Private township road construction falls outside public-road exemption; taxable service treatment, extended limitation, and penalties were upheld.

Construction of roads and allied civil works within township or residential complexes was held taxable because the exemption in Notification No. 25/2012-ST applies only to roads meant for use by the general public, and private internal roads do not meet that condition. The services, including sewer lines, water lines, boundary walls, sump wells and related works, were treated as construction-related taxable services under the Finance Act, 1994. Suppression of tax liability in self-assessed returns justified invocation of the extended period of limitation, and penalty, interest and late fee were sustained.

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Issues: (i) Whether construction of roads and allied civil works in township or residential complexes was exempt from service tax under Notification No. 25/2012-ST as construction of roads for use by general public, and whether such services were otherwise taxable under the relevant service categories. (ii) Whether invocation of the extended period of limitation, penalty, interest, and late fee was justified.

Issue (i): Whether construction of roads and allied civil works in township or residential complexes was exempt from service tax under Notification No. 25/2012-ST as construction of roads for use by general public, and whether such services were otherwise taxable under the relevant service categories.

Analysis: The services rendered consisted of road construction, sewer lines, water lines, boundary walls, sump wells, and other civil works for developers in township or residential projects. These activities fell within the scope of construction-related taxable services under the Finance Act, 1994, including construction of complex, commercial or industrial construction, site formation and works contract services. The exemption under Notification No. 25/2012-ST was confined to roads meant for use by the general public and had to be construed strictly. Roads within township or residential complexes, meant for occupants and buyers and not for the public at large, did not satisfy that condition. The contemporaneous circular also clarified that roads in residential complexes and similar private developments were taxable.

Conclusion: The exemption was not available and the impugned services were taxable. This issue is decided in favour of Revenue.

Issue (ii): Whether invocation of the extended period of limitation, penalty, interest, and late fee was justified.

Analysis: The appellant was under self-assessment but did not correctly disclose or pay the service tax liability in the returns, and the non-payment came to light during departmental action. That conduct supported the finding of suppression of facts with intent to evade tax, warranting the extended period of limitation and penalties under the Act. Interest on delayed payment was held to be mandatory, and the levy of late fee for belated returns was upheld.

Conclusion: Invocation of the extended period, penalty, interest, and late fee was upheld. This issue is also decided in favour of Revenue.

Final Conclusion: The demand and consequential statutory liabilities were sustained, and no interference was made with the adjudication.

Ratio Decidendi: Exemption notifications must be strictly construed, and construction of roads within a private township or residential complex, not meant for use by the general public, does not qualify for exemption meant for roads used by the public at large; deliberate non-disclosure justifies extended limitation and penalty.

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