TaxTMI 
TaxTMI 
2010 (9) TMI 286
X X X X Extracts X X X X
X X X X Extracts X X X X
....ioners. S/Shri K. Ramakrishna Reddy, S. Udaykumar, Ms. P. Bhuvaneshwari, P. Mahadevan, S. Yashwant, Senior Panel CGCs and Mahadevan, CGC, for the Respondent. [Order (Common)]. - The prayer in these writ petitions are either to quash the Circular No. 110/4/2009-S.T., dated 23-2-2009 or to quash the show cause notices/summons issued by the respective respondent calling for appearance/details pursuant to the said Circular. 2. The common issue raised in these writ petitions is, whether the road management, maintenance or repair services carried on by the petitioners, who are contractors, are liable to pay service tax from 16-6-2005 to 26-7-2009, when the Government of India in its Notification No. 23/2009 Service Tax, dated 27-7-2009 has granted exemption from the service tax levy to all persons, who are doing management, maintenance or repair of roads. 3. The brief facts necessary for disposal of these writ petitions are as follows : (a) The petitioners are Road Contractors. They are claiming that they are not covered under the definition of maintenance and repair as defined under Section 65(64) of the Finance Act, 1994. The pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d provision, construction services does not include laying or relaying of roads. Therefore from 16-6-2005, construction service was named as commercial and industrial construction services under Section 65(25b) of the Act. However, road laying or relaying are not included. Section 65(105)(zzza) of the Act as stated supra excludes works contract relating to roads, airports, railways transport terminals, bridges, tunnels and dams. It is the case of the petitioners that the Government thought fit to keep out the scope of service tax to the works connected thereto viz., repairing and relaying for the purpose of reducing the cost of the project and the first respondent by Circular No. 110/4/2009-S.T., dated 23-2-2009 stated that even now the laying of new road, widening of narrow road to broader roads, changing road surface, etc., are excluded from Service tax. (e) The intention of the parliament specifically excluding the activities relating to the roads and the incidental works has been borne in mind by the first respondent while issuing Notification No. 23/2009-Service Tax, dated 27-7-2009 and for the earlier period only the respondents are demanding the de....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ounsels appearing for the respondents on the other hand submitted that the notification dated 27-7-2009 is an exemption from paying service tax in relation to management, maintenance or repair of roads and the said exemption benefit cannot be applied retrospectively as claimed by the petitioners, particularly when the notification is not stating about the retrospective exemption. 7. I have considered the rival submissions made by the learned Senior Counsel for the petitioners as well as respective learned counsels for the respondents. 8. The issue to be decided in these writ petitions is, in the light of the notification issued on 27-7-2009 granting exemption from paying service tax for the works in relation to management, maintenance or repair of roads, whether the said exemption can be taken advantage of by the petitioners for the earlier period i.e., for the period from 16-6-2005 to 25-7-2009. 9. The facts in these cases are not in dispute. The contractors are doing road repair/maintenance works. The said works are awarded by the Highways Department or Local Bodies. It is an admitted case that for laying new roads, widening narrow roads and for changing r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en retrospectively, and if so, up to what period and unless it is so provided, the Tribunal or even the High Courts have no power to grant retrospectivity for a notification in the interpretation process. We therefore, allow the appeals by quashing the orders of the Tribunal and restoring the original orders confirmed in first appeals." The same is the view taken by the Himachal Pradesh High Court in the decision reported in 2009 (236) E.L.T. 47 (H.P.)(Commissioner of Central Excise v. Himachal Aluminium Pvt. Ltd.) in para 4 held that notification which may affect the rights of the parties are treated to be prospective in nature unless the notification itself clearly indicates that it will have retrospective effect A similar notification was considered by the Supreme Court in the decision reported in 2007 (215) E.L.T. 11 (S.C.) : (2007) 12 SCC 198 (Jay Mahakali Rolling Mills v. Union of India) and in paragraphs 6 to 10 (in SCC) held thus, "6. A bare reading of the circular clearly shows that it was intended to have prospective effect. 7. It is to be noted that in the Circular dated 31-3-1987 it has been stated that the "products like bars and rods made from such ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....maintenance and repairs is to be held only as prospective and for the earlier period the petitioners are bound to produce the records to the show cause notice/summons. The circular dated 23-2-2009 cannot be set aside as it reflects the changes made in the Finance Act, 2005. On 1-6-2005 the Central Board of Customs and Excise issued circular to clarify the same, which reads as follows : "16. Maintenance or Repair Services : 16.2 Prior to 16-6-2005, such services covered maintenance or repair or servicing of any goods or equipment, excluding motor vehicles. However, since 16-6-2005, services relating to maintenance or management of immovable property (such as roads, airports, railways, buildings, parks, electrical installations and the like) have also been covered under the purview of Service Tax. Such services would be taxable when provided under a contract or an agreement by any person or by a manufacturer or any person authorised by a manufacturer." (Emphasis Supplied) The Board vide Circular No. 110/4/2009-S.T. under F.No. 345/17/2008-TRU, dated 23 2-2009 further clarified as follows : "Commercial or industrial construction service (Section 65(105)(zzg....