GANTA RAMANAIAH NAIDU Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS appeal is directed against the Order -in -Original No. 09/2008 -S. Tax (Commr.) dated 26 -11 -2008, passed by the Commissioner of Customs, Excise and Service Tax, Guntur.

(2.) THE relevant facts that arise for consideration are that the Appellant herein, is registered under the category of "Site Formation and Clearance Service" with the authorities. The Assessee is engaged in providing the services of blast -hole drilling, blasting, excavation, loading, transport, spreading, dumping, etc., of the overburden by using machines at Open Cast Mines and also undertaking similar activities which, according to the department, were covered under the taxable services. Revenue authorities, on verification conducted, found that the Appellant did not pay the service tax. The Revenue authorities recorded statement of the Proprietor, scrutinized Income -tax Returns and copies of the contracts entered into by the Appellant with M/s. Western Coalfields Ltd. (A Govt. of India Undertaking).

(3.) LD . Counsel on behalf of the Appellant submits that the Appellant's activity of providing the services, i.e., blast -hole drilling, blasting, excavation, loading, transport, spreading, dumping, etc. would not fall under the category of 'site formation and clearance, excavation and earth moving and demolition service'. It is the submission that the Appellant does not engaging any site along with clearance activity and similarly he also does not undertake excavation along with demolition. It is the submission that the Appellant's activity is connected with the activity of mining and the activities of removal of overburden and excavation are to be considered as incidental to mining and hence not taxable under the category 'site formation and clearance service'. It is the submission that the hiring of equipment is the subject -matter of the contract and the relevant heading would be "supply of tangible goods services" with effect from 16 -5 -2008. It is the submission that the Appellant has not provided any service or work for construction, geophysical, geological or similar purposes; the entire work is done in respect of existing mines and would come under the purview of mining services. It is the submission that in view of this, reliance placed by the adjudicating authority on CBEC Circular dated 12 -11 -2007 is inappropriate. As regards the imposition of penalty, it is the submission that though the Appellants had taken the registration certificate under the category of 'site formation and clearance services' on 27 -3 -2006, he could not discharge the service tax liability as the service receiver, i.e., M/s. Western Coalfields Ltd., had certain doubts about the levy of service tax on such activities. It is the submission that the service receiver agreed to reimburse the service tax liability after obtaining the letters of undertaking from the Assessee. Consequently, the said activity was exempted by the CBEC. Hence the provisions of Section 80 can be invoked in the case and the penalties imposed under Sections 76, 77 and 78 of the Finance Act, 1994 be set aside. For the above propositions, he would relied upon the following case laws: