Order Date – 23 November 2023

Parties: M. Palanisamy Vs Commissioner of GST & Central Excise

Facts –

• The Appellant, M. Palanisamy, is registered under the categories of "Works Contract Services" and "Transport of goods by road/goods transport agency services'.
• A Show Cause Notice dated 9.10.2015 was issued to the appellant proposing to demand service tax on the services rendered by them under the categories of "Mining service", "Supply of tangible goods service" and “Site formation service”.

Issue –

• Whether the appellant is liable to discharge sevice tax?

Order –

• The Tribunal observed that the separate definition of ‘minor minerals’ under the MMDR Act does not take sand outside the scope of ‘minerals’. From the activities of the appellant it is clear that they are rendering taxable service to PWD in the quarrying and loading of the mineral i.e. sand which is leviable to service tax. The tax is sought to be levied on the ‘taxable service’ in relation to mining and not on the goods that have been quarried.
• In the case of quarrying for sand the tax is on the value added activity and not on the sand per se. In other words, what is sought to be taxed is the activities in relation to ‘mining’ and not ‘mining’ itself. Hence the plea of the appellant that activities ‘in relation to mining’ is chargeable to tax but not mining does not succeed. Hence it was fond that the appellant’s activity of quarrying/ earth work excavating of sand / wet sand and loading in the lorries/ tippers of the consumer by the appellant being covered under the taxable service as defined under Section 65 (105) (zzzy) of FA 1994.
• Investigations by the officers at TAMIN revealed that the appellant supplied excavators and rock breakers at hourly rates to TAMIN. The appellant provided the operators for the machines, took care of the day-to-day repair and maintenance and also insured the vehicles. The charges paid by TAMIN to the appellant were inclusive of all statutory dues. Hence effective control over the vehicles was exercised by the appellant and this was a case of rendering service to TAMIN. Since the appellant was unable to produce a contract for supply of vehicles or to prove its terms, therefore, for re-working out the correct demand, the cases has to go back to the Original Authority.
• Further the appellant have not been able to demonstrate by way of documents that their principal activities were towards the construction of roads for use by the general public. The benefit of Sl. No. 46 of Notification No. 22/2016-Service Tax dated 13/04/2016 will not be available as the taxable service is not provided by the appellant to Government, a local authority or a governmental authority nor are the principal activities meant for construction of roads etc. The activities hence get covered under the definition of taxable service as per Section 65(105)(zzza) of FA 1994.
• There is a positive act of suppression on the side of the appellant showing willful suppression on their part. Hence suppression of information with intention to evade payment of duty is established. Thus the appeal is disposed off.