By TIOL News Service

MUMBAI, MAY 11, 2017: THIS is a Revenue appeal against an o-in-a passed by the Commissioner of Central Excise & Customs (Appeals), Nagpur.

The issue is whether the activity undertaken by the respondent of transportation of dumping of waste material and dozing and leveling in the factory premises of M/s Sunflag Iron and Steel Co. Ltd. will fall under the category of "Site Formation, Excavation and Clearance Service" during the period 2005-06 to 2009-10.

The demand was confirmed, however, on appeal, by an elaborate order, the Commissioner(A) set aside the adjudication order.

As mentioned, Revenue is in appeal before the CESTAT.

The Bench observed that there is no merit in the arguments put forth by the Revenue inasmuch as upon a reading of the definition of the alleged service, the activity undertaken by respondent will not fall under any of the categories mentioned therein.

Noting that the first appellate authority has correctly set aside the order-in-original by appreciation of the factual matrix, the CESTAT proceeded to extract the said findings which reads -

"10.0 The main issue to be decided in this appeal is whether the Appellant is liable to pay service tax on the activities of transportation and dumping of materials performed by them in the factory premises of M/s Sunflag Ltd, under Site Formation and Clearance Services. The Appellant had performed these activities in the factory premises of M/s Sunflag in the year 2009-10. I find that the Lower Authority has discussed this issue elaborately in the Order-in-Original and has confirmed the demand relying upon the work orders Nos. SF/PROJ/MILL/5104 & SF/PROJ/MILL/5107, both dated 31/08/2009, of M/s Sunflag Iron & Steel Ltd awarding the work to the appellant and on the basis of the statement of Shri Pravin Agrawal dated 30.09.2010. In the said statement the Appellant had stated that the service tax was not paid as, it was not billed by them and has assured to make the payment of the tax. However I find that the Lower Authority has not considered the clarificatory letters dated 10/11/2010 and 03/02/2011 of M/s Sunflag Ltd, submitted by the Appellant in their reply to the SCN. In these letters it has been stated that the work order was for transportation and dumping of waste material within the plant premise and the work order does not include 'dozing & levelling' activities. I find that these letters are a continuum to the work orders mentioned ibid and hence a part of the work orders itself. I find that the non-cognizance of these letters issued by M/s. Sunflag to be an incomplete interpretation of the work orders by the Lower Authority, given the fact that a clarification issued subsequently to a work order is also a part of the work order itself and therefore cannot be summarily ignored. The appellant's counsel submitted copies of these letters during the personal hearing, which reassures due consideration as further evidence in their appeal. Considering the above evidence, I find the contention of the Appellant that the activities performed by them within the factory premises of M/s Sunflag, was restricted to 'transportation and dumping of waste material' only to be true. In the absence of 'dozing and leveling activities', I find that the services rendered by the appellant would not constitute 'Site Formation and Clearance Services' ".

Holding that the said findings are very clear and do not require any interference, the Revenue appeal was rejected as devoid of merits.

(See 2017-TIOL-1584-CESTAT-MUM)