Service Tax Demand Overturned for Road Repairs; Exemption Applies to Both Public and Private Roads.

The forum set aside the Order-in-Original, allowing the appeal in favor of the appellant. It concluded that the service tax demand was unsustainable as the exemption under Notification No.24/2009 applied to management, maintenance, or repair of roads, regardless of public or private use. The appellant was granted consequential benefits as per law.

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Issues involved:
The issues involved in this case include the non-remittance of applicable service tax by the appellant for services provided to M/s. Neyveli Lignite Corporation Ltd., Neyveli, and the dispute regarding the sustainability of the service tax demand.

Details of the Judgment:

Issue 1: Non-remittance of Service Tax
The appellant had entered into contracts with M/s. Neyveli Lignite Corporation Ltd., Neyveli, for various services but had not remitted the applicable service tax. The revenue issued a show-cause notice proposing to recover the service tax, which was confirmed in the Order-in-Original. The appellant appealed before the First Appellate Authority, which dismissed the appeal, leading to the present appeal before the forum.

Issue 2: Sustainability of Service Tax Demand
The main issue before the forum was whether the demand of service tax on the appellant is sustainable in the eye of law. The appellant claimed exemption from service tax based on Notification No.24/2009 dated 27.07.2009, which provided for exemption on management, maintenance, or repair of roads. The forum noted that the notification and subsequent amendments did not specify that the exemption was only for public utility roads. Citing relevant case laws, the forum held that the benefit of exclusion from service tax should be available irrespective of whether the roads were for public utility or private use. Therefore, the demand raised and confirmed against the taxpayer was deemed unsustainable.

Conclusion
Based on the analysis of the relevant provisions and case laws, the forum set aside the impugned order, allowing the appeal in favor of the appellant. The judgment was pronounced in open court on 01.05.2024, granting the appellant consequential benefits, if any, as per law.

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