Road Construction Receipts for CSR Activities not part of Taxable Value: CESTAT grants Relief to Eastern India Enterprise [Read Order]
CESTAT Kolkata affirmed that road construction receipts under CSR activities are not taxable, upholding their exclusion from service tax valuation and dismissed Revenue’s appeal against Eastern India Enterprise.
![Road Construction Receipts for CSR Activities not part of Taxable Value: CESTAT grants Relief to Eastern India Enterprise [Read Order]](https://images.taxscan.in/h-upload/2025/07/10/2062395-road-construction.webp "Road Construction Receipts for CSR Activities not part of Taxable Value: CESTAT grants Relief to Eastern India Enterprise [Read Order]")
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld that the receipts which related to road constructions under the CorporateSocial Responsibility (CSR) Scheme are excluded from the taxable services rendered by entities. The appellant, Eastern India Enterprise, is a registered service tax assessee involved in providing "maintenance...
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld that the receipts which related to road constructions under the CorporateSocial Responsibility (CSR) Scheme are excluded from the taxable services rendered by entities.
The appellant, Eastern India Enterprise, is a registered service tax assessee involved in providing "maintenance and repair service" under Section 65(105)(zzg) of the Finance Act, 1994.
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The appellant was examined for audit and scrutiny for the financial years 2009-10 to 2012-13, and based on the audit conducted, a show cause notice was issued proposing a demand of ₹1,34,36,058 (including cesses), along with interest and penalties.
The assessee contended that certain bill amounts received during the period were for the construction of roads under CSR schemes and thus should be excluded from the taxability as they belong to road construction service, which were not taxable under the Finance Act, 1994.
The adjudicating authority, that is, the Commissioner of Central Excise, accepted this contention partially. The Commissioner allowed the exclusion of bill amounts, observing that the amounts pertained to road construction under CSR, and such construction was excluded from taxability.
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The Revenue filed an appeal arguing that the adjudicating authority had not clearly stated whether relevant work orders or agreements had been examined before allowing the exclusion. It contended that the order lacked proper reasoning and that balance sheets used by the assessee were irregular as they included figures for another entity, Bengal Enterprise.
The Tribunal noted that the adjudicating authority observed and verified the records, including the balance sheet, profit & loss accounts, and Chartered Accountant's certificates. It was found that the adjudicating authority had examined all the relevant work orders and other documents and was satisfied that the amounts received were indeed for road construction services under the CSR scheme.
The Bench comprising Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) held that there was no infirmity in the decision of the adjudicating authority in excluding the said amounts from the taxable value.
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The Tribunal concluded that the Revenue’s appeal lacks merit and, therefore, rejected it.
The appellant was represented by S.P. Siddhanta, while S. Dey represented the Revenue.
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