Order Date – 6 March 2023

Parties: M/s HLS Asia Ltd. Vs The Commissioner, Service tax Commissionerate.

Facts –

• The Appellant, M/s HLS Asia Ltd., engaged in the business of providing services of wireline logging and perforation to Oil and Natural Gas commission and Oil India Limited and data processing services to OIL under agreements. The appellant is registered with the Service Tax department and paid service tax considering that these services fall under ‘Technical Testing and Analysis’. 
• According to both clients, these services do not fall under Technical Testing and Analysis. So, the appellant stopped paying service tax from 25.5.2005 after informing the department. From 1.6.2007, appellant started paying service tax under the new category of taxable service ‘mining services. The department has not objected to this payment of service tax under ‘mining services’.
• Show Cause Notice6 dated 23.10.2008 was issued to the appellant stating that it had come to the notice of the Range Office that the appellant had not been discharging its full service tax liability under TTA and demanding service tax for the period 10.9.2004 to 31.3.2008 invoking extended period of limitation which culminated in the impugned order. 
• Hence the appellant has filed this appeal.

Issue –

• Whether the appellant is liable for interest and penalties?

Order –

• The Tribunal held that as per the section 69 and section 70 of the Finance Act,1994, appellant has been registered with the department and has been filing returns.
• When it stopped paying service tax under TTA, it had written a letter to the department. Therefore, the department cannot alleged that the appellant is guilty of fraud or collusion or wilful suppression or violation of the act with an intent to evade payment of service tax.
• Once the department accepted that these are ‘mining services’, it cannot simultaneously, classify them as under TTA services.
• For all the above reasons, the appeal is allowed.