Appellant exempt from service tax on road maintenance & repair. Tribunal grants relief citing Finance Act.

The Appellant was found not liable to pay service tax on management, maintenance, and repairs of roads for the period April 2007 to March 2009. The Tribunal allowed the appeal, citing the exemption under Sec 97(1) of the Finance Act, 1994, which exempted service tax on road maintenance and repair during a specified period. The Tribunal set aside the demand and penalties imposed, granting the Appellant consequential benefits based on the retrospective effect of the exemption.

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Issues involved:
The issue involved in this Appeal is whether the Appellant/Assessee is liable to pay service tax on the activity of management, maintenance, and repairs of roads.

Details of the Judgment:
The Show Cause Notice (SCN) was issued proposing to demand service tax for the period April 2007 to March 2009, as it appeared that the Appellant provided maintenance or repair service for roads. The Appellant had taken registration in March 2008 and was paying service tax. The SCN proposed a demand of Rs.7,14,23,581/- with penalties under Sec 77 & 78, along with late fee under Sec 70(1) of the Finance Act, 1994.

The SCN was adjudicated confirming the demand with penalties imposed under various sections of the Act. The Appellant appealed to the Tribunal, citing the insertion of Sec 97(1) in the Finance Act, 1994, which exempts service tax on management, maintenance, or repair of roads from June 16, 2005, to July 26, 2009. The Appellant also relied on a precedent ruling of the Tribunal and a judgment of the Madhya Pradesh High Court, both supporting the non-leviability of service tax on road repair and maintenance.

The Revenue argued that the amendment came later than the Impugned Order and that a refund window of six months was provided from the date of passing the Finance Act. The Tribunal noted that the Appellant provided services falling under maintenance or repair of roads category. Considering the retrospective effect of Sec 97(1) of the Finance Act, the Tribunal allowed the Appeal, setting aside the impugned order and entitling the Appellant to consequential benefits.

Separate Judgment:
No separate judgment was delivered by the judges in this case.

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