2023-VIL-880-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Classification of service - ‘Mining’ activity’ or ‘Site Preparation Services’ – Appellants have carried out the works related to exposure of coal in all seams - whether the activity of ‘exposure of coal seams’ would fall within the purview of “site formation and clearance, excavation and earth moving and demolition” service or the same are “in relation to mining of mineral” which service was brought within the purview of taxation by section 65(105)(zzzy) of Finance Act, 1994 only with effect from June 1, 2007 – HELD - the Appellant was not given the contract for extracting the minerals. The contract was only removal of over burden for exposure of coal at all seams - Board issued Circular F.No.B1/6/2005-TRU dated 27.07.2005, explaining the scope of 'Site Formation Service', wherein it is stated that prior to activity of mining, preparation services of site formation and clearance, excavation and earthmoving or levelling were 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. The activities under taken by the appellant are squarely covered within the ambit of 'Site Formation Service' and liable to service tax w.e.f.16.06.2005 - the demand of service tax along with interest under 'Site Formation Service' is confirmed and penalties imposed under Sections 76 and 78 are set aside – appeal is partly allowed
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