Page 127 - GSTL_7th May 2020_Vol 36_Part 1

2020 ] GLOBAL COAL & MINING PVT. LTD. v. COMMISSIONER OF SERVICE TAX, DELHI 85
therefrom, of coke is carried on. Similar definition is appearing in Section
2(g)(x) of the Coal Mines (Taking Over of Management) Act, 1973. The Cok-
ing Coal Mines (Emergency Provisions) Act, 1971 has also defined ‘mine’ in
similar manner. In all the enactments relating to coal mining, washing of coal has
been treated as part of the mining activity. As laymen we tend to think that
mining means only digging deep into the earth and extracting the minerals.
However, in the statutory provisions the definition of mining appears to be
very wide. In the Colliery Control Order Section 2(c) defines ‘Colliery’.
‘Colliery’ means any mine or open working where winning or extraction of
coal is the principal object of the mining, quarrying or any other operation
carried on therein, and includes a plant for the production of coke or for the
washing of coal. When the ash content of the coal is very high, the quality is
poor. The Mines and Minerals (Development and Regulation) Act, 1957 in
the Second Schedule gives the different gradations of coal. Among the gra-
dation, washery grade is clearly indicated. From all this, it is clear that wash-
ing of coal is also a part of mining activity.
15. -------------
16. Once it is established that the activity of the appellant is mining, it cannot be
taxed under the Business Auxiliary Service for the period prior to 1-6-2007. Even
when we examine the definition of business auxiliary service, it is seen that
production which does not amount to manufacture comes under business
auxiliary service. The beneficiation of coal does not amount to production
of coal because beneficiation is a process, which enhances the quality of the
coal. However, in the definition of business auxiliary service, an amend-
ment was carried out to include process also w.e.f. 16-6-2005. The appellant
has made an alternative submission that if the activity carried out by them
is not considered as mining activity the demand can be sustained only from
16-6-2005 to 31-8-2005 only. There are sufficient grounds to hold that the ac-
tivities carried out by the appellant amounts to mining service. When such
a view is taken, the appellant would not at all be liable to Service Tax for a
period prior to 1-6-2007.
(emphasis supplied)
17. The Division Benches of the Tribunal in Aryan Coal and Spectrum
Coal took the same view after following the decision of the Tribunal in Aryan En-
ergy.
18. In this connection it will also be pertinent to refer to the decision of
the Bombay High Court in Indian National Shipowners’ Association v. Union of In-
dia. - 2009 (14) S.T.R. 289 (Bom.). It was held that introduction of a new entry and
inclusion of certain services in that entry would pre-suppose that there was no
earlier entry covering the said services. It was also observed that creation of the
new entry was not by way of amending the earlier entry and it was not carved
out of any earlier entry. The relevant portion of the judgment of the Bombay
High Court is reproduced below :-
37. Entry (zzzzj) is entirely a new entry. Whereas entry (zzzy) covers ser-
vices provided to any person in relation to mining of mineral, oil or gas,
services covered by entry (zzzzj) can be identified by the presence of two
characteristics namely (a) supply of tangible goods including machinery,
equipment and appliances for use, (b) there is no transfer of right of posses-
sion and effective control of such machinery, equipment and appliances.
According to the members of the 1st petitioner, they supply offshore sup-
port vessels to carry out jobs like anchor handling, towing of vessels, sup-
ply to rig or platform, diving support, fire fighting etc. Their marine con-
struction barges support offshore construction, provide accommodation,
GST LAW TIMES  7th May 2020  127