TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the demand on hiring of JCB machines and excavators used for transportation of construction material could be sustained against the appellant in view of reverse charge. (ii) Whether the appellant, as a sub-contractor executing road construction and water supply works for a government project, was entitled to exemption under Notification No. 25/2012-ST.
Issue (i): Whether the demand on hiring of JCB machines and excavators used for transportation of construction material could be sustained against the appellant in view of reverse charge.
Analysis: The service was found to be rendered in connection with transportation of construction material for road construction. Since the appellant was a proprietary firm and the service tax liability, for the relevant service, was cast on the recipient under the reverse charge mechanism, the demand raised against the appellant could not be sustained.
Conclusion: The demand of service tax on this count was held unsustainable and was set aside in favour of the assessee.
Issue (ii): Whether the appellant, as a sub-contractor executing road construction and water supply works for a government project, was entitled to exemption under Notification No. 25/2012-ST.
Analysis: The relevant exemption entries covered construction of a road, bridge, tunnel or terminal for road transportation used by the general public, and construction of pipelines or plants for water supply for the government or a governmental authority. The work executed by the appellant formed part of a government project undertaken through the main contractor, and the appellant could not be denied the benefit merely because it was a sub-contractor. The activities were held to fall within the exemption entries.
Conclusion: The demand relating to road construction and water supply project services was held exempt and was set aside in favour of the assessee.
Final Conclusion: The service tax demand was substantially deleted, with only the uncontested manpower and security service demand remaining upheld, and the appeal succeeded to that extent.
Ratio Decidendi: A sub-contractor executing exempt government project works cannot be denied the benefit of an exemption notification merely because the immediate recipient is the main contractor, and where reverse charge applies, the tax liability lies on the notified recipient rather than the service provider.
TaxTMI 
