The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), New Delhi, has upheld the denial of refund claims exceeding ₹28 lakh related to service tax paid on limestone mining transactions. The Tribunal ruled that the services rendered under a joint venture mining arrangement could not be classified as “self-service” and were therefore subject to taxation under the Finance Act, 1994.
The case revolved around two appeals challenging orders by the Commissioner (Appeals), CGST, Udaipur and Jodhpur, rejecting refund claims of ₹6.95 lakh and ₹21.13 lakh respectively. The appellant had entered into an agreement with a state-run mining corporation to extract limestone and argued that the tax paid was not legally due, as the arrangement constituted services rendered within a joint venture, and thus not taxable.
The Tribunal affirmed that the mining corporation and the appellant, despite being co-promoters in a joint venture, were distinct legal entities. Therefore, the mining services provided for consideration were taxable under Section 65B(44) of the Finance Act, 1994. The claim that no tax was due due to the joint venture nature of the relationship was rejected. The Tribunal cited the CBEC circular and legal precedents to support the view that joint ventures and their members must be treated as separate taxable persons.
The tribunal noted that appellant failed to correlate the refund amount with the service tax actually paid and deposited. The Tribunal found no verifiable link between the debit notes, payment challans, and the service returns filed. A portion of the refund claim, amounting to ₹7.26 lakh, was found to be filed beyond the permissible one-year limit and was dismissed as time-barred under Section 11B of the Central Excise Act, 1944.
The Tribunal noted that the appellant had not demonstrated that the tax burden was not passed on to end buyers, thereby invoking the principle of unjust enrichment.
Dismissing both appeals, the Tribunal concluded that the service tax paid on the mining activity was validly levied and that no refund was warranted. The decision reinforces key legal principles surrounding the taxability of services in joint venture arrangements and the need for robust documentation in refund claims.
Case Details
Case Title: M/s. Mayur Inorganics Limited Versus Commissioner of CGST & Central Excise-Jodhpur
Case No.: Service Tax Appeal No. 53035 of 2018
Date: 25.07.2025
Counsel For Appellant: Om.P. Agarwal
Counsel For Respondent: Shashank Yadav
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