J.P. Devadhar JUDGMENT
Ranjana Prakash Desai, J.
1. The 1st petitioner is the Indian National Ship Owners' Association which is registered as a nonprofit making company under Section 25 of the Companies Act, 1956. Members of the 1st petitioner are owners of Indian Flag Vessels. The Shipping Corporation of India (SCI) is one of its members. The 2nd petitioner is also a member of the 1st petitioner. He is a shareholder of a Member Company of the 1st petitioner.
2. The 1st respondent is the nodal Ministry in-charge of all matters and policies relating to Revenue. Respondent 2 is an apex body functioning under the control of respondent 1 that regulates all policy decisions relating to Central Excise, Customs and Service Tax matters. One of the functions of the 2nd respondent is to issue clarifications under Section 378 of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. Respondent 3 is the Commissioner of Service Tax and Respondent 4 is the Additional Commissioner (Technical) Service Tax, Mumbai. The 5th respondent is M/s. Oil & Natural Gas Co. Ltd. ("ONGC" for short). It is an instrumentality of State and has entered into various contracts with the members of the 1st petitioner.
3. Before we go to the facts of the case and the challenge raised in this petition, it is necessary to see the legal provisions and various circulars which have relevance to the present case.
4. In 1994 Chapter V of the Finance Act, 1994 was enacted in order to tax services rendered by service providers in India. Each year more and more services have been made taxable.
5. Section 65(105) defines taxable service to mean any service provided or to be provided as enumerated in the subclauses therein. Section 66 of the Finance Act,1994 is the charging section which says that services referred to in subclauses of clause 105 of Section 65 are taxable as per the rates stated therein. Section 68(1) places the duty of paying service tax on the service providers.
6. The Finance Act 1994 requires the service provider to register himself and to self-assess service tax payable by him. The manner of payment of service tax is laid down in the Service Tax Rules, 1994. The service tax provider is entitled to recover the service tax from the service consumer.
7. Entry (zzzy) was inserted into Section 65(105) of the Finance Act, 1994 by the Finance Act, 2007. The said entry reads as under:
Any service provided or to be provided to any person by any other person in relation to mining of mineral, oil or gas
8. By Circular No. 334/1/2007-TRU : MANU/CUST/0053/20 (Letter D.O.F. No.) dated 28/2/07 respondent 1 clarified that the different entries relating to mining activities were being consolidated under the said entry. We may quote the relevant portion of the said circular:
6.2. Mining Service (section 65(105)(zzzy)): Presently, geological, geophysical or other prospecting, surface or sub-surface surve........