2022 (9) TMI 1157 - AT - Service Tax

Tribunal remands case for fresh decision after denying exemption claim for road construction in GIDC

SA DOMADIA Versus C.C.E. & S.T. -SURAT-I

The Tribunal allowed the appeal by remanding the case to the original adjudicating authority for a fresh decision. The Appellant's claim for exemption ... Exemption from service tax - works contract - sub contractor - construction services like construction of roads, laying down of water pipelines, construction of boundary walls, construction work required for erection/installation of road lights etc. - Applicability of N/N. 25/2012- ST dated 20.06.2012 - HELD THAT:- It is not in dispute how many services like construction of roads, laying down of pipelines etc were provided within the confines of GIDC. It is also not in doubt that GIDC is operated under Gujarat Industrial Development Act, 1962 and is developed by the state government of Gujarat for establishment and for organizing industry in industrial areas. In these circumstances all the services provided by the appellant within the confines of GIDC directly, GIDC would be covered under Sr. No. 12 (a) of Notification 25/2012- ST only if these said civil structure or any other original work meant predominantly for use other than for commerce, industry or other business and in the instant case it cannot be said that GIDC are not meant for promotion of industry or commerce. In these circumstances it cannot be said that Sr. No. 12(a) of the Notification No. 25/2012 provides any exemption to the work done by the appellant. Since GIDC are open to general public also apart from various industry and trade, it can be said that the said services bridges, tunnels in GIDC are open for to general public in that sense the benefit of Sr. No. 13 (a) of Notification No. 25/2012- ST dated 20.06.2012 can be extended to the roads, bridges, tunnels for goods transporting within the GIDC. The appellant has not specified the specific details of all the work done by the main contractor and therefore, has not substantiated the claim by the main appellant. The appellant is not entitled for any benefit of Sr. No. 12 (a) of Notification No. 25/2012. The appellant can claim the benefit of Sr. No. 13(a) of Notification No. 25/2012 in respect of roads constructed by them in GIDC. The appellant can claim the benefit of Sr. No. 29 (h) in respect of service of works contract provided as sub contractor to the main contractor wherever the appellant is able to establish that the main contractor was exempted from service tax in respect of works contract - there are no evidence supports the same has been produced and no bifurcation has been given. Matter remanded to the original adjudicating authority to decide a fresh by examining each case and testing the same on the parameters prescribed - Appeal is allowed by way of remand. Issues:Confirmation of demand of service tax, interest, and penalty - Exemption under Notification No. 25/2012-ST - Construction services provided to Government/State Government authorities - Denial of benefit for road construction in GIDC - Interpretation of Notification No. 25/2012-ST - Claiming benefits under Sr. No. 12(a), 13(a), and 29(h) of Notification No. 25/2012-ST - Lack of evidence and substantiation by the Appellant - Remand to original adjudicating authority for fresh decision.Analysis:The appeal in this case was filed against the confirmation of demand of service tax, interest, and penalty by M/s SA Domadia. The Appellant, engaged in providing taxable services to Government/State Government authorities, claimed exemption under Notification No. 25/2012-ST. The dispute arose when the benefit of the said exemption was denied concerning road construction in GIDC, on the grounds that the roads were not for use by the general public, but by individuals related to commerce, industry, and business activities.The Appellant argued that the services provided within GIDC were meant for commercial, industrial, professional, and business establishments, and thus, should qualify for exemption under Notification No. 25/2012-ST. The Tribunal examined the provisions of Notification No. 25/2012-ST and concluded that the services provided within GIDC did not fall under the exemption categories specified in Sr. No. 12(a) of the notification, as the structures were predominantly meant for promoting industry or commerce.Furthermore, the Appellant sought benefits under Sr. No. 13(a) and 29(h) of Notification No. 25/2012-ST. The Tribunal acknowledged that services like roads, bridges, and tunnels in GIDC were accessible to the general public, extending the possibility of exemption under Sr. No. 13(a). However, the Tribunal highlighted the lack of evidence and substantiation by the Appellant, especially regarding works done as a sub-contractor to main contractors providing exempted services.Consequently, the Tribunal allowed the appeal by way of remand, setting aside the impugned order and directing the original adjudicating authority to re-examine each case based on the parameters outlined in the judgment. The decision emphasized the importance of providing clear evidence and details to support claims for exemptions under the relevant notifications. The judgment was pronounced in the open court on 22.09.2022, highlighting the need for a thorough review of the case based on the legal provisions and evidence presented.