2023 (10) TMI 1115 - AT - Service Tax

Railway signalling and telecommunication services to government companies qualify for service tax exemption under Entry 14(a) Notification 25/2012

M/s Kiran Infra Engineers Ltd. Versus Commissioner, Central Excise & CGST, Jaipur

CESTAT NEW DELHI held that appellant's work involving erection, commissioning and installation of railway signalling and telecommunication facilities, and ... Levy of service tax - erection, commissioning and installation of railway signalling and telecommunication facilities - construction of Rail Over Bridges for companies other than Indian Railways - exemption from service tax as provided in Entry 14 (a) of N/N. 25/2012 - HELD THAT:- The appellant have done the work for railways, as is evident from the nature of work from the show cause notice. It is further found that the said works qualify for exemption under Sl.No.14(a) of Mega Exemption Notification No.25/2012- ST. This Tribunal has held in the precedent rulings that there is no distinction drawn by the statute with respect to public railways or private railways. It is further found that the work has been done and or the services provided to the Government companies like RITES, NTPC, IRCON, which are wholly owned by the Government of India and the management of these companies are controlled by the Ministry of Railways. The impugned order set aside - appeal allowed. Issues:The issue in this appeal is whether the appellant is liable to pay service tax under composite contract, being erection, commissioning and installation of railway signalling and telecommunication facilities and construction of Rail Over Bridges for companies other than Indian Railways.Details of the Judgment:Issue 1: Liability to pay service tax under composite contractThe appellant was registered for services under ECIS, GTA, etc., engaged in design, supply, installation, testing, and commissioning of signalling and telecommunication facilities for railways and construction of Road Over Bridges for companies other than Indian Railways. The Department contended that the appellant was liable to pay service tax, invoking the extended period of limitation. The appellant argued that the services were exempt under Mega exemption notification No. 25/2012-ST. The Adjudicating Authority confirmed the demand, imposing interest and penalty. The Commissioner (Appeals) upheld the decision, stating that the services were meant for private/commercial use and not public carriage. The appellant cited precedents where the Tribunal held that the exemption applies to railways without distinction between public and private railways. The Tribunal found that the works qualified for exemption under the Mega Exemption Notification and allowed the appeal, setting aside the impugned order.Key Points:- The appellant provided services related to railways and qualified for exemption under the Mega Exemption Notification.- Precedent rulings established that there is no distinction between public and private railways for exemption purposes.- Services were provided to Government companies controlled by the Ministry of Railways.- The Tribunal allowed the appeal and set aside the impugned order, granting consequential benefits if any.Significant Phrases:- Mega exemption notification No. 25/2012-ST- Extended period of limitation- Service tax liability- Adjudicating Authority- Commissioner (Appeals)- Precedent rulings- Ministry of RailwaysLegal Terminology:- Composite contract- Erection, commissioning, and installation- Rail Over Bridges- Mega Exemption Notification- Tribunal's findings- Consequential benefitsFinal Decision:The Tribunal allowed the appeal, finding that the appellant's works qualified for exemption under the Mega Exemption Notification, with no distinction between public and private railways, and set aside the impugned order.