2024 (6) TMI 191 - AT - Service Tax

Tribunal Rules Railway and Road Construction Services Exempt from Service Tax; 2007-08 Claim Barred by Limitation.

The Tribunal set aside the impugned order, allowing the appellant's appeal. It held that services rendered for railway and road construction were exempt ... Exemption form service tax - services rendered in respect of railways and construction of road - piping work under railway line - boulder pitching for construction of road - invocation of extended period of limitation - HELD THAT:- The appellant has executed two work orders to their client namely, M/s. Vedanta Aluminium Ltd., Jharsuguda. The work order dated 31.07.2007 is meant for piping work in respect of railway lines. A perusal of the said work order shows that the works have been rendered to the railways and during the relevant period, services rendered to the railways were exempted from Service Tax. Further, from the Work Orders, it is observed that the services rendered are rightly classifiable under the category of ‘works contract service’ as they involve transfer of property in goods. It is observed that the client has registered the aforesaid contracts under the Odisha Value Added Tax Act, 2004 and paid Works Contract Tax to the Government, but, in the Notice, no demand has been made under 'Work Contract Service'. Thus, it is observed that the demand confirmed under 'Commercial or Industrial Construction Service' is not sustainable and hence the same is set aside. Invocation of extended period of limitation - HELD THAT:- There is no suppression with intention to evade payment of Service Tax established in the present case. Hence, the Show Cause Notice demanding Service Tax for the period 2007-08 issued on 20.10.2010 is barred by limitation. Accordingly, the demands confirmed in the impugned order are liable to be set aside on the ground of limitation also. The impugned order is set aside - appeal allowed. Issues involved: Appeal against Order-in-Appeal upholding demands confirmed in Order-in-Original for Service Tax on work orders executed for piping work under railway line and boulder pitching for road construction.Summary:The present appeal was filed against the Order-in-Appeal upholding demands confirmed in the Order-in-Original for Service Tax on work orders executed by the appellant for piping work under railway line and boulder pitching for road construction. The appellant contended that the services rendered in respect of railways and road construction are exempt from Service Tax. The Assistant Commissioner confirmed the demand, which was upheld by the Commissioner (Appeals). The appellant argued that the services are rightly classifiable under 'works contract service' and that the demand is barred by limitation. The Tribunal observed that services rendered to railways and road construction were exempt from Service Tax during the relevant period. The demand confirmed under 'Commercial or Industrial Construction Service' was set aside as it was not sustainable. The Tribunal also held that the demand for the period 2007-08 was barred by limitation due to no suppression with intention to evade tax. Consequently, the impugned order was set aside, and the appeal filed by the appellant was allowed.