Services Related to Construction of Roads to Government Authorities/Agencies: CESTAT Grants Service Tax Exemption [Read Order]

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), granted service tax exemption on services related to construction of roads to Government authorities/agencies.

The appellant, Shree Kankeshwari Enterprise is engaged in providing work contract Services to the State Government, local authority or governmental authority and also to private parties by way of construction of road, bridge, tunnel, ponds or irrigation work, Repairs and Maintenance of civil structure etc.

The appellant is Registered Road contractor with Gujarat Government, providing service for construction/repair of Roads, Repairs and Maintenance of roads, civil structure etc. to R & B Department of Gujarat Government and Panchayat etc. in Gujarat and private parties.

The Income Tax authorities shared Appellant’s data of 26AS shown in Income Tax Returns. Perusing said data shared by Income Tax authorities, Central Excise officers at Bhavnagar noticed that the Appellant had short paid Service Tax for the F.Y. 2015-16 to 2016-17.

P. P. Jadeja, Authorized Representative, appeared for the appellant vehemently submitted against SCN and that the demand confirmed by impugned Order-in-Original is not sustainable and submitted that Appellant as a Registered unit under Service Tax, has paid Service Tax and filed all statutory ST-3 Returns; that Appellant has provided services to the State Government, local authority etc. which were exempted by Service Tax Notification No. 25/2012-ST vide Sr. Nos. 12(d),12(e), 12A(a), 13(a)and 29(h).

Rajesh Nathan, Assistant Commissioner, Authorised Representative, appeared on behalf of the Revenue, reiterated the finding of impugned Order and submits that though SCN was issued only on the basis of 26AS data shared by the Income Tax Authorities, O-I-O has given fairly reasonable findings to confirm the service Tax demand and hence O-I-O may be upheld.

A Two-Member Bench of the Authority comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “This being a case of interpretation of provisions, charge of suppression of facts, wilful misstatement, fraud, etc., cannot be levelled, for initiation of SCN beyond the normal time limitation. It is settled law that there must be deliberate attempt by the Appellant to suppress the facts from Department with an intention to evade payment of Service Tax, which is not existing in this case.”

“When demand of Service Tax is not sustained on merits as well as on time limitation in the facts of this case and when we have examined case from all possible angles, we also do not find any necessity to go into details of other points raised against Order-in-Original by Appellant like computing “Cum-Tax-Value” for Service Tax demand, though such points may have substantial force in favour of Appellant” the Bench noted.

To Read the full text of the Order CLICK HERE

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