As the matter is pending before the Apex Court for adjudication, whether service tax is leviable on the royalty collected from the Petitioner for winning of minerals and, as such, an interim order has been passed by the Apex Court to that extent, it is open to the Petitioner to bring all these facts before the appellate forum by filing interlocutory application seeking waiver of pre deposit of the amount for entertaining the appeal.
Service Tax on Royalty — The petitioner assailed the legality of imposition of service tax on royalty and allied charges paid by the Petitioner on the minerals extracted by it by virtue of granting of mining lease by the Government. The Petitioner is a lessee of iron ore mines in the State of Odisha and it has been removing ores from the mines for sale or consumption and paying royalty. The respondent alleged that grant of right to mine is a service rendered to the Petitioner by the Government of Odisha in terms of Section 66D effective from 1st April, 2016 read with circular No.192/02/2016-ST dated 13th April, 2016. A show-cause notice was issued on 11th April, 2019 under Section 73(1) of Finance Act. The adjudicating authority passed adjudication order on 27th February, 2020 confirming the Service Tax dues. The counsel for the Petitioner contended that the Petitioner is not liable to pay the service tax, as the same is imposable on the provision of service by the service provider to the service recipient. Further royalty is not a payment in respect of any taxable service. The question of mining royalty whether a tax or not is pending before the larger Bench of Nine Judges of the Hon’ble Apex Court in the case of Mineral Area Development Authority v. Steel Authority of India, (2011) 4 SCC 450. Hon’ble Apex Court in the case of India Cement Ltd. v. State of Tamil Nadu, (1990) 1 SCC 12 already held that mining royalty is a tax. The Petitioner has no objection to approach the appropriate forum under the provisions of law, but the pre-condition of entertaining the appeal is to deposit 7.5% of the demanded amount, which will cause prejudice to the Petitioner. The court observed that as the matter is pending before the Apex Court for adjudication.
Held that:- The Hon’ble High Court held that it is open to the Petitioner to bring all these facts before the appellate forum by filing interlocutory application seeking waiver of predeposit of the amount for entertaining the appeal. If such application is filed, the appellate authority shall consider the same taking into consideration the orders passed by the Apex Court and pass appropriate order in accordance with law.
As the matter is pending before the Apex Court for adjudication, whether service tax is leviable on the royalty collected from the Petitioner for winning of minerals and, as such, an interim order has been passed by the Apex Court to that extent, it is open to the Petitioner to bring all these facts before the appellate forum by filing interlocutory application seeking waiver of pre deposit of the amount for entertaining the appeal.
Service Tax on Royalty — The petitioner assailed the legality of imposition of service tax on royalty and allied charges paid by the Petitioner on the minerals extracted by it by virtue of granting of mining lease by the Government. The Petitioner is a lessee of iron ore mines in the State of Odisha and it has been removing ores from the mines for sale or consumption and paying royalty. The respondent alleged that grant of right to mine is a service rendered to the Petitioner by the Government of Odisha in terms of Section 66D effective from 1st April, 2016 read with circular No.192/02/2016-ST dated 13th April, 2016. A show-cause notice was issued on 11th April, 2019 under Section 73(1) of Finance Act. The adjudicating authority passed adjudication order on 27th February, 2020 confirming the Service Tax dues. The counsel for the Petitioner contended that the Petitioner is not liable to pay the service tax, as the same is imposable on the provision of service by the service provider to the service recipient. Further royalty is not a payment in respect of any taxable service. The question of mining royalty whether a tax or not is pending before the larger Bench of Nine Judges of the Hon’ble Apex Court in the case of Mineral Area Development Authority v. Steel Authority of India, (2011) 4 SCC 450. Hon’ble Apex Court in the case of India Cement Ltd. v. State of Tamil Nadu, (1990) 1 SCC 12 already held that mining royalty is a tax. The Petitioner has no objection to approach the appropriate forum under the provisions of law, but the pre-condition of entertaining the appeal is to deposit 7.5% of the demanded amount, which will cause prejudice to the Petitioner. The court observed that as the matter is pending before the Apex Court for adjudication.
Held that:- The Hon’ble High Court held that it is open to the Petitioner to bring all these facts before the appellate forum by filing interlocutory application seeking waiver of predeposit of the amount for entertaining the appeal. If such application is filed, the appellate authority shall consider the same taking into consideration the orders passed by the Apex Court and pass appropriate order in accordance with law.