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May 2008

Mining Service — Interpretation issue

By Puloma Dalal, Bakul B. Mody, Chartered Accountants
Reading Time 1 mins
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II. Tribunal :


6. Mining Service — Interpretation issue :



National Mining Co. Ltd. v. CCE, Dibrugarh, 2008 (10) STR
136 (Tri. – Kolkata)

â Service tax with
interest and penalty was demanded by the Revenue under the category of ‘Site
Formation & Clearance, Excavation and Earth-moving and Demolition Services’ on
receipts of the appellant in pursuance of contract with M/s. North Eastern Coal
Field, Coal India Ltd., Assam.

The appellant had collected tax amount from the client and
hence did not contest the tax amount in the appeal. They challenged the levy of
interest and penalty, contending that services rendered were in the nature of
mining service which was brought under the tax net w.e.f. 1-6-2007 and therefore
for period prior to 1-6-2007, no service was taxable and liability of interest
and penalty did not arise.

It was held that since liability of tax was not challenged by
the appellant, interest was required to be discharged. However, penalty was set
aside, based on disputed nature of service, interpretation of the scope of
service and the facts of appellant’s discharge of service tax liability.

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