2026-VIL-738-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Classification of services as "Site Formation and Clearance, Excavation and Earthmoving and Demolition Services" or "Mining Services" - Providing of services to M/s. Rajasthan State Mines and Minerals Ltd., including overburden, excavation, and truck loading of lignite. The respondent-assessee argued that these activities were classifiable as "Mining Services", which were introduced with effect from 01.06.2007 and therefore, were not taxable prior to the said date - Whether the services provided by the respondent fall under "Site Formation and Clearance, Excavation and Earthmoving and Demolition Services" under Section 65(97a) of the Act, as claimed by the Revenue, or under "Mining Services" under Section 65(105)(zzzy) as classified by the respondent – HELD - The essential character of the work undertaken by the respondent was mining of minerals, and the activity would be classifiable under Mining Services w.e.f. 01.06.2007 - The activity of mining was not taxable prior to 1.06.2007 and the demand of service tax for the period prior to introduction of the mining services is unsustainable by incorporating it under the category of site formation – The CBEC Circular No.123/5/2010-TRU dated 24.05.2010 clarified that site formation, clearance excavation, earth, moving and demolition services are attracted only if the service providers provide the services independently and not as part of a complete work such as laying of cables under the road. A comprehensive contract cannot be vivisected for charging service tax relating to site formation service, as the activity of site formation was merely incidental to or in relation to the contract of mining of ore undertaken - The respondent has been paying service tax since 1.06.2007 under the category of “Mining Services” and the same has been accepted by the Department. In that view of the matter, it is not open to the Department to tax the same activity under a different category merely because the mining activity was not taxable at that time. The order passed by the Adjudicating Authority is confirmed and appeal filed by the Revenue is dismissed
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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