Services Rendered in Relation to Construction of Roads to Governmental Authorities: CESTAT Allows Appeal [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad Bench, held that since the services rendered by the appellant is in relation to construction of roads to Governmental Authorities, the appeal is directed to be allowed.

The appellant, M/s Lomesh Kumar (DAPL), is a firm engaged in providing workers to Government Authorities. The appellant had surrendered their license in 2015. Taking into consideration that the appellants have rendered taxable services and have not paid applicable service tax, a show cause notice dated 24.05.2021 was issued demanding service tax along with interest and penalties.

The counsel for the appellants submitted evidence in the form of Certificate issued by the customers of service and referred to the decision in Nizam Sugar Factory v. Collector of Central Excise, A.P. (2006).

The tribunal observed that the appellants have rendered services to Governmental Authorities like Uttar Pradesh Public Works Department as has been indicated by the documents and these facts are not denied by the Revenue.

CESTAT also noted that the case has been made on the basis of third party data without ascertaining the type of service rendered, the consideration received etc. It held:

“... these activities are in respect of road work etc. which are exempted by Notification No.25/2012 at Sl. No.12 reproduced below:-

“12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of –

…

… demands have been made is in respect of exempted services provided to Government Authorities in respect of construction, repair and maintenance of road etc, we do not find any merits in this demand and in the impugned order and set aside the same.”

The two member bench, composed of P.K. Choudhary (Judicial Member) and P. Anjali Kumar (Technical Member), allowed the appeal ultimately.

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