TaxTMI 
TaxTMI 
2023 (6) TMI 240
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.... 2008-09: - (i) Five units in Mannur Village of Sriperumbudur Taluk viz., M/s. Myoung Shin India Automotive Private Limited, M/s. Global Stamping & Welding Automotive Private Limited, M/s. Daechang India Seat Company Private Limited, M/s. Daebu Automotive Seat India Private Limited and M/s. Dae Seung Autoparts India Private Limited had combinedly given a contract for road work i.e., laying of existing road, carrying out processes like picking the existing bituminous surface, providing and laying wet mix mancadam, prime coat, dense bituminous macadam and semi-dense bituminous concrete of required specifications for a total consideration of Rs.45,87,863/-. (ii) Another agreement was entered into with M/s. Myoung Shin India Automotive Private Limited for "road work" for an amount of Rs.24,41,709/-. (iii) Scrutiny of various documents such as Form-16A (TDS Certificates) has indicated that the appellant had carried out various maintenance and repair activities of roads for the Divisional Engineer, Chennai City Roads, Divisional Engineer, Highways, Thiruvallur, Executive Officer, Puzhal Town Panchayat, Thiruvallur and for improving the existing road falling und....
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....lition" (SFC) under Section 65(97a) of the Finance Act, 1994, read with Section 65(105)(zzza) of the Act, as per the table given below: - Period Service Category Total Gross Receipts (in Rs.) Cum-Tax Value (in Rs.) Rate of Service Tax Service Tax (in Rs.) 2005-06 MRS 28563734 25919904 10.20% 2643830 2006-07 MRS 33993495 30286435 12.24% 3707060 2007-08 MRS 48389888 43066828 12.36% 5323060 2008-09 MRS 67612911 60175250 12.36% 7437661 2008-09 SFC 6123418 5449820 12.36% 673598 Total 184683446 164898237 19785209 4.1 After due process of law, the Commissioner of Service Tax, Chennai vide Order-in-Original No. 88/2012 dated 26.07.2012 has confirmed the demand of Service Tax of Rs.1,07,04,221/- under proviso to Section 73(1) of the Finance Act, 1994 along with interest under Section 75 of the Finance Act, 1994. Penalty of Rs.1,07,04,221/- was also imposed under Section 78 of the Act along with penalties under Sections 77(1)(a) for non-registration and also a penalty of Rs.5,000/- under Section 77(2) for failure to file ST-3 returns on the due dates.....
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....Tax Department under 'works contract' and they were providing works contract service whereas the tax was demanded under maintenance or repair service (MRS) / site formation and clearance, excavation and earthmoving and demolition service (SFC); the services in respect of the projects executed for the period prior to 01.06.2007 being in the nature of composite works contract, could not be brought within the fold of 'commercial or industrial construction service' up to 01.06.2007 in the light of the judgement rendered by the Hon'ble Apex Court in the case of Commissioner of C.Ex. & Cus., Kerala v. M/s. Larsen & Toubro Ltd. [2015 (39) S.T.R. 913 (S.C.)]. 5.2.1 It was contended that the entire demand under maintenance or repair service of Rs.91,63,116/-, excluding JCB/Tipper hire charges, was not sustainable as it pertained to the period prior to July 2009, which was exempted by the insertion of Section 97 of the Finance Act, 2012 retrospectively for the period from 16.06.2005 to 26.07.2009, by relying on the decision in the case of K.O. Periyakaruppan v. Union of India [2018 (16) G.S.T.L. 78 (Mad.)] wherein it was held that for the period from 16.06.2005 to 26.07.2009, maintenance ....
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....and Tipper hire charges are exigible to Service Tax as the appellant has accounted for these charges separately in their financial statements. 6.3 Regarding 'site formation and clearance, excavation and earthmoving and demolition' service, it is submitted by the Learned Authorized Representative for the Revenue that the Service Tax demanded needs to be sustained. 7. We have heard both the sides and considered all the submissions made by both the parties and records as available in this appeal. The issues that arise for consideration in this appeal are: - (1) Whether the demand of Service Tax raised for the services provided by the appellant is justified under the category of 'management, maintenance or repair' service? (2) Whether the demand under the category of 'site formation and clearance, excavation and earthmoving and demolition' service is justified? and (3) Whether extended period for demand of tax and for imposition of penalty is invocable or not in the facts of this case? 8. We find that the Commissioner of Service Tax, Chennai has exempted all the Services provided in relation to repair of roads carried out for various Government Depar....
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....interest so to do, hereby exempts the taxable service, referred to in sub-clause (zzg) of clause (105) of section 65 of the Finance Act,1994, provided to any person by any other person in relation to management, maintenance or repair of roads, from the whole of the service tax leviable thereon under section 66 of the said Finance Act." 9.3.1 We find that the Mumbai Bench of the CESTAT in the case of Commissioner of Central Excise & Customs, Aurangabad v. M/s. Rajdeep Buildcon Pvt. Ltd. [2015 (38) S.T.R. 696 (Tri. - Mumbai)] has held as under: - "5. As regards the Service Tax liability under the category of 'management, maintenance and repair service', we find that the said services were rendered by the appellant to National Highways Authority of India for the maintenance or repairs of the roads. We find that the issue is no more res integra inasmuch as vide Finance Act of 2012, retrospective exemption was granted under Section 97 and Section 98. We reproduce the same as under : "SECTION 97. Special provision for exemption in certain cases relating to management, etc., of roads. - (1) Notwithstanding anything contained in Section 66, no Service Tax shall be levi....
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.... it becomes clear that the value of construction of road is to be included in the value of the service only when there is no segregation between the construction of commercial complex and construction of the road. If the contract recognizes the two activities as separate activities, even though the construction of the road is in connection with the commercial complex, the benefit has to be allowed. As such the fact whether the road is being constructed for public utility purpose or as a part of a commercial complex is not relevant, in terms of the Board's Circular above. Accordingly we do not find any infirmity in the view adopted by Commissioner (Appeals), inasmuch as the contract in the present appeal is admittedly for construction of road only." (Emphasis supplied) 9.4 In the light of the above, we hold that the demand pertaining to maintenance and repair service in respect of roads is not sustainable in view of the exemption under Section 97 of the Finance Act, which has retrospective effect for the period from 16.06.2005 to 26.07.2009. For according exemption, no distinction needs to be made between private and public roads. 10.1.1 On the issue of demandability ....
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....ospective effect from 2005 to 2009. As such, we hold that the demand of Service Tax on hiring of JCBs, Tippers, etc., is not maintainable. 11. As there was considerable confusion during the said period relating to the taxability under maintenance or repair service in respect of roads for infrastructure projects, we find that invoking the extended period is not justified. So, we set aside the penalties imposed under Sections 77 and 78 of the Finance Act, 1994. 12.1 We find that the appellant has provided services relating to filling up of low-lying area in industrial plot located in SIDCO for a total work value of Rs.60,57,610/-, which is classifiable under "site formation and clearance, excavation and earthmoving and demolition" service as defined in clause (97a) of Section 65 of the Finance Act, 1994. Recording the cum-tax benefit, the Service Tax payable was quantified as Rs.6,73,598/-. (paragraph 4.5 above) 12.2 We find from the records that the demand is raised in respect of site formation and clearance, excavation and earthmoving and demolition service on the basis of TDS Certificate issued by the Executive Engineer, SIDCO wherein it was mentioned that the assessee un....