F.No. 232/2/2006-Cx.4

Rupee hits a new low of 54.82 against Dollar IPL Bangalore Team Player Luke Pomersback arrested by Delhi Police Shahrukh Khan banned for 5 years from entering in Wankhede Stadium CBI raids 15 MLAs in Jharkhand for taking bribe in Rajya Sabha elections Rajya Sabha passes Finance Bill 2012 Petrol & Diesel prices to be hiked Yeddy applies for bail after CBI raids on his residence Income Tax Officer SK Saini sentenced to 3 years RI + fine of Rs 35 Lakh by CBI Court in Bhopal IRS Officer Brahmananda Reddy arrested by CBI Founder of Matrix Laboratories Nimmagadda Prasad also arrested by CBI Tariff Value for import of Brass scrap is 4362 & for poppy seeds 3680-for gold 507 per 10 gram & for silver 920 per kg-Customs Non-Tariff Notification No.42 Customs duty exempted on import of 191 Products from Singapore-Customs Tariff Notification No.33 Import of 485 Products from Singapore exempted from Customs duty-Customs Tariff Notification No.34 Import of 496 Products from Singapore exempted from 50 per cent of applied rate of duty-Customs Tariff Notification No.35 Saurabh Chandra gets additional charge of Commerce Secretary ITAT Member N Vasudevan transferred from Mumbai to Bangalore-J Sudhakar Reddy moves from Mumbai to Delhi-IP Bansal from Delhi to Mumbai-IC Sudhir from Pune to Delhi CVD on imported electronics lowered due to higher rates of abatement from RSP notified-Abatement from MRP for excise payment on all electronic products prescribed at uniform rate of 35 per cent-Abatement revised for several products-Central Excise Non-Tariff Notification No.26 Suppliers to Mega Power Projects face silly excise demands-Click on the link below for full details Excise demand of Rs 32 Crore confirmed against Exide for not paying excise on MRP basis on lead acid storage battery RBI says Exporters required to convert 50 per cent of their foreign exchange holdings into Rupee within 15 days-Exporters will be allowed to buy foreign currency only after utilizing all their foreign currency holdings Articles of jewellery exempted from excise duty-Specified Railway Goods manufactured by Government exempted from excise -Central Excise Tariff Notification No.23 Excise on specified Petroleum Oils lowered Eye makeup preparations exempted from excise The excise exemption hitherto admissible on all Hawai Chappals will now be admissible to only Hawai Chappals of RSP up to Rs 500-Polyester staple fibre or polyester filament yarn, manufactured from plastic scrap or plastic waste including waste polyethylene terephthalate bottles exempted from excise-Excise on Motor chassis for vehicles lowered to 14 per cent excise-Excise on LED Lights of Chapter 85 lowered to 6 per cent-Inks for ball point pens exempted from excise-Central Excise Tariff Notification No.24-Parts of Footwear and hawai chappals of RSP not exceeding Rs. 500 per pair exempted from excise if consumed in factory-Central Excise Tariff Notification No.25-Excise exemption to goods required for initial setting up of solar power generation project or facility-Central Excise Tariff Notification No.26 CENVAT Credit (Fifth Amendment) Rules, 2012-No reversal of credit required for supplies made for setting up of solar power generation projects or facilities-Central Excise Non-Tariff Notification No.25 exemption from wholeof the additional duty leviable shall not apply to Hand held Metal/Mine/Bomb detectors etc.-Customs Tariff Notification No.30 Import of specified goods allowed at concessional rate of duty-Customs Notification No.31 Lok Sabha passes Finance Bill 2012 FM defers the applicability of GAAR provisions by one year- GAAR provisions will now apply to income of Financial Year 2013-14 and subsequent years-The retrospective clarificatory amendments now under consideration of Parliament will not be used to reopen any cases where assessment orders have already been finalized-long term capital gain arising from sale of unlisted securities in case of non-resident investors, including PE investors lowered to 10 per cent-FM extends benefit of tax exemption on long term capital gains to sale of unlisted securities in IPO-lower rate of withholding tax of 5% for funding all businesses-FM withdraws the provision for levy of TDS on transfer of immovable property-FM raises the threshold limit for TCS on cash purchases of jewellery to Rs.5 lakh-only serious offences under the customs law involving prohibited goods or duty evasion exceeding Rs.50 lakh, shall be cognizable- all these offences shall be bailable-changes in the definition of “service” which will exclude the activities specified in the Constitution as “deemed sale of goods”-The definition of “works contract” also enlarged to include movable properties- Exemption for specified services relating to agriculture in the Negative List extended to agricultural produce enlarging the scope of the entry Anti-dumping duty on imports of Partially Oriented Yarn, originating in, or exported from China-Customs Notification No.22 Customs duty on import of 806 Products from Japan lowered Anti-dumping duty imposed on import of Phosphoric Acid of all grades and all concentrations (excluding Agriculture/FertilizerGrade) , falling under tariff item 28092010, originating in, or exported from,Israel and Taiwan-Customs Tariff Notification No.19 Customs duty on import of composite fertiliser lowered to 1 per cent-Customs Tariff Notification No. 24

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F.No. 232/2/2006-Cx.4

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs

New Delhi, dated the 12th November, 2007

To,
The Chief Commissioners of Central Excise and Service Tax (All)
Director General (Service Tax)
Director General (Central Excise Intelligence)

Madam/Sir.

Subject : Applicability of service tax on activities undertaken at mines prior to enactment of the Finance Bill, 2007 – reg.

It may be recalled that vide appropriate entry in the Finance Act, 2007, 'service provided by any person to any other person in relation to mining of minerals, oil or gas' has been comprehensively brought under the ambit of service tax with effect from 1.6.2007. However, for the prior period, certain disputes relating to chargeability of service tax on some of the services provided to mining sector were reported. In this regard, a draft circular dated 9.10.06 was put up on the official web-site, soliciting response from the stakeholders. The responses received have since been examined.

02. The mining sector (such as the coal mines, mining of ores, etc.) mainly receive the following types of services, mostly on contract basis:-

(i) Excavation/drilling and removal of the overburdens (i.e. stratum, layer of mud, boulders, etc, that needs to be removed during or prior to extraction of coal/minerals).

(ii) Coal cutting or mineral extraction and lifting them up to the pithead.

(iii) Handling and transportation of coal/mineral from pithead to a specified location within the mine/factory or for transportation outside the mines.

03. Excavation/drilling and removal of the overburdens :

These activities are essentially in the nature of site formation, clearance, escavation and earth moving. As clarified earlier vide circular B1/6/2005-TRU dated 27.07.2005 (para 6.2)), the definition of site formation and clearance, excavation and earthmoving and demolition service is an inclusive definition and activities specifically mentioned are indicative and not exhaustive. Prior to construction of buildings, factory or any civil structure, activity of mining or clearance, excavation and earth moving or levelling are normally undertaken for a consideration to make the land suitable for such activities. Such services include blasting and rock removal work, clearance of underground, drilling and boring, overburden removal and other development and preparation services of mineral properties and site, and other similar excavating and earth moving services. Hence, these activities are taxable under the category of site formation and clearance, excavation and earthmoving and demolition service w.e.f. 16.6.2005.

04. Coal cutting or mineral extraction and lifting them up to the pithead:

These activities are essential integral processes and are part of mining operations. As stated earlier, mining activity has been made taxable by legislation under the Finance Act, 2007 ( w.e.f.01.06.2007). Prior to this date, such activities, being part of mining operations itself are not subjected to service tax. Therefore, no service tax is leviable on such activities prior to the said date.

05. Handling and transportation of coal/mineral from pithead to a specified location within the mine/factory or for transportation outside the mine:

These activities are post-mining activities and are chargeable to service tax under the relevant taxable services, i.e., "Cargo Handling service" and "Goods Transport by Road". However, in case, such transportation is undertaken by mechanical systems, such as conveyor belt system, ropeway system, merry-go-round systems etc., and the same is not transported by road, no service tax would be chargeable. Service tax is, however, chargeable under cargo handling service, even if the loading, unloading and similar activities are done using mechanical systems.

06. The above are the general guidelines for settlement of pending disputes. These should be applied to individual cases keeping in view the facts and circumstances of each case.

07. The pending cases may be resolved expeditiously.

Yours faithfully,

(Gautam Bhattacharya)
Commissioner (Service Tax)