Cause Notices
proposes their services under three

categories i.e, "(a) Business Auxiliary

Service from 10.09.2004; (b) "Cargo
Handling Service from 16.08.2002; and
(c) "Site formation and clearance,
excavation and earth moving and
demolition services from 16.05.2006",

XVIII. For that the Learned Tribunal has

tailed to take into consideration the
 185

above fact that the respondent has not

discharged their service tax liability

prior to 01.06.2007 and has not intimated
their activities to the department. The

"Mining Services" is combination of

several services and can be classified in

terms of Section 65A(1) of the Finance

Act vide circular dated 12.1 1.2007 has

dealt with applicability of service tax on

activities at mines prior to 01.06.2007

and according to the said Circulars the

following types of services are generally
carried out at mines.

(i) Excavation / drilling and removal of

the overburdens (i.e. straturn, layer of

mud, boulders, etc, that needs to be

removed during or prior to extraction of
coal / minerals).
 186
(ii) Coal cutting or mineral extraction
and lifting them up to the pithead.

(mi) Handling and transportation of coal

/ mineral from pithead to a specified
location within the mine/factory or for
transportation outside the mines.

XIX. For that the Learned Tribunal at the

time of passing the order has not at all
considered the above said facts and has
wrongly held that the services are
pertains to mineral services and as such
service tax is not leviable thereon
therefore the said observation of the
Learned Tribunal is absolutely contrary
to the facts and as such the order of the
Learned Tribunal is liable to be set
aside.
 187
I

XX. Your petitioner states that the Learned

Tribunal is otherwise perverse, bad in

law and liable to be set aside.

I certify that the above grounds

are good grounds in my opinion.

Advocate

CEXA No- of 2024

In the High Court at Calcutta

Special Jurisdiction

Original Side

In the Matter of:

An appeal under Section 35G of

the Central Excise Act, 1944;

AND
 188
In the Matter of:

Commissioner of CGST & OX,

Kolkata South Commissionerate;

...Appellant

-VERSUS-

M/s. G. S. Atwal & Co.

Engineering Pvt. Ltd.

...Respondent

MEMORANDUM OF APPEAL

K. K. Maiti
Advocate
High Court Calcutta
WB/322/2000
6A, K. S. Roy Road
3rd floor, Room-28
Kolkata-700001.
(M)-7044002118
e-mail:
kkmaitil [email protected].

//True Copy//
 '- s '.

I?1
AwWEXURf-P-S
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
KOLKATA
EASTERN ZONAL BENCH: KOLKATA

Service Tax Appeal No. 165 of 2008

(Arising out of Order-in-Originai No. Ol/Commr/ST/Kol/2008-09 dated

29.05.2008 passed by Commissioner of Service Tax, Kolkata.)

M/s G. S. Atwal & Co. Engineers Pvt. Ltd.,

4B, Nandalal Bose Ssarani, Kolkata-70D071.
....Appellant (s)

VERSUS

Commissioner of Service Tax, Kolkata.

4, K.S Road, Raja Chamber, S'** Floor, Kolkata-700001.
....Respondent(s)

APPERANCE:
Shri S. P. Majumdar, Advocate for the Appellant
Shri A. Roy, Authorized Representative for the Respondent

CORAM:
HON'BLE MR. ASHOK JINDAL MEMBER (JUDICIAL)
HON'BLE MR. K. ANPAZHAKAN MEMBER (TECHNICAL)

FINAL ORDER No...75533/2023

DATE OF HEARING : 29.05^2023

DATE OF PRONOUNCEMENT: 06.06.2023

PER K. Annazhakant

The appellant provided 'Mining Services' to the service recipients

during the period 16.08.2002 to 31.10,2006 , but did not pay service
tax on such activities and also did not take any service tax registration

till 01.D6..2007.

2. The appellant received a Show Cause Notice vide DGCEI F No.

206/KZU/KOI7ST/06/1757 dated 14.03.2007, demanding service tax

for the period 16.08.2002 to 31.10.2006. The demand of service tax

was made under the following heads:-
 Service Ta* Appeal No. 16S of 2008

SI. No Items of Services Commence Amount of ST*

ment of levy Edu

Cess (Rs.)
Cargo Handing Service I 16.08.2002 18,32,45,744/-
[Section 65 (23)]
Business Auxiliary 01.07.2003 2,G3,98,752/-
Service [Section
65(19)(v)]
Site. Formation and 16.06.2005 12,73,55,773/-
Clearance, excavation
and Earth Moving and
Demolition services
[Section 65(97a)]
Total demand of ^ 33,10,00,270/-
Serviced Tax including
Edu. Cess.

3. The Notice . was adjudicated vide Order-in-Original No.

01/Commr./ST/Kol/2008-09 dated 25.09.2008, wherein the demand of
service tax with Education Cess amounting to Rs.33,10,0Q,270A w^as
confirmed under the three different heads as demanded in the Show
Cause Notice. Aggrieved against the "impugned order, the Appellant is
before us.

4. In their submissions, the Appellant stated that it is a well settled

position In law that when a particular levy was Introduced for certain
activities with effect from a particular date, it evident that such
 Service Tax Appeal No. 165 of 2008

IV
activities were not taxable to service tax prior to that date. In the

present case 'mining services' were brought under service tax with

effect from 01/06/2017. Hence, for the period prior to 01/06/2007 the

said activities cannot be bifurcated under different heads for the

purpose of demanding service tax. In support of their contention, they

relied on the decision of the Hon'ble Supreme Court In the follawing

cases:-

CITATIONS CAUSETITLES

2015 (39) STR 913 (-SG) CCE&C. Vs. Larsen &

Toubro Ltd.,
2011 (21) S.T.R. 3 (S.C.) UOI Vs. Indian
National Ship-owners
Assn.

5. The appellant further relied on the following decisions, wherein It

has been held that mining services cannot be levied under different

heads prior to 01.06.2007:-

Sl. No. I CITATIONS 1 CAUSE TITLES ~

1. 2017 (49) (STR) -289 (Tri.- Hazarlbagh Mining &
Kolkata). Engineering P. Ltd., Vs.
• CCE, C. & ST, BBSR-I.
2. 2022(63) GSTL25Q (Tri.-Ahmd.) Associated Shop Stone
Distributing Co. Pvt. Ltd.,
Vs. Commissioner of
Service Tax, Ahmedabad.
3. 2019 (24) GSTL 602 (Tri.-Hyd) M. Ramakrishna Reddy Vs..
Commissioner of CUS,
C.Ex. & ST, Tirupati.
4. 2019 (25) GSTL43 (Tri.-Kolkata) Tull Construction Co. Vs.
Commr. Of C.Ex, Cus, &
• ST, BBSR-II.
5. 2019 (24) GSTL 565 (Tri.-Kolkata) Ripley & Company Ltd., j
Vs. Commissioner of CEXI
& ST, Jamshedpur.
6. 2022(67) GSTL 324 (Call) Commissioner of Service
Tax Vs. Naresh Kumar 8i
Company Pvt. Ltd.,
7. 2019 r31) GSTL 487 (Tri.- Calcutta Industrial Supply
 Service Tax Appeal No. 165 of 2008

Koikata). ~ ^ Corpn. Vs. Commissioner

of C. Ex.. Cus & ST. BBSR.
2008 C9) GSTL 531 (Tri.-Kolkata) Sainik Mining & Allied
Services Ltd., Vs. ,
• Commissioner of Central '
Excise, Customs & S. Tax,
BBSR.
2009 (15)STR 393 (Tri.-Chennai) Thriven! Earthmovers Pvt
.Ltd, Vs. Commissioner of
C.Ex. Salem.
2009 (15)STR 540 (Tn.-Kolkata) •Avian Overseas Pvt Ltd,
Vs. Commissioner of C.
2012(27) STR 258 (Tri.-Mumbai)._ Gangadhar
Ex. C'Js & ST, SBSR-il^
Bulk Movers
Pvt. Ltd., Vs. Commr. Of
C. Ex, Naopur.
2018 (19) GSTL 462(Bom.) Commr. Of C. Ex, Nagpur
Vs. N. P. Earth Movers
Ltd.. •
2008 (9) STR 542 (Tri.-Kolkata) Commissioner of C.Ex.
Cus., & ST, BBSR-II Vs."
O.K. Thakkar.
■2021 .(44) GSTRL 297 (Tri^ Faridabad Curgaon
Kolkat3). Minerals Vs. Commr. Of C.
. Ex. Cus & ST. BBSR-TT.

6. The Appellant contended that the Ld. Commissioner has erred in

not following the Board CBEC Circular F. No. 232/2/2006-CX.4 dated
12.11.2007 which categorically states that no service tax on miring
activities is leviable before' 01.06.2007. The relevant para 4 of the
Circular is reproduced below:

"4 Coa/ cutt/ng 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."
 Service Tax Appeal No. 165 of 2008

7. The Appellant stated diat in the present case the contracts were not

restricted to site formation, Cargo Handling and Business Auxiliary

Service, hut also included a host of other activities associated with

mining ach'vities viz. removal of over burden, extraction and

segregation of coal/ores. Thus, the contracts, as a whole, has to be

considered and not in parts and in a disjointed manner.

8. Regarding the limitation issue, the Appellant stated that service tax

in respect of mining activities was levied for the first time with effect

from 01.06.2007. Accordingly,, they did not apply for registration in

respect of mining services before 01.06.2007. They were under the

bonafide belief that registration need not be taken in respect of "Mining

services' as the said services were not taxable prior to 01.06.2007.

Hence, notice cannot be issued by invoking extended period. In support

of their contention they relied on the following decisions:-

(i) 2013 (32) S.T.R. 756 (Tri.-Ahmd.), Atwood Oceanics Pacific

Ltd., Vs. Commissioner of Service Tax, Ahmedabad.

12.4 No doubt, the analysis made by us can be

questioned and we are aware of limitations since we are not
experts in the field of oil exploration, drilling or survey etc.
but the analysis made above with the help of Wikipedia,
letters issued by the Ministry and definitions of service
. would show that it Is possible to entertain an opinion that
the activity of the M/s. Atwood cannot be considered as a
service covered by the definition of service "Exploration of
Mineral, Oil and Gas Service'. It is also settled law that if
two views are possible and if an assessee entertains a belief
that he is not liable to pay duty or tax, Intention to evade
duty, suppresslon/mis-declaratlon cannot be attributed and
 Service Tax Appeal No. 165 of 2008

therefore, extended period of limitation for demanding

, duty/tax cannot be invoked. Therefore, even if our hnding
on ciassification aspect turns out to be incorrect, extended
period of iimitation could not have been invoked. In this
case, the period is prior to 1-6-2007 and the show cause-
notice was issued in Aprii 2009. Therefore, the demand for
service tax treating the services provided as seivice of
Survey/Exploration of Minerals cannot be sustained."
(ii) 2022 (67) GSTL 324 (Cai) Commissioner of Service Tax, Vs.
Naresh Kumar & Company Pvt. Ltd,

"14. The second issue was as to whether the extended

period of limitation could have been Invoked. If the Issue is
. answered In favour of the writ petitioner, there may not be'
a necessity to go Into the third Issue. As rightly pointed out
by the Learned Writ Court, the proviso to Section 73(1) of
the Act can be invoked only when there is an allegation of
fraud or collusion or wilful mis-statement or suppression of
facts or contravention of the provisions of the Act or the
Rules with Intent to evade payment of sendee tax.
Therefore, the show.cause notice should clearly indicate the
Wilful mis-statement or suppression of facts or fraud or
coliusion as done by the assessed with an intention to evade
payment of tax. On a careful reading of the show cause
notice. It Is evidently clear that there Is absolutely no
. ^whisper of any allegation of wilful mis-statement or ■
suppression of facts or fraud or collusion as committed by
the respondent assessee with an Intention to evade
■ payment of service tax. In the absence of such factual
finding, the extended period could not have been invoked.
"[Emphasized]-

Company\vs.^cL,^Bombay.'^' Pharmaceuticals
 Service Tax Appeal No. 16S of 2008

The Hon'ble Supreme Court in this case at para 3 has held as

under:-

"3. Law about excisabUity of exempted goods was settled

by this Court in Wallace Flour Mills Co. Ltd. v. Collector of
* Central Excise, Bombay, Division III • 1989 (44) E.L.T. 598
(SC) = (1989) 4 see 592. Till then conflicting decisions
were rendered by different High Courts and Tribunal and it
was not settled v/hether the turnovers of assessable and

exempted goods were liable to be clubbed for determining

liability. Therefore, two questions arise whether the
appellant was bound In the state of uncertainty in law to
include the turnover of the two Items and if it failed to do so

then it amounted to suppression of fact and second whether

it was the duty of appellant to keep the Department
informed about the turnover of the goods which were not
liable to any duty. No rule could be pointed out requiring a
■ manufacturer to disclose the turnover of exempted goods.
Even assuming it was, the appellant could not be held guilty
ofsuppression when the law itself was not certain."

VI. Having regard to the above, it is clear that major portion of

the demand is patently time-barred.

9. Regarding penalty imposed, the Appellant contended that the

instant issue being a predominantly legal issue, extended period of

limitation under proviso to Section 73(1) of the Act and penal provisions

under Section 78 ibid would not get.attracted. They cited the decision of

the Hon'ble Madhya Pradesh High Court, in the case of S.N. Sunderson

(Minerals) Ltd., Vs. Suptd. (Preventive), C. Ex., Indore reported in 1995

(75) ELT 273 (M.P.), wherein it has been held that penalty Is .not

imposable where the act of omission and commission on the assesse's

part were due to bonafide belief.

 Service Tax Appeal No. 165 of 2008 •

10. The Ld Departmental Representative reiterated the findings of the

nc
adjudicating authority in the Impugned order,

11. Heard both sided and perused the appeal records.l2. We observe
that the Appellant has got a composite contract For undertaking ^mining
activities'. From the work orders, it is evident that the activities were to
be performed entirely within the mining area, for a lump sum price. The
Department has artificially bifurcated the services under the categories
of Cargo Handling Services, Site Formation services and Business
Auxiliary Services and demanded service tax. In fact there is no
separate charges payable to such services as per the work orders. In
Che Notice, the taxable value under each category of service has been
arrived at artificially without any basis.

13. We also observe that CBEC has issued Circular F. No. 232/2/2005-
Cx.4 dated 12.11.2007, which categorically states that no service tax
leviable on mining activities prior to 01.06.2007. However, the
adjudicating authority failed to appreciate the clarirication and.went
ahead to confirm the demand made In the Notice. The relevant para 4
of the CircuJaris reproduced below:

"4 Coai cutting or mineral extraction and lifting

. them up to the pithead
These activities are essential integral processes and ere 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 Appeal No. 165 of 2008

service tax. Therefore, no service tax is leviable on such

activities prior to the said date."

14. The Appellant cited a plethora of decisions of the Hon'ble Supreme

Court, High courts and Tribunals, which are listed In paras 4 and 5
above, in support of their claim that 'mining services' were not leviable
to service tax prior to 01/06/2007. We find that the decisions cited by
the Appelfant are squarely applicable In this case. In the case of CCE Vs.
Larsen & Toubro Ltd., the Hon'ble Supreme Court has held that when a
particular levy was introduced/pr certain activities with effect from a
particular date, it is to be construed that such activities were not"liable
to service tax prior to that date. In the present case 'mining services'
were brought under service tax only with effed; from 01/05/2017.
Hence, for the period prior to 01/06/2007, there was no liability of
service tax on* mining services'.

15. We also find that Board has issued a Circular In F. No. 232/2/2006-
.Cx.4 dated 12.11.2007 clarifying the issue. The Circuiar cited above
categorically clariries that 'mining services' were not leviable to service
tax prior to 01/06/2007. Accordingly we hold that the artificial
bifurcation of the services rendered by the Appellant into Cargo

Handling Service, Site Formation Service and Business Auxiliary Service

and demanding service tax in the impugned order is not sustainable and
hence it is liable to be set aside.

16. The Appellant raised the issue of 'limitation'. We observe that there
Is no evidence brought on record to establish that the Appellant has
intentionaiiy evaded service tax. Since 'mining services* were liable for
 Service Tax Appeal No. 165 of 2008

serv,ce tax only wfth effect frc 01/06/2017; demand of service tax by
invoking extended period is not sustainable. Accordingly, the demands
confirmed in the impugned orders are liable to be set aside on the
ground of .limitation also.

17. Regarding penalty imposed in the impugned order, we observe that

the demands confirmed in the impugned are are not sustainable, when
the demand itseif is not sustainable on merit as well as on limitation,
the question of imposing penalty does not arise.

16. in View of the ahove findings, we set aside the Impugned order and
allow the appeal filed by the Appellant.

CPronounced in the open court on 06.06.2023....)

Sd/-
(Ashok Jindal)
Member (Judicial)

Sd/-
(K. Anpazhakan)
Member (Technical)
131465/2025

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

LA. NO. OF 2025'

SPECIAL LEAVE PETITION (C) NO. OF

2025^

IN THE MATTER OF: -

IN THE MATTER OF:

Commissioner of Service Tax, Kolkata ...Petitioner

Versus
\

G.S. Atwal & Co. Engineering Pvt. Ltd. ...Respondent

AN APPLICATION FOR EXEMPTION FROM FILING

CERTIFIED COPY OF IMPUGNED ORDER

THE HON'BLE CHIEF JUSTICE OF INDIA AND HIS

COMPANION JUSTICES OF THE HON'BLE SUPREME
COURT OF INDIA.

THE HUMBLE PETITION OF THE

PETITIONER ABOVE NAMED.

MOST RESPECTFULLY SHOWETH AS UNDER:

1. That the Petitioner above named respectfully

submit that the accompan^ang Special Leave
Petition is being filed against the Impugned
 2-c>o

Judgment and Order dated 09.07.2024

passed by the Hon'ble High Court of Calcutta
in GSXA no 11 of 2024.

2. That the facts of the accompanying Review

Petition may be treated as part and parcel of
the present appHcation as the same are not
being repeated herein for the sake of brevity.
3. That the certified copy of the order dated
09.07.2024 is not readily available with the
Petitioner. Certified Copy of Order dated
09.07.2024 has been applied on IZ-1 lj
Vide No i£L^ Therefore, in view of the ■
urgency involved in the matter, the Petitioner
is filing the present Review Petition on the
basis of the Internet copy of the Impugned
Order as and when it is received in the interest
ofjustice. However, the Petitioner undertakes
to file the certified copy of the Impugned
Order, as and when, it is received, if so,
required by the Hon'ble Court

4. That, this Application is bonafide and not

intentional.

PRAYER
 Zf I
It is, therefore, most respectfully prayed that this Hon'ble
Court may graciously be pleased to:

(a) Exempt the petitioners from filing the certified

copy of Order dated 09.07.2024 passed by the
Hon'ble Highfeourtof Calcutta in CEXA No. 11/2024]

(b) And pass such other order and orders as this

Hon'ble Court may deem fit and proper in the
circumstances of the case.

AND FOR THIS ACT OF KINDNESS THE PETITIONER AS IN

DUTY BOUND SHALL EVER PRAY.

Fil^ by:

^ G. S. Wlakker
Advocate for the Petitioner

Filed on: 13.01.2025

131460/2025

IN THE SUPREME COURT OFINDIA

CIVIL APPELLATE JURISDICTION
LA.NO. OF 202^"
IN

SPECIAL LEAVE PETITION (Civil) NO. OF 2025"

IN THE MATTER OF:-

Commissioner of Service Tax, Kolkata ..Petitioner

Versus

G.S. Atwai & Co. Engmeering Pvt. Ltd. ...Respondent

AN APPLICATION FOR CONDONATION OF DELAY TIV

FILING THE SPF.CUL LEAVE,PF.TTTTON

THE HON'BLE CHffiF JUSTICE OF INDIA AND HIS

COMPANION JUSTICES OF THE SUPREME COURT OF
INDIA

THE HUMBLE PETITION OF THE PEmiONER

ABOVENAMED '
MOST RESPECTFULLY SHOWTH:-

1. That the instant Special Leave Petition is being filed against

the impugned Order dated 09.07.2024 passed by the
Hon'ble High Court Hon'ble High Court of Calcutta in

CEXANo. 11/2024.

2. That all the facts and circumstances of the case have been

set out in the aforesaid Special Leave Petition and List of

Dates and for the sake of brevity the same are not being

reproduced here.The petitioner craves leave oftins Hcn'ble

Court to refer and rely upon the same.

3. The petitioners submits that under the Government ofIndia

(Allocation of Business) Rules, 1963, the file/ case papers

are required to pass through several departments/ officers

involved in the matter who are expected to examine the

matter and then opine as to the feasibility of filing the

petition.
4. Therefore, there is delay in filing the instant petition. It is
respectfully'submitted that the delay in filing the above
petition which has been occasioned on account of

unavoidable circumstances beyond the control of the

petitioners Department, would be evident from the

following reasons:-

09.07.2024 Date of impugned order passed by the

Hon'ble High Court.

22.08.20241 Date on which the proposal to file the

present Special Leave Petition received

in the Ministry.

11.11.2024 (i)File with regard to the instant case was

submitted to Advice-B section ofDoLA

for seeking the opinion of Ld. Law

Officer.
22.11.2024 i. Panel Counsel was engaged for

To drafting SLP.

28.11.2024 ii. Draft SLP was received from panel

counsel.

iii. The Draft SLP was returned to the

Panel Counsel

review/amendment.

iv. The SLP is Vetted.

29.11.2024 i. Annexures and documents were

called and collected from the

30.12.2024 relevant office of the Appellant.

ii. The documents were typed and

prepared.

iii. The SLP was approved and

j

forwarded to the Central Agency

Section.

iv. The SLP was signed was signed by

the Authorised Signatory of the

Ministry of Finance(Legal Cell).

 .12.2024 Special Leave Petition filed before this

Hon*ble Court.

After receiving the vetted Special Leave Petition and

applications, annexures were typed, paper books were

prepared, Affidavit was sworn and subsequently, the same

is being filed before this Hon'ble Court without any further

1. -

delay.

However, in this whole process, there has been a delay of

days which has been occasioned due to government

procedures and concurrence required from a number of

authorities. In view of the above facts and circumstances, the

delay in filing the petition is not deliberate or intentional and

in case the delay in filing the petition is not condoned,

irreparable loss and injury shall be caused to the petitioners.

7. It is further submitted that the petitioners humbly seeks to

draw the kind attention of this Plon'ble Court to the views

expressed by this Hon'ble Court that liberal approach may be

adopted and the Court should not take too strict and pedantic
 l^T
stand which will cause injustice while considering the

application for condonation of delay, m terms of its

judgments in cases of Collector Land Acquisition, Anantnag
& Anr. Versus Mst. Katiji & Ors. And Bhag Singh and Anr.

Versus Major Daljit Singh &■ Ors. It is submitted that the

principles for Condonation of delay laid down in the above
cited cases may therefore, be adopted in the present case also.

8. The petitioners respectfully submits that this Application is

made bonafide and in the interest of justice, therefore, this

Hon'ble Court may be pleased to condone the delay of

days in filing the instant petition.

PRAYER

It is therefore most respectfully prayed that this Hon ble

Court may graciously be pleased to: -

A. Condone the delay of days in filing the Special

Leave Petition against the order/ judgment dated
 09.07.2024 passed by the Hon'ble High Court of

Calcutta in CEXA No. 11/2024.

B. And/or pass such other orders as this Hon'ble Court

may deem fit and proper in the circumstances of the

case.

AND FOR THIS ACT OF KINDNESS AS THE PETITIONERS

IS DUTY BOUND SHALL EVER PRAY.

DRAWN BY FILED]BY

Advocate ^ [GS IV1AKKER]\^

Advocate for the petitioner;

DRAWN ON: .01.2025

FILED ON: 13.01.2025
131462/2025

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION
l.A. NO. OF 2025

SPECIAL LEAVE PETITION (CIVIL) No. of 2025

IN THE MATTER OF:

Commissioner of Service Tax,

Kolkata .Petitioners
Versus
G.S. Atwal & Co. Engineering
Pvt. Ltd. Respondent

APPLICATION FOR CONDONATION OF DELAY IN RE

FILING SPECIAL LEAVE PETITION

The Hon'ble Chief Justice of India

And his companion Justices of

The Hon'ble Supreme Court of India.

The Special Leave Petition of the

petitioner abovenamed.

MOST RESPECTFULLY SHOWETH:

1. That the petitioner has preferred accompanying^

Special Leave Petition under Article 136 of the
 Constitution of India against the impugned

judgment and final order dated 09.07.2024

passed by the Hon'ble High Court of Calcutta In

CEXA No.11/2024.

That there is delay of days In re-filing the

petition before this Hon'ble Court after curing all

the defects notified by the registry. The reason

for delay in re-filing the petition is set out herein

below.

It Is submitted that the delay in re-filing the present

petition was caused in getting some relevant

documents from the concerned department for

preparation of the present Petition of delay

accrued.

4. That some delay has occurred in re-filing the

Special Leave Petition which was unintentional and

 ■ - a i;
due to circumstances as mentioned In foregoing
paragraphs.

PRAYER

It is, therefore, most respectfully prayed that

this Hon'ble Court may graciously be pleased to:

(a) Condone the delay of days In refilling

Special Leave Petition against the against the

Impugned judgment and final order dated

09.07.2024 passed by the Hon'ble High Court of

Calcutta in CEXA No.11/2024.

(b) Pass such other and further order as this

Hon'ble Court may deem fit and proper In the
circumstances ofthe case.

Drafted By: Filed by

Dharmendra Kumar Pandey

[G.^.\MAKkAR]
ADVOCATE FOR THE PETITIONER

Filed on: /03/2026

 -•2;^
IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

LA. NO. OF 2025

SPECIAL LEAVE PETITION (CIVIL) No. of 2025

IN THE MATTER OF:

Commissioner of Service Tax,

Kolkata ...Petitioners
Versus
G.S. Atwal & Co. Engineering
Pvt. Ltd. Respondent

AFFIDAVIT

I, Resham Dwivedi, Deputy Commissioner, Legal Cell,

Central Board of Indirect Taxes and Customs,
Department of Revenue, Ministry of Finance,
Government of India, do hereby solemnly affirm and
state on oath as hereunder:-

That I am the authorized person on behalf of

the Petitioner In the abovementioned matter

• —•!.j.j fx
and well conversant with the facts and

circumstances of the case therefore competent

to swear this affidavit.

 ^13-

I say that the contents mentioned in the

application for condonation of delay in re-filing

Special Leave Petition are true and correct to

my. knowledge and belief and nothing has

been concealed therefrom.

OT airgw/Deputy commlssionef
ftW vfalcfU PlHFl)
Minislry of Finance {Oeplt. of R«)v>
'qnn HT^BTT/GovL of lr>cf«
VERIFICATION: 'ii fc^ft/'New Delhi

Verified at New Delhi on this day of. ..APjv'2025

that the contents of the above affidavit
mentioned in Para 1 & 2 are true and correct to
best of my knowledge and belief and nothing has
been concealed therefrom.

DEPONENT

(RESHAM
gtt awsRT/DcptJly Cotnflgsioy
Mlnlsiry of Finanw
«nw m^/GovL of Indta
^fe^/New Delhi

attested
^
„»GOV-.-°nuo«A
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