Road construction and allied civil works may fall outside service tax on maintenance or repair of immovable property.

Construction of roads and allied civil works was treated as outside the stronger reach of service tax on maintenance or repair of immovable property at the prima facie stage, particularly where the record referred to exclusion of road-related services and Notification No. 17/2005 S.T. granting exemption for road construction and specified infrastructure. In a dispute involving a State Government undertaking, the tribunal also noted that Committee on Disputes clearance was not insisted upon in the same way. On that basis, full waiver of the service tax, interest and penalties demanded under the impugned order was granted pending final hearing.

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Issues: Whether the appellant was required to make pre-deposit of the service tax, interest and penalties demanded under the impugned order; and whether the activities relating to construction of roads and allied civil works disclosed a prima facie case against levy under the category of maintenance or repair of immovable property.

Analysis: The appellant, a State Government undertaking, was engaged in civil construction work including roads. The record referred to the exclusion of road-related services from service tax levy and to Notification No. 17/2005 S.T. granting exemption for construction of roads and other specified infrastructure. On the materials placed, the demand under maintenance or repair of immovable property was not found to be strongly sustainable at the prima facie stage. The objection based on Committee on Disputes clearance was also treated as not requiring insistence in the case of State Government undertakings.

Outcome: Full waiver of the amounts demanded in the impugned order was granted and the matter was directed to be listed for final hearing.

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