Tribunal rules in favor of appellants, sets aside service tax demand on railways and director's services. Manpower and transportation services upheld. No penalties imposed.

The Tribunal ruled in favor of the appellants, setting aside the demand of service tax on construction and maintenance of railways and Director's services. The demands on manpower and transportation services were upheld as they were admitted and not contested. Consequently, no penalties were imposed, and the appeals were disposed of accordingly.

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Issues Involved:
1. Demand of service tax on construction and maintenance of railways.
2. Demand of service tax on manpower services.
3. Demand of service tax on transportation services.
4. Demand of service tax on Director's services.
5. Imposition of penalties.

Summary:

Issue 1: Demand of service tax on construction and maintenance of railways
The appellants challenged the demand of service tax for construction and maintenance of railways, claiming exemption under Notification No.25/2012-ST dated 20.06.2012. The Tribunal referred to its previous decision in Hari Construction & Associates Private Limited Vs. Commissioner of CGST & Excise, Patna II, which held that services related to construction and maintenance of railways are exempt from service tax. The Tribunal reiterated that "no service tax is payable by the Appellant No.(1) & (2)" for these activities, setting aside the demand.

Issue 2: Demand of service tax on manpower services
The appellant admitted and paid the service tax on manpower services amounting to Rs.27,91,113/ in their reply to the show-cause notice and did not contest this demand before the Tribunal.

Issue 3: Demand of service tax on transportation services
The appellant did not contest the demand of service tax on transportation services.

Issue 4: Demand of service tax on Director's services
The Tribunal held that the demand of service tax on Director's services is not sustainable, referencing its decision in Maithan Ispat Limited Vs. Commissioner of Central Excise & Service Tax, Bolpur. It was established that whole-time directors are considered employees under the Companies Act, 2013, and remuneration paid to them is in the nature of salaries, not subject to service tax.

Issue 5: Imposition of penalties
Given the findings on the demand of service tax, the Tribunal concluded that no penalty is imposable on the appellants.

Conclusion:
The Tribunal set aside the demand of service tax on construction and maintenance of railways and Director's services, while upholding the uncontested demands on manpower and transportation services. Consequently, no penalties were imposed, and the appeals were disposed of accordingly.

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