CESTAT Sets Aside ₹47.96 Lakh Service Tax Demand on Road & Canal Works, Holds Exemption Cannot Be Denied Based Solely on Form 26AS [Read Order]
CESTAT rules that documents submitted have not been examined thoroughly. The tribunal deems the impugned order improper and allows the appeal.
![CESTAT Sets Aside ₹47.96 Lakh Service Tax Demand on Road & Canal Works, Holds Exemption Cannot Be Denied Based Solely on Form 26AS [Read Order]](https://images.taxscan.in/h-upload/2026/03/04/2127763-cestat-service-tax-demand-on-road-canal-works-holds-exemption-denied-based-solely-.webp "CESTAT Sets Aside ₹47.96 Lakh Service Tax Demand on Road & Canal Works, Holds Exemption Cannot Be Denied Based Solely on Form 26AS [Read Order]")
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad, set aside the demand of service tax of Rs. 47.96 lakh on road and canal works. In the present case, it was held that exemption cannot be denied based solely on Form 26AS. The facts state that the appellant, Shailja Construction, is engaged in providing construction services of road and canal to...
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad, set aside the demand of service tax of Rs. 47.96 lakh on road and canal works. In the present case, it was held that exemption cannot be denied based solely on Form 26AS.
The facts state that the appellant, Shailja Construction, is engaged in providing construction services of road and canal to Government and Local Authorities. The Appellant were under a bona fide belief that the services provided by them were exempted from the levy of service tax as per Notification No.25/2012-ST dated 20.06.2012and thus, they neither obtained registration under the Finance Act, 1944 nor charged any Service Tax in their invoices.
A show cause notice dated 28.04.2021 was issued alleging that they had rendered taxable services during Financial Year 2015-16 to 2016-17 and have not paid the applicable service tax. The Commissioner (Appeals) upheld the order of the Adjudicating Authority and dismissed the appeal. The Appellant then approached the CESTAT.
The appellant, through their Chartered Accountant, submitted that the order has been passed without considering the documents submitted in support of the appeal and the order is non-reasoned.
The tribunal observed that the services provided for by the appellant of Road and Canal construction to Government and Local Authorities are exempted from levy of service tax under Sr. No. 13(a) and 12(d) of Notification No. 25/2012-ST dated 20.06.2012.
CESTAT noted that additional documents submitted by the appellant have not been considered before demanding service tax. The single member bench set aside the demand of service tax as the services were exempted. P.K. Choudhary (Judicial Member) found the impugned order to be suffering from legal infirmities and allowed the appeal.
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