2024 (3) TMI 917

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....contract service". 2. The facts of the case are that the appellant is engaged in providing works contract service by way of construction of railway infrastructure such as laying down of tracks and other support structures of railway. The said project was awarded to the appellant by M/s. Damodar Valley Corporation for their Mega Projects at various places, for which they needed dedicated tracks and other support structures for exclusive use by M/s. Damodar Valley Corporation. The appellant was not paying Service Tax on their activity of works contract service on the ground that their activities are exempt in terms of Notification No. 17/2005-S.T. dated 07.06.2005 up to 30.06.2012 and Notification No. 25/2012-S.T. dated 20.06.2012 with eff....

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....Tribunal in the case of Konkan Railway Corporation Limited (supra), wherein this Tribunal has observed as under : "6. Learned Authorised Representative submits that the decision of the Tribunal in re KVR Rail Infra Projects Pvt Ltd is pending before the Hon'ble Supreme Court and that the impugned project, undertaken exclusively for handling coal to be used by M/s National Thermal Power Corporation for generation of thermal energy, was not eligible for exemption intended for 'railways' engaged in public carriage of persons and goods. 7. It is interesting to note that the assessee had placed reliance upon the decisions of the Tribunal supra before the original authority which did not appear to have carried much impression wi....

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....of the Tribunal. While addressing the issue of 'commercial consideration' being the 7 ST/86191/2021 bench mark for determining eligibility for exclusion/exemption, the Tribunal, in re Hindustan Construction Company Ltd, held that '5. The exclusion, whether under the separate entry or within the umbrella of the new taxable service, of 'railways' continued unabated. It would appear that the adjudicating authority was particularly impressed by the activity brought within the tax net to be ascertained on the basis of commerciality to bring it in conformity with the description of the taxable activity. Hence, according to him, the operation of the two recipients of service, being evidently commercial, did not merit the exclusion contain....

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....ernment.... "Railway" in the Indian Context is popularly known as "Indian Railways" and is more appropriately understood as Railways operated under the Indian Railways Act especially for the purpose of 8 ST/86191/2021 any special dispensations such as tax exemptions.' 6. We find no authority for these sweeping statements on the intent of Finance Act, 1994, the scope of the taxable service under which the levy has been confirmed or the status of railway operations in the country. In the context of the claim of the appellants, limited to the exclusion from the taxability otherwise attached to 'commercial or industrial construction service', we are not required to define the scope of the taxable service; the test of commercial imperat....

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....rnance of the Railways belonging to the Government. 8. In the absence of any qualification for the 'railway' incorporated in the exclusion component of the taxable service, any railway, irrespective of ownership, is covered. Within the scheme of 'negative list', there is a specific exemption for metro or monorail within the broader exclusion available to Railways. The exclusion of 'metro' or 'monorail' has occurred only after the period of dispute and therefore does not concern us.' 9. It is, thus, clear that the proposition of strict construction of intent of exemption notification must also go hand in hand with strict construction of every word/phrase therein. The exemption from tax is available to 'railways', excluding ....