Custom, Excise & Service Tax Tribunal
Niranjan Lal Agrawal vs Raipur on 30 October, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. - IV
Service Tax Appeal No. 54165 of 2018
[Arising out of Order-in-Original No. RPR/EXCUS/000/COM/CEX/042/2018 dated
21.03.2018 passed by the Principal Commissioner of Central Tax, Central Excise
& Customs, Raipur]
M/s. Niranjan Lal Agrawal ...Appellant
(Proprietor Shri Raj Agrawal),
Gupta Gali, Tulsi Marg, Korba,
Chhattisgarh - 495678
VERSUS
Commissioner of Central Excise
and Service Tax, Raipur ...Respondent
Central GST Building, Tikrapara, Raipur, Chhatisgarh - 492001 APPEARANCE:
Shri Krishna K Menon, Ms. Prerna Jain Kala and Ms. Parul Sachdeva, Advocates for the Appellant Shri Anand Narayan, Authorized Representative for the Respondent CORAM:
HON'BLE DR. RACHNA GUPTA, MEMBER (JUDICIAL) HON'BLE MRS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) DATE OF HEARING: 30.09.2025 DATE OF DECISION: 30.10.2025 FINAL ORDER NO. 51636/2025 DR. RACHNA GUPTA M/s. Niranjan Lal Agrawal, (Proprietor Shri Raj Agrawal), herein after referred to as the appellant, is engaged in providing Mining Services (services in mines area) to M/s. South Eastern coalfields Limited (SECL), Bilaspur having Service Tax Registration BLEPA2958MSD002 for payment of service tax. DGCEI, Zonal Unit, Bhopal got intelligence that the appellant had not paid service tax though they had collected the same from M/s. SECL. Search was conducted at the office premises of the appellant on 22.06.2016. Certain incriminating documents were recovered and seized by the 2 officers for further investigation. The search proceedings were recorded in the Panchnama dated 22.06.2016. Investigations have revealed that the appellant had transferred coal into tippers and then transported said coal to railway siding. It is alleged that such services fall under the category of Mining Services which are not covered under negative list. But the appellant had not paid service tax rather had incorrectly presented their services as Goods Transport Agency (GTA) services in 8 bills issued by them between 17.10.2013 to 14.05.2014. Due to this misrepresentation of the bills, service tax pertaining to these bills got paid by SECL under reverse charge mechanism by availing abatement of 75%. For bill no. 9dated 14.06.2014 to bill no. 32 dated 03.08.2016, service tax was collected by the appellant from SECL at full rate treating the same services as Mining Services but no service tax was paid by the appellant.
1.1 It was found that appellant had provided Mining services to M/s. SECL of gross value of Rs.19,88,38,757/- during the period from October 2013 to August 2016 on which the service tax payable amounts to Rs.2,59,74,273/-. However, the appellant had paid only Rs.17,63,345/-. With these observations, the Show Cause Notice (SCN) No. 27/2017 dated 25.07.2017 was served upon the appellant proposing recovery of service tax of Rs.2,42,10,928/- along with interest and penalties. Since the appellant had also failed to file ST-returns that suppression of facts was alleged and extended period for issuing show cause notice was invoked. The proposal has been confirmed vide Order-in-Original 3 No.042/2018 dated 21.03.2018. Being aggrieved, the appellant is before this Tribunal.
2. We have heard Shri Krishna K Menon, Ms. Prerna Jain Kala and Ms. Parul Sachdeva, learned Advocates for the appellant and Shri Anand Narayan, learned Authorized Representative for the respondent.
3. Learned counsel for the appellant has submitted that the work orders awarded to the appellant were merely for the transportation of coal through tippers. That loading and unloading are merely an incidental activity to the said transportation. Because of the said incidental activity, the services as that of 'Goods Transport Agency' cannot be called as Mining of Mineral, Oil or Gas. The findings at Para 3.4.1 are contrary to the facts of the present case. The Adjudicating Authority vide the impugned order has held that the activities undertaken by the appellant with respect to the disputed work order was a composite one and no consignment notes were issued. It is pertinent to mention that the aforesaid finding of fact regarding non-issuance of the consignment note by the appellant is perverse and contrary to facts on record. The appellant has been issuing consignment notes for transporting the goods. That for Identical contracts the law stands settled and the issue is no more res-integra. Learned counsel has relied upon the following decisions:
(i) Sarvmangla Construction Co. Vs. Commissioner of Central Excise & Service Tax, Raipur reported as 2018 (12) GSTL 33 (Tri.-Del.) 4
(ii) Arjuna Carriers Private Limited Vs. CCE reported as 2014-TIOL-3098-CESTAT-DEL 3.1 In addition, it is submitted that relevancy of Statements-
Procedure prescribed u/s 9D not followed. Reliance in this regard is place upon the following decisions:
(i) M/s. Surya Wires Pvt Ltd Vs. Principal Commissioner, CGST 2025-TIOL-736-CESTAT- DEL
(ii) Punjab & Haryana High Court in the case of G-Tech Industries Vs. Union of India reported as 2016 (339) ELT 209 (P&H)
(iii) Anjani Steel Ltd. Vs. Commissioner of Central Excise & Service Tax reported as 2022-TIOL-947-CESTAT-DEL.
(iv) GTC Industries Ltd. Vs. Collector of Central Excise reported as 2023 (384) ELT 239 (SC)
(v) Jindal Drugs Pvt. Ltd. Vs. Union of India reported as 2016 (340) ELT 67 (P&H)
(vi) Goyal Tobacco Co. Pvt Ltd Vs. VVE & ST, Jaipur reported as (348) ELT 720 (Tri-Del)
(vii) Manek Chemicals Pvt Ltd Vs. Union of India reported as 2016 (334) ELT 302 (Guj)
(viii) J.K. Cigarettes Ltd. Vs. CCE reported as 2009 (242) ELT 189 (Del.) 3.2 It is also submitted that demand of Section 73A demand of Finance Act has been dropped in Order-in-Original bus has not been challenged by the department. Computation of demand is incorrect. Demand is also time barred. With these submissions, the impugned order is prayed to be set aside and appeal is prayed to be allowed.
4. While rebutting these submissions, learned Departmental Representative has reiterated the findings of the impugned order. 5 It is submitted that as per description of activity mentioned in the work order dated 03.10.2013, the appellant was required to deploy machinery for mechanical transfer of coal into tippers and then coal was required to be transported to SECL's designated railway siding. The activities performed by the appellant is a composite one i.e. first to transfer the excavated coal into tippers by mechanical means and then to transport the tipper to the destination which is performed in furtherance of a contractual obligation. The appellant had not issued any consignment notes for undertaking the activity within their mining area so they are not covered under the definition of GTA under Section 65B(26) of Finance Act, 1994. The activity carried out by the appellant is covered under the definition of "taxable service' and is neither covered under Negative list under Section 66D nor exempted under Mega Exemption Notification No. 25/2012-ST dated 20.06.2012 or any other exemption notification. 4.1 The Appellant is already registered with Service Tax Department and had initially raised Bill No. 01 to 08 to M/s. SECL, wrongly presenting themselves as a "Goods Transport Agency". However, they had actually provided services classifiable as "other than negative services". In the remaining Bills from 09 to 32, the appellant had correctly charged full rate of service tax by treating their services as "other than negative service". Thus, the appellant have changed the treatment of their service to that of 'Goods transport agency' from that of "other than negative service" (mining service). The appellants have charged and collected service tax of Rs. 2,07,66,366/- at full rate from SECL under the head "Other than negative service (mining service), however, they have neither 6 filed ST-3 returns nor remitted the Service Tax so collected to the Government Account. The appellant in his statement dated 07.10.2016 has admitted to have received payment of service tax amounting to Rs.2,07,66,367/- from M/s. SECL upto 03.08.2016. Further M/s. SECL has also issued a statement in respect of payments made to the Appellant which includes Service Tax to Rs.2,07,66,367/-. The Adjudicating Authority at Para 3.4.2 of Order-in-Original found that these facts have been admitted by the appellant in their reply and have not been disputed that the services rendered by them are categorized under "other than negative services (mining services)/Services" in the present case. Hence the liability has rightly been confirmed 4.2 With regard to invocation of extended period of limitation and imposition of penalty under Section 78 of the Finance Act, 1994, it is submitted that the appellant was fully aware about its service tax liability as were registered with the department and has also charged and collected service tax from the customer. It is evident that the appellant had suppressed the value of taxable services and resorted to evasion of service tax by deliberate violation of various provisions of law to evade payment of Service Tax. The appellant was under the statutory obligation to arrive at the correct and appropriate value and pay service tax accordingly, which they failed to pay to avail wrongful gain. So, the ingredients of willful misstatement or suppression of facts made thereunder with intent to evade payment of Service Tax are present in the instant case. Hence the extended period has rightly been invoked. With these submissions, appeal is prayed to be dismissed. 7
5. Having heard the rival contentions and perusing the records, it is observed and held as follows:
5.1 The entire case hinges on the issue whether services of transporting coal through tippers to railway sidings are to be classified under 'Mining of Mineral, Oil or Gas Services' or under 'Goods Transport Agency'.
To appreciate the contentions here, we foremost have perused the definition of GTA services as defined under Section 65(50b) of the ct. Relevant extract is as follows:
"65(50b)-'goods transport agency' means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called."
Two conditions are to be fulfilled for one to be called as Goods Transport Agency:
(i) Transport of goods by road
(ii) Issuance of consignment notes
There is an admission vis-à-vis first condition. Second
condition i.e. issuance of consignment note is denied by the adjudicating authorities below but it has been the submission of appellant since beginning that they have been issuing consignment notes. The copy of such notes have also been produced. We hold that both the conditions for being called as Goods Transport Agency stand fulfilled. Hence, the findings under challenge are held to be contrary to the facts on record.
5.2 We observe that issue has several times been adjudicated by this Tribunal. The decision of the Hon'ble Supreme Court in the case of Singh Transporters Vs. Commissioner of Central 8 Excise, Raipur reported as 2012 (27) STR 488 squarely covers this issue. The issue involved therein was whether the coal transported from pitheads of the mines to the railway sidings would fall within the taxable service as defined under Section 65(105)(zzzy). Though the service in question in the said case was whether it was a mining service but the outcome is relevant for the present adjudication wherein it was held that the aforementioned activity is an activity as that of transportation of goods. The Hon'ble Apex Court in the said decision has held as follows:
"3. The issue involved in the present appeal is whether the goods i.e. coal transported by the respondent - Singh Transporters from the pit-heads to the railway sidings would fall within taxable service as defined under Section 65(105) (zzzy) of the Service Tax Act of 1994 (for short "the Act") or as defined under Section 65(105)(zzp) of the Act.
xx xx xx
6. Be that as it may, even if the relied upon judgment in the case of Anjuna Carriers (supra) is of no consequence to the present case, we are of the view that the activity undertaken by the respondent i.e. transportation of coal from the pit-heads to the railway sidings within the mining areas is more appropriately classifiable under Section 65(105)(zzp) of the Act, namely, under the head "transport of goods by road service" and does not involve any service in relation to "mining of mineral, oil or gas" as provided by Section 65(105)(zzzy) of the Act.
7. The reliance placed on the definition of the term 'mines' under Section 2(j) of the Mines Act, 1952 does not assist the Revenue inasmuch as what would be indicated by the said definition is that a mine is not to be understood necessarily in respect of pit-heads of the mining area or the excavation or drilling underground, as may be, but also to the peripheral area on the surface. The said 9 definition has no apparent nexus with the activity undertaken and the service rendered."
5.3 The Kolkata Bench of the Tribunal in the decision of N.C. Paul & Company reported as 2020 (41) GSTL 494 (Tri.-Kol) has held as follows :
"the dominant activities under the contract are movement of mineral within the mining area and loading to Railway Wagon, which includes loading and unloading, are merely incidental while the activities undertaken are principally transportation of coal within the mining area, hence, the gross amount received for the same cannot be taxed under the category of Cargo Handling Services. Therefore, we are of the view that the Service Tax demand of Rs.2,47,60,534/- on activities of transportation with incidental loading and unloading including wagon loading is principally and dominantly for transportation of coal within the mines and hence, cannot be taxed under the category of Cargo Handling Service and accordingly, set aside."
5.4 We note that the Department has, from time to time, issued several circulars clarifying this overlapping of two services with respect to one activity of transporting load through truck tippers. One such clarification dated 06.08.2008 reads as follows:
"3. Issue : GTA provides service to a person in relation to transportation of goods by road in a goods carriage. The service provided is a single composite service which may include various intermediary and ancillary services such as loading/unloading, packing/unpacking, transshipment, temporary warehousing. For the service provided, GTA issues a consignment note and the invoice issued by the GTA for providing the said service includes the value of intermediary and ancillary services. In such a case, whether the intermediary or ancillary activities is to be treated as part of GTA service and the abatement should be extended to the charges for such intermediary or ancillary service?
Clarification: GTA provides a service in relation to transportation of goods by road which is a single composite service. GTA also 10 issues consignment note. The composite service may include various intermediate and ancillary services provided in relation to the principal service of the road transport of goods. Such intermediate and ancillary services may include services like loading/unloading packing/unpacking, transshipment, temporary warehousing, etc., which are provided in the course of transportation by road. These services are not provided as independent activities but are the means for successful provision of the principal service, namely, the transportation of goods by road. The contention that a single composite service should not be broken into its components and classified as separate services is a well accepted principle of classification. As clarified earlier vide F.No. 334/4/2006-TRU, dated 28-2-2006 (Paras 3.2 and 3.3) [2006 (4) S.T.R. C30] and F.No. 334/1/2008-TRU, dated 29-2- 2008 (Paras 3.2 and 3.3) (2008 (9) S.TR. C61], a composite service, even if it consists of more than one service, should be treated as a single service based on the main or principal service and accordingly classified. While taking a view, both the form and substance of the transaction are to be taken into account. The guiding principle is to identify the essential features of the transaction. The method of invoicing does not alter the single composite nature of the service and classification in such cases are based on essential character by applying the principle of classification enumerated in Section 65A. Thus, if any ancillary/intermediate service is provided in relation to transportation of goods, and the charges, if any, for such services are included in the invoice issued by the GTA, and not by any other person, such service would form part of GTA service and, therefore, the abatement of 75% would be available on it."
5.5 We observe that with effect from 01.07.2012, major changes were carried out in the Service tax provisions. Vide Finance Act, 2012 the concept of the Negative List was introduced. In pursuance to these changes classification of services was rendered immaterial. However, we note that in the present show cause notice dated 21.10.2015, the Department has relied upon the provisions applicable prior to 01.07.2012.
115.6 Further, while confirming the Service Tax liability on the appellant, no reference has been made to the new charging Section i.e. Section 66B of the Act applicable from 01.07.2012 in the impugned Order.
5.7 We note that in the Larger Bench decision of the Tribunal rendered in the case of M/s Atma Steels Pvt. Ltd. & Others v. CCE, Chandigarh & Others reported as 1984 (17) ELT 331 (T) it was held that once the provisions has been changed, then the existing provisions at the time of issue of show cause notice should be applicable and not the earlier provisions. 5.8 In the case of M/s Mahakoshal Beverages Pvt. Ltd. Vs Commissioner of Cz. Ex., Belgaum reported as 2007 (6) STR 148 (Tri-Bang) the Tribunal held that demand cannot be confirmed in accordance with deleted provisions.
"4. On a careful consideration, we are not agreeable with the contentions raised by the Commissioner in the written submissions and the learned JDR. The proviso to Section 73 of the Act was promulgated by Finance Act, 2004 but adding proviso to Section 73 of the Central Excise Act, which is parimateria to Section 11A of Central Excise Act. The ingredients of the said proviso have not been invoked in the show cause notice to demand duty for larger period. The contention of the Revenue that the demands pertaining to period earlier to promulgation of the new Section 73 should be confirmed in terms of the deleted provisions of Section 73, is not sustainable. The Larger Bench judgment rendered in the case of Atma steel (supra) has clearly held that once a new provisions has been brought into existence, then at the time of issue of show cause notice the new provisions as is in existence should be complied. The show cause notice has been issued in the present case on 28-7-2005, therefore, the amended provisions in terms of Section 73 of the Finance Act 12 2004 ought to have been invoked. The ingredients of proviso to Section 73 have not been invoked, therefore, the demands are barred by time. Furthermore, as held in the Atma Steel case (supra), the demands for the period earlier to promulgation cannot be confirmed "
6. In the light of above discussions, the order under challenge is hereby set aside and the appeal stands allowed.
[Order pronounced in the open court on 30.10.2025] (DR. RACHNA GUPTA) MEMBER (JUDICIAL) (HEMAMBIKA R. PRIYA) MEMBER (TECHNICAL) HK