COMMISSIONER OF CENTRAL EXCISE Vs. DALMA ENERGY LLC

JUDGEMENT

(1.) As common questions of law and facts arise in these two appeals, they are being disposed of by this Common judgment and order. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 26-7-2013 passed by the learned Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as "the CESTAT") in Central Excise Appeal No. ST/10065/2013-DB and Central Excise Appeal No. ST/10066/2013-DB [: 2014 (35) S.T.R. 412 (Tribunal)], the appellant-revenue has preferred the present appeals to consider the following substantial questions of law.

(2.) That the respondent-M/s. Dalma Energy LLC, is an International Drilling Contractor with its headquarters in Sultanate of Oman and owns, operated land rigs for their clients all over the world. In India, their clients are M/s. ONGC, Oil India, Essar Oil, GSPC Ltd., Niko Resources Ltd. etc. Therefore, for rendering drilling services to GSPC Ltd. and Niko Resources Ltd., they have opened their office at Alkapuri, Vadodara and took service tax registration under "Supply of Tangible Goods Service" which became taxable w.e.f. 16-5-2008 vide sub-clause (zzzj) of Section 65(105) of the Finance Act, 1994. However, looking to their expertise and field of operations, it appears to the Adjudicating Authority that the services rendered by them appears to be relating to mining of oil or gas which became taxable w.e.f. 1-1-2007 as Mining of Minerals, Oil or Gas service vide sub-clause (zzzy) of Section 65(105) of the Finance Act, 1994 and as such, they were liable to pay the service tax on the services rendered by them with effect from 1-1-2006 (in the present case w.e.f. 1-1-2007 from the date of the contracts entered into with the service provider in question). For providing the services as "Mineral Services", the show cause notice came to be issued by first Adjudicating Authority and the respondent was called upon to show cause as to why:-

(3.) By the said show cause notice dated 28-6-2012, the Finance Manager of respondent was also called upon to show cause as to why the penalty should not be imposed upon him under Section 77 of the Finance Act, 1994. The said show cause notice came to be adjudicated by the Commissioner, Central Excise, Customs & Service Tax, Vadodara-I and by order dated 11-10-2012, the Adjudicating Authority passed Order-in-Original confirming the demand for recovery of service tax as per the show-cause notice by holding that the services provided by the respondent as "Mining Services" before 16-5-2008 and was liable to pay the service tax on the same for the period from 1-6-2007 to 28-3-2008. That the Adjudicating Authority has also imposed penalty under Section 75 of the Finance Act, 1994 and imposed penalties under Sections 76, 77(1)(a) and 78 of the Finance Act, 1994. The Adjudicating Authority has also imposed penalty under Section 70 of the Finance Act, 1994 on respondent for not filing the prescribed returns in time. The Adjudicating Authority has also imposed personal penalty of Rs. 10,000/- on one Shri Anandan Pitchumani, Finance Manager of M/s. Dalma Energy LIC under Section 77(2) of the Finance Act, 1994.