Custom, Excise & Service Tax Tribunal
South Eastern Coalfields Limited vs Commissioner Of Customs Central Excise ... on 9 January, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. 4
E-HEARING
Service Tax Appeal No. 50783 of 2024
(Arising out of Order-in-Original No. 01/PR.COMMR/ST/IND/2023-24 dated
27.09.2023 passed by the Pr. Commissioner, CGST & Central Excise, Indore)
South Eastern Coalfields Limited Appellant
SECL Bhawan, Tax Cell, Room No. 3203,
Seepat Road, Sarkanda, Bilaspur,
Chhattisgarh-495006.
Versus
Pr. Commissioner, CGST, Customs & Respondent
Central Excise, Indore GST Bhawan, Manik Bagh Palace, Indore-452014 (MP) Appearance:
Present for the Appellant: Shri Sanjay Dixit, Advocate Present for the Respondent: Ms. Jaya Kumari, Authorized Representative CORAM:
Hon'ble Dr. Rachna Gupta, Member (Judicial) Hon'ble Ms. Hemambika R. Priya, Member (Technical) Date of Hearing/Decision : 09/01/2025 Final Order No. 50054/2025 Dr. Rachna Gupta:
The appellant herein is a public sector undertaking of Government of India. 10 mining areas fall in the state of Chhattisgarh with respect to which appellant is registered with Raipur service tax commissionerate. The said mining areas have both Opencast Mines as well as the Underground Mines. Department got an intelligence that some of the mines of the appellant were collecting Silo Loading Charges over and above the 2 ST/50783/2024 price of the coal. Department formed an opinion that these charges were associated with the mode and method of loading of coal in railway wagons and that it did not have any relevance with the coal that was being transported in trucks. The loading facilities at the mines consisting of Silos with electronically controlled mechanized and Automated coal dispensing system at the loading (pit head point) suitably adapted to the MGCR System was found owned by the appellant themselves.
2. The department formed an opinion that the charges received by the appellant were attributable to the taxable service classified as cargo handling service defined under Section 65(23) of Finance Act, 1994 and were made taxable with effect from 16.08.2002. Department observed that during the period 2008-2009 to 2012- 2013, the appellant had recovered an amount of Rs. 179,14,14,961/- on account of „Silo Loading Charges‟.
3. Based on the above observations a show cause notice No. 15- 272/2013 dated 21.10.2013 was served upon the appellant proposing the recovery of service tax on the said amount, amounting to Rs. 198561673/- along with the proportionate interest in terms of Section 75 of the Finance Act, 1994 and the proposal of imposing penalties under Section 76, 77 and 78 of the Act. The said proposal was confirmed vide the order in original No. 01/2023-24 dated 29.07.2023. Being aggrieved, the appellant is before this Tribunal.
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ST/50783/2024
4. We have heard Shri Sanjay Dixit, learned counsel for the appellant and Ms. Jaya Kumari, learned Departmental Representative for Revenue.
5. Learned counsel for the appellant has submitted that the appellants are the subsidiary company of Coal India Ltd. and are engaged in the business of mining and selling of coal at the mines located in the State Madhya Pradesh and Chhattisgarh. The base price of coal known as "Pithead Price" in relation to declared grade of coal produced by SECL is notified by Coal India Ltd. through issue of price notification from time to time. The appellant had entered into coal supply agreement with various companies according to which coal is sold either at Pithead when the same is buyer‟s carriers on the railway wagon at the railway siding within the premises of the appellant at the prices notified by Coal India Ltd. from time to time. Except that additional charges @ Rs. 18/- per tone or Rs. 20/- per ton as were applicable during the period April 2008 to March 2013 is levied for such loading and have been referred as Silo Loading Charges. It is submitted that those charges are wrongly alleged to be the consideration for rendering the taxable service of Cargo Handling Service. Learned counsel has submitted that issue is no more res integra as it stands decided by this Tribunal in the case titled as Commissioner of Central Excise & Service Tax, BBSR-I Vs. Mahanadi Coal Fields Ltd. vide Final Order No. 76585 of 2017 dated 21.08.2017.
6. Learned Departmental Representative has acknowledged the same that the „Silo Loading Charges‟ have already been held to not to be charges towards taxable service. It has also been 4 ST/50783/2024 acknowledged that appellants have been paying VAT on those charges.
7. In view of these submissions and observing that the decision in the case of Mahanadi Coal Fields Ltd (supra) covers the impugned issue and that it has subsequently been followed by this Tribunal in a bunch of several appeals vide Final Order No. 52991-52920 /2018 dated 31.08.2018 and also in appellant‟s own case vide Final Order No. 50878/2018 dated 22.02.2018 wherein it has been held as follows:
"4. After hearing both the parties it appears that the appellants had paid the sales tax/vat and total amount of sale includes crushing charges as well as other charges e.g. silo loading charges and the same was shown in the profit and loss account. The Hon ble Supreme Court in the case of Bharat Sanchar Nigam Ltd. Vs. UOI reported in 2006 (2) STR 161 (SC) observed that sales tax and service tax cannot be made applicable on the same transaction as the same is includible to each other
8. In view of the said decisions and the acknowledgement thereof on the part of the department and also finding no difference in the facts of the present case, we have no reason to differ from these findings. Resultantly, the order under challenge is hereby set aside. Consequent thereto, the appeal is allowed.
(Dictated & pronounced in open Court) (Dr. Rachna Gupta) Member (Judicial) (Hemambika R. Priya) Member (Technical)