2026 (2) TMI 239 - AT - Service Tax

Exemption for construction of roads for use by general public remanded for fresh factual and eligibility decision; appeal allowed by remand

Question whether GST/central excise exemption applies to road construction works depends on whether the roads are for use by the general public; claimant ... Exemption for construction of roads for use by general public - extended period of limitation - onus on claimant to prove entitlement to exemption - remand to Adjudicating Authority for fresh decision on applicability of exemption - clarification that roads not meant for general public use are taxable - HELD THAT:- We find it appropriate to remand the matter to the Adjudicating Authority to decide the issue of applicability of the exemption notification. However, at the same time, we would like to refer to the decision of this Bench in the case of Warsi Buildcon Versus Principal Commissioner, Customs, Central Excise & Service Tax, Indore [2024 (3) TMI 286 - CESTAT NEW DELHI], where the work orders were awarded to the appellant by various developers or builders of the township and the issue whether construction of roads for the period July 2012 to 2013–14 was eligible for exemption under Notification No.25/2012 was considered. In the circumstances, the Bench had also upheld the invocation of the extended period of limitation. With reference to the above decision, the learned Counsel tried to distinguish the facts of the present case as in the case of Warsi Buildcon the Work Orders were awarded by private builders or colonisers, whereas in the present case, the Work Order has been issued by Jaipur Development Authority, which is a Government Authority. Since the exemption has been sought under Entry No.13(a) and 29(h), the relevant issue to be decided is whether the construction of road is for use by general public. We therefore, remand the matter to the Adjudicating Authority to consider the documents so as to ascertain the nature of the Work Order and the eligibility to the exemption notification. Consequently, the impugned order is set aside and the matter is remanded to the Original Authority to decide the issue afresh in all respects. The appeal is, accordingly allowed by way of remand. Issues: Whether the construction/renewal of internal roads undertaken by the appellant is covered by Notification No.25/2012-ST (exemption for construction of roads for use by general public).Analysis: The question requires examination of the nature and intended user of the roads to determine if they qualify as roads 'for use by general public' under the stated notification. The Tribunal noted that the adjudicatory record lacked evidence establishing public use; the appellant had not participated in the adjudication and the Authority below recorded absence of documents proving general public utility. The Bench referred to earlier Tribunal guidance distinguishing roads constructed for general public use from roads intended primarily for occupants of residential complexes or townships and to the CBEC clarification indicating exemption applies only to roads meant for general public use. The matter was therefore remitted to the Adjudicating Authority for fresh consideration of the documents and factual determination of whether the roads are meant for general public use.Conclusion: The appeal is allowed by way of remand directing the Adjudicating Authority to decide afresh the applicability of Notification No.25/2012-ST on the question whether the roads are for use by general public.