Service tax demand under repealed provisions fails; construction services for PWD and NOIDA qualify for exemption.

Demands confirmed under charging provisions that had already been repealed for the relevant post-1.7.2012 period could not be sustained, because the notices and order proceeded on statutory clauses no longer in force and the assessee was not put to notice under the correct levy provisions. Services rendered to PWD and NOIDA were also held exempt under Notification No. 25/2012-ST, since PWD was treated as Government, NOIDA as a local authority, and the work was for non-commercial public purposes rather than commerce, industry, or business. The impugned order was therefore unsustainable and the assessee obtained consequential relief.

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Issues: (i) Whether demands raised and confirmed under charging provisions that were not in force during the relevant period could be sustained; (ii) Whether the services rendered to PWD and NOIDA were exempt under Notification No. 25/2012-ST dated 20.6.2012.

Issue (i): Whether demands raised and confirmed under charging provisions that were not in force during the relevant period could be sustained.

Analysis: The liability was invoked and confirmed under clauses of section 65(105) of the Finance Act, 1994 even though, for the relevant period after 1.7.2012, those clauses had been repealed and the levy operated under section 66B for taxable services other than those in the negative list and declared services. The defect was not a mere misdescription of a provision. The show cause notices and the impugned order proceeded on provisions that were not in existence for the relevant period, and no opportunity was given to meet the case under the correct provisions.

Conclusion: The demand confirmed under non-existent charging provisions could not be sustained and this issue was decided in favour of the assessee.

Issue (ii): Whether the services rendered to PWD and NOIDA were exempt under Notification No. 25/2012-ST dated 20.6.2012.

Analysis: Entry 12 of Notification No. 25/2012-ST exempted specified services provided to the Government, a local authority, or a governmental authority for construction-related work meant predominantly for use other than commerce, industry, or business. PWD was treated as part of the Government itself. NOIDA, on the functions disclosed from its enabling statute, was held to be a local authority. The work done for these recipients was not predominantly for commercial or business use.

Conclusion: The services fell within the exemption and this issue was decided in favour of the assessee.

Final Conclusion: The impugned order was unsustainable. The Revenue's appeal failed, the assessee's appeals succeeded, and the assessee obtained consequential relief.

Ratio Decidendi: A demand cannot be sustained when it is founded and confirmed under charging provisions not applicable during the relevant period, and services rendered to the Government or a local authority for non-commercial public works are exempt where the notification so provides.

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