MANU/CB/0423/2010

Equivalent/Neutral Citation: 2011[22]S.T.R.553(Tri. - Bang.)

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL

SOUTH ZONAL BENCH, BANGALORE
Final Order No. 8/2011 in Appeal No. ST/575/2008
Decided On: 09.12.2010
Commissioner of C. Ex., Hyderabad Vs. Vijay Leasing Company
Hon'ble Judges/Coram:
S/Shri M.V. Ravindran, Member (J) and B.S.V. Murthy, Member (T)
ORDER
M.V. Ravindran, Member (J)
1. This appeal is filed by the Revenue against the Order-in- Appeal No. 38/2008 (H-II)
S. Tax, dt. 12-8-2008.
2 . The relevant facts that arise for consideration are that the respondents herein got
themselves registered under the category of "Site formation and clearance, excavation
and earthmoving and demolition" service and paid service tax under the said category
for the period 16-6-2005 to 30-9-2006. The respondents were engaged in providing
services of mining to their clients/principals. With introduction of separate service under
the category of mining service w.e.f. 1-6-2007, the respondents were of the view that
their service would fall under the new category and the service tax paid by them was
not statutorily required to be paid. Accordingly, they preferred a refund claim for an
amount of Rs. 1,58,11,007/-. The Adjudicating Authority after following the principles
of natural justice rejected the said refund claim. Aggrieved by such an order, the
respondents preferred an appeal before the Commissioner (Appeals) who set aside the
impugned order and allowed their refund claim. Revenue is in appeal against such an
order.
3. Ld. DR would draw our attention to the clarifications issued by the Board when the
mining service came into the service tax net. He would submit that the services
provided in relation to mineral mining oil and gas are comprehensively covered under
the proposed service would indicate that earlier they were covered under "Site
formation and clearance, excavation and earthmoving and demolition" service. He would
also draw our attention to CBEC's circular dt. 12-11-2007 and submit that excavation,
drilling and removal of overburdens in the mine would be covered under the definition
of "Site formation and clearance, excavation and earthmoving and demolition" service.
He would submit that in this case the contracts entered by the respondents with the
principals indicate that there being the excavation, drilling and demolition service. It is
also his submission that the respondents having discharged the service tax liability on
self-assessment, could not filed a refund claim without there being any challenge. He
would rely upon the decision of the Tribunal in the case of KEC International Ltd. v.
CCE, Jaipur-I [MANU/CE/7211/2006 : 2006 (4) S.T.R. 473 (Tri.- Del.)] and in CCE,
Chennai v. EID Parry India Ltd. [MANU/CC/0001/2006 : 2006 (4) S.T.R. 585 (Tri.-
Chennai)] for the proposition that once self-assessment is done, the amount is not
refundable. He would draw our attention to the various grounds of appeal taken by the

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 Department which are mainly regarding the inclusion of the service under the category
of "Site formation and clearance, excavation and earthmoving and demolition" service.
4. Ld. Counsel appearing on behalf of the respondent would draw our attention to the
various clauses of the agreements, entered by them with their principals. He would
submit that the contracts would clearly indicate that the respondents were supposed to
do the entire mining activity and till the excavation of Iron ore and processing of Iron
ore. He would draw our attention to the consideration clause which indicate that they
were liable to be paid for every ton Iron ore which has been taken out of the mine. He
would submit that for taking of Iron order from a mine, incidental work like levelling,
site formation, clearances, excavation etc. are required to be done. He would submit
that this Bench in the case of M. Ramakrishna Reddy v. CCE&C, Tirupathi
[MANU/CB/0531/2008 : 2009 (13) S.T.R. 661 (Tri.- Bang.)] has clearly held that
removal of overburdens and excavation of ore undertaken as per contract, would fall
under the category of mining services and liable to be taxed under the head from 1-6-
2007 only. He would also submit that the Hon'ble High Court of Rajasthan in the case of
Central Office Mewar Palaces Org. v. UOI [MANU/RH/0654/2008 : 2008 (12) S.T.R. 545
(Raj.)] has clearly held that the self-assessment would not amount to assessment done
by an officer and hence there is no restriction for claim of the refund of the duty so self-
assessed.
5. We have considered the submissions made at length by both sides and perused the
records.
6. The ld. Commissioner (Appeals) while setting aside the Order-in-Original has clearly
recorded the following factual findings, after considering the contracts which were
produced before him :-
6... On the other hand, as seen from the contract entered into by the
appellants, they are primarily engaged for "Winning the minerals" i.e. extraction
of iron ore and the other activities performed by them such as excavation,
processing i.e. grading, sorting etc. and related/incidental transport, loading
activities etc., are all incidental to the main activity of mining. The activity of
excavation, undertaken by the appellants should be understood in the context
of the primary activity undertaken by them, not withstanding the dictionary
meaning of "excavation", on which the lower authority has so heavily harped."
7...
8... The lower authority has taken the view that the activity undertaken by the
appellants is "excavation", which is already defined under the head ""Site
formation and clearance, excavation and earthmoving and demolition" and
hence the service undertaken by them does not attract the provisions of Section
65. In my view, this argument is not tenable. As already explained supra, the
work undertaken by the appellants is of composite nature and the essential
character of work undertaken by them is "Mining" or "Winning of Minerals",
which certainly cannot be classified under the service category "Site formation
and clearance, excavation and earthmoving and demolition". The said category
of service is leviable to service tax only with effect from 1-6-2007 i.e. after the
introduction of mining service in the statute.
The above reproduced factual findings are not challenged by the Revenue in their
grounds of appeal. On perusal of the contracts which were produced before us by the
respondents, we are in agreement with the findings of the ld. Commissioner (Appeals)

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 that the activity of "Site formation and clearance, excavation and earthmoving and
demolition" etc. are incidental to the contract of the mining of Iron ore undertaken by
the respondents. In view of this, factually, the activity of the respondents during the
relevant period when they paid the service tax was not taxable under the category of
"Site formation and clearance, excavation and earthmoving and demolition" service. It
is also undisputed that the services rendered by them would fall under the category of
mining services and such services become liable for service tax from 1-6-2007 as is
settled by this Bench in the case of M. Ramakrishna Reddy (supra).
7. We now address to the submissions made by the ld. JDR as regards the refund of the
amount paid by the assessee on self assessment. It is his submission that the assessee
having self-assessed, the amount of service tax payable and having discharged the
same with interest, cannot now turn around and claim that he has paid the service tax,
wrongly. This argument put forth by the ld. JDR is untenable for more than one reason.
First of all, it is an admitted fact that the amount paid by the assessee under the self-
assessment as per the provisions of the Finance Act, 1994. When the respondents came
to know that the activity undertaken by them under these contracts would fall under the
mining activity which came into service tax net from 1-6-2007, the assessee was
justified in filing the refund claim as the self-assessment cannot be considered as an
assessment made by an officer under Section 73 against which an appeal or challenge
lies. We find that the Hon'ble High Court of Rajasthan in the case of Central Office
Mewar Palaces Org. (supra) has clearly settled the law, which we may respectfully,
reproduce :-
This appeal has been filed by the assessee seeking to challenge the impugned
orders of the Tribunal, so also of the authorities below. The appeal was
admitted vide order dated 14-2-2007, on the following substantial question of
law :-
Whether in the facts and circumstances the claim to refund of service
tax which has been paid in excess wrongly could have been refused?
2 . The necessary facts are, that the assessee voluntarily deposited certain
amounts with the department, purportedly representing service tax on different
services, which were charged by the assessee from its sister concerns/clients,
for the period September 1999 to May 2000. Realising that those services were
not chargeable to service tax, the assessee issued credit notes with respect to
the entire amounts to its concerns/clients, and lodged a claim for refund on 24-
11-2000, for a sum of Rs. 3,40,040/-, which was subsequently revised on 18-
12-2000 to Rs. 3,36,980/-.
3 . The learned Assistant Commissioner issued show cause notice to the
assessee, calling upon, as to why the claim for refund be not rejected, as the
assessee has not produced the evidence to establish justification of the claim.
This notice was replied to the effect, that they would furnish original invoices
raised on account of non-taxable services, and the original debit/credit notes
raised in favour of the clients, and evidence regarding payment received only
for the balance amount after adjustment of such credit notes.
4. However, the learned Assistant Commissioner found, that the representative
of the company, who appeared showed credit/debit notes issued to their
clients/sister concerns, but could not produce invoices, details/evidence of
value, ascertained for non-taxable/taxable services. With this, it was also

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 found, that the assessee-company as a whole is registered, and has been
depositing service tax, which covers all taxable services rendered by the
company to its clients, and that the main purpose of carrying on the operations
of the company is to centralise all the professional functions in a totally de-
centralised environment, through recruiting the professionals who are expert in
the particular field. The learned Assistant Commissioner also found, that the
assessee did not furnish complete details and evidence relating to refund claim
to verify amount claimed by the assessee. The claim and documents did not
show as to how they arrived at the value of non-taxable services, and that mere
production of statement showing value of unit-wise taxable services and
services, which are non-taxable services cannot be considered
authentic/genuine document, for the purpose of granting refund. It was also
found, that nowhere the evidence produced by the assessee establish, that the
service tax collected by them has not been virtually passed on to their
clients/customers, and thus, it was observed, that incidence of burden has been
passed on to the clients/customers, apart from the fact that assessee has
collected tax without authority of law for non-taxable services, and by merely
raising credit notes, does not authorise the assessee to claim refund. Thus, the
prayer for refund was rejected.
5 . The appeal against this order was filed, which was dismissed by the
Commissioner, by adopting an entirely different process of reasoning, viz. that
all the services with respect to which the service tax was charged are included
under the head "Manpower Recruitment Agency" and "Security Services" and
that they are covered by the definition of "Management Consultant". Thus it was
found, that the services were taxable, and the appeal was dismissed. It may be
observed, that contention of the learned counsel for the appellant was, that all
necessary documents been produced before the learned Assessing Officer.
6 . The matter was carried in further appeal before the learned Tribunal, and
surprisingly, the Tribunal dismissed the appeal by adopting yet different
reasoning, viz. that since the assessee had not challenged the assessment
order, the claim of refund cannot be entertained, so as to indirectly challenge
the assessment order, without filing statutory appeal, against the assessment
order. It was also found, that in the case in hand, the order is appellable and
no appeal having been filed, the claim of refund has no merit, and the appeal
was dismissed.
7 . We have heard learned counsel for the parties, and have gone through the
relevant provisions of the Finance Act, 1994, enacting provisions for levy of
service tax, so also the relevant provisions of Central Excise Act, as well.
8. At the outset, it may be observed, that under the scheme of things, starting
from Section 73 onwards it is clear, that the assessee himself is to deposit
service tax in form ST-3, there is no provision for assessment. Passing of
assessment order is contemplated only in cases where the notice is issued
under Section 73, and it is found, that service tax is not levied or paid, or has
been short levied or short paid etc. In that view of the matter, the very
basis/reasonings given by the learned Tribunal, simply have no legs to stand.
Admittedly, the appeal under Section 85 lies against a specific order of the
concerned authority in Form ST-4, which requires to disclose, designation and
address of the officer passing the decision or order appealed against, and the
date of decision or order, so also the date of communication of the decision or

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 order appealed against to the appellant. Admittedly, when no order capable of
being appealed against, had ever been passed, it cannot be said that the
assessee could file appeal against the assessment order, and not having so filed
appeal he cannot lay the claim of refund. Thus, the order of the Tribunal cannot
sustain.
9 . Then so far as the reasonings adopted by learned Commissioner are
concerned, the learned Counsel for the appellant has invited our attention to
Annex. 4, another order of the same authority, being Commissioner dated 30th
September 2005, passed in the case of the assessee itself, for the subsequent
period April 2000 to March 2002, wherein it has clearly been held, that all these
services as cataloged in the said order are not chargeable to service tax. And
consequently the proceedings initiated against the assessee, wherein the
adjudicating authority had demanded tax, were set aside, and the proceedings
were dropped. It is not shown, that this order dated 30-9-2005 has, at all been
appealed against, nor has it otherwise been shown to be wrong. In that view of
the matter, the reasonings given by the learned Commissioner in the order
Annex. 2, also cannot sustain.
10. Then remains the order Annex.1, which proceeds on the basis, as quoted
above, while according to the learned counsel for the appellant, all relevant and
necessary documents had been shown in original, and photostat copies were
produced on record, but they have not been looked into.
1 1 . In that view of the matter, the question as framed is required to be
answered against the Revenue, and in favour of the assessee, but at the same
time, the relief which we are inclined to grant is, only to the effect, that while
setting aside the orders Annex. 2 and 3, we remit the matter back to the
Commissioner (Appeals-II), Central Excise and Customs, Jaipur, to restore the
appeal to its original number, and adjudicate the claim of the assessee afresh in
accordance with law, keeping in view the observations made above, and also
keeping in view the order passed by the said Commissioner dated 30-9-2005 in
the case of the assessee itself. The Commissioner is also directed to decide the
appeal expeditiously.
1 2 . The appeal is accordingly allowed. The orders of the Tribunal and the
Commissioner are set aside and the matter is remanded as above.
8 . We find from the above reproduced judgment of the Hon'ble High Court, that the
point raised by ld. DR, is now squarely settled in favour of the assessee. In view of this,
the Tribunal's decision relied upon by the ld. JDR will be of no consequence.
9 . Accordingly, we are of the considered view that the findings reached by the ld.
Commissioner (Appeals) in the impugned order are correct, proper and legal and does
not require any interference. Appeal filed by the Revenue is rejected.
(Operative portion of this pronounced on conclusion of the hearing.)
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