2018 (5) TMI 2192 - AT - Service Tax

Appellant's highway maintenance work exempt from service tax under Section 97 for 2005-2009 period

M/s. Shree Mohangarh Construction Co. Versus C.C.E., Jaipur-II

The CESTAT Delhi - AT held that the appellant's activities of draining, replacing damaged fencing, and providing cement concrete pavement alongside State ... Taxability - activities involving draining, replacement of damaged fencing, and providing cement concrete pavement - Management, Maintenance & Repair service or not - HELD THAT:- It is an admitted fact on record that different activities pursuant to the work order issued by CPWD were executed by the appellant alongside of the State Highways. In context with levy of service tax on repair of road, we find that Section 97 was inserted in the statute book w.e.f. 28.05.2012 by Finance Act, 2012, wherein a special provision was inserted exempting the “Management, Maintenance & Repair” of road from the payment of service tax for the period 16.06.2005 to 26.07.2009. Since the issue involved in this case is within such period prescribed under Section 97 of the Act, the activities undertaken by the appellant along side of the State highways should not be taxed under the category of Management, Maintenance & Repair Service. There are no merit in the impugned order - appeal allowed. The appeal challenges the order upholding service tax demand on activities involving draining, replacement of damaged fencing, and providing cement concrete pavement, classified under 'Management, Maintenance & Repair' service per Section 65(64) read with Section 65(105)(zzg) of the Finance Act, 1994. The appellant argued that the work constituted road repair, which falls under Works Contract Service and is specifically excluded from service tax under Section 65(30a). Moreover, reliance was placed on Section 97 (inserted by Finance Act, 2012), which exempts 'Management, Maintenance & Repair' of roads from service tax for the period 16.06.2005 to 26.07.2009. The Tribunal noted that the activities were performed alongside State Highways during the exempted period under Section 97. Since this provision explicitly exempts such services from service tax within the specified timeframe, the Tribunal concluded that the appellant's work should not be taxed under 'Management, Maintenance & Repair Service.' Accordingly, the impugned order was set aside, and the appeal was allowed. The decision underscores the applicability of Section 97's exemption to road-related maintenance activities carried out during the relevant period, negating the service tax demand.