The transport services within the mines constitute the GTA services: CESTAT

The Kolkata Customs, Excise and Service Tax Appeals Tribunal (CESTAT) ruled that transportation services in the mines constitute freight forwarding agency (GTA) services.

The assessee, M/s. Tycoon Industries Private Limited works inside the mining area under an agreement with M/s. Tata Steel Limited (TSL). During the assessment process, the Commissioner dropped the claim for service tax in the amount of Rs. 7,18,33,115/- on mining services under Section 73(1) of the finance law of 1994 by ruling that transport activity in mines in accordance with work orders cannot be qualified as mining services.

The aggrieved department filed an appeal with the CESTAT. Counsel for the appellant argued that the work of transporting raw coal in the respective areas of the mines must also be classified as mineral, oil or gas extraction services and that these cannot be taxed at title for the transport of goods by road service.

Counsel for the respondent relied on the Supreme Court’s decision in Commissioner of Central Excise and Service Tax, Raipur Vs. Singh Carriersargued that the transportation of coal from mine heads to railway sidings in mining areas is more properly classifiable under section 65(105)(zzp) of the Act, namely, under the heading “transportation of goods by road service” and does not involve any service connected with “the extraction of minerals, oil or gas” as provided for in section 65(105)(zzzy) of the Act.

The Tribunal, relying on the decision of the Supreme Court in Singh Carriers observed that the transport activities were carried out in the mining area of ​​TSL, and the confirmation of the demand for such activity by treating it as a mining service cannot be supported. The Coram of Mr PK Choudhary, Member (Judicial) and MP Anjani Kumar, Member (Technical) ruled that “we are of the opinion that transport costs cannot be included in the assessment of mining services and therefore the order of Ld. Jurisdiction is correct in the eyes of the law”.

Mr. S.S. Chattopadhyay and Mr. Ankit Kanodia appeared on behalf of the appellant and the respondent respectively.

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Tycoon Industries Private Limited v Service Tax Commissioner-I

Counsel for the Appellant: Shri SS Chattopadhyay

Counsel for the Respondent: Shri Ankit Kanodia

REFERENCE: 2022 TAXSCAN (CESTAT) 427

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