TaxTMI 
TaxTMI 
TaxTMI 
2025 (3) TMI 903
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....e by the appellant, the Adjudicating Authority confirmed the demand of Rs.26,59,22,521/- only and also imposed equal penalty. 2. The appellants are also in appeal against the Orders of the Commissioner (Appeals) as detailed below, wherein the issue is related to refund claims filed by the appellant on the grounds of their eligibility under Notification No.25/2012-ST dt.20.06.2012:- Appeal No. Order-in-Appeal Order-in-Original ST/30622/2018 209 & 210/2017-18 dt.26.02.2018 21/2017 dt.16.05.2017 ST/30026/2021 71/2019-20 dt.17.01.2020 17/2019-20 (Adjn) dt.16.08.2019 ST/30306/2021 35/2020-21 dt.15.12.2020 01/2020-21 dt.28.05.2020 ST/30312/2021 36/2020-21 dt.18.12.2020 84/2019-20 dt.21.05.2020 3. In these four appeals, the issue relates to admissibility of refund or otherwise by allowing certain exemptions claimed by the appellant in respect of service tax paid during the period 01.03.2015 to 01.03.2016. Since in the appeal No.ST/30787/2018, the issue of eligibility of certain exemptions claimed by the appellant is involved, which also has bearing on other four appeals, therefore, we propose to take up Appeal No. ST/30787/2018 first, before taking up other four app....
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....ir own, started paying service tax when the said notification was withdrawn w.e.f. 01.04.2015 vide Notification No. 06/2015-ST dt.01.03.2015. However, consequent to the restoration of the exemption vide Notification No. 09/2016 dt.01.03.2016 and grant of retrospective validation of exemption from 01.04.2015 to 29.02.2016, vide section 156 of the Finance Act, 2016 inserting new section 102 to the Finance Act, 1994, they had filed an application for refund of the tax amount of Rs.2,82,82,413/- paid during the said period. This refund was partly allowed, where the amount was paid in cash, whereas, partly disallowed, where it was paid through Cenvat credit, holding that they were eligible for exemption under S.No. 12(a) of notification 25/2012. Though subsequently, the department went into appeal against the said refund sanctioning order, whereby, the Commissioner (Appeals) set aside the said order and decided in favour of the department. They have approached this Tribunal against this order in a separate appeal, inferred supra. 6. He further submits that it is not disputed that RDA & NRDA are Governmental Authorities and what is being disputed is that they are engaged in commercial a....
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....n record that while the appellants claimed S.No.12(a), the Adjudicating Authority allowed them substantial relief under S.No.12(e). Therefore, this was an interpretational issue and that there was no deliberate intent or attempt on their part to evade any Service Tax and in view of the same, there cannot be any invocation of extended period as well as imposition of penalty. 8. On the other hand, learned Special Counsel for the Revenue, submitted that on going through the contract and other evidence on record as well as findings of the Adjudicating Authority, it is obvious that the recipient of service i.e., RDA/NRDA are engaged in commercial activities. Therefore, services provided by the appellant would not be covered within the ambit of S.No. 12(a). He has mainly highlighted certain facts like RDA/NRDA having procured land from private individuals from their own funds and loans obtained from the banks on commercial terms for business purpose. The appellants were engaged in developing the area and thereafter, added value by providing infrastructural facilities within the area. After the development, these authorities sold the developed plots to the public, purely on commercial te....
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.....20.06.2012 is reproduced below, for ready reference:- "12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of - a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; b) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958); c) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment; d) canal, dam or other irrigation works; e) pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal; or f) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause 44 of section 65 B of the said Act;" 12. As is obvious that ins....
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.... of notification, construction services rendered in relation to civil structures which are predominantly for the purposes of commerce or industry even if provided to a governmental authority are to be subjected to levy of Service Tax. In other words, if the service receiver intends to utilize the civil structure constructed by the service provider for commerce or industry, it would render the service provider liable to pay service tax. 37.4 There is no ambiguity on the fact that, NRDA is developing and selling commercial plots and residential plots to the residents of the country on a rate fixed by them. Therefore, it appears that the services in this case having been used for commercial purposes, exemption from tax can not apply as provided under SI No.12(a) of Notification No. 25/2012-ST dated 20.06.2012 as amended and accordingly, there exists a tax liability on the part of L and T on these services. As already discussed in the preceding paragraphs that it is settled legal position that the activities performed by the sovereign/public authorities under the provision of law which are in the nature of statutory obligations are exempted from payment of service tax subject t....
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.... of S.No. 12(a). This argument is also not correct, inasmuch as the exemption notification has to be construed strictly in terms of the wordings of the notification and a plain reading would obviously indicate that if the service was for use for commercial purpose then it would not get covered. In this case, it is obvious that all these activities are for value addition of the plot and township, which are being sold at commercial rates and terms by these two authorities, therefore, these services are obviously provided to the authorities, who are otherwise engaged in commerce. In view of the same, we do not find any infirmity in the impugned order in denying them the benefit under S.No. 12(a) of the notification 25/2012-ST. (b) Whether S.No. 12(e) covers the excluded category, which has been left out by the Commissioner or otherwise while extending the benefit under S.No. 12(e) to RDA:- 15. We note that by way of an alternative ground, the appellants had claimed the benefit under S.No. 12(e) of the said notification, which basically exempts pipeline, conduit or plant for water supply or water treatment or sewerage treatment or disposal. Insofar as the other conditions are concern....
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....ing stations and also interconnected reservoirs and sumps meant to feed or collect water, sewerage, etc., from these pumping stations. (c) Whether benefit under S.No. 39 covers a situation where the service provider is not a Governmental Authority:- 16. S.No. 30 of the notification is reproduced below, for ease of reference:- "39. Services by a governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243 W of the Constitution." 17. A plain reading of this entry would indicate that here the services are to be provided by the governmental authority by way of any activity in relation to any function entrusted to a municipality under Article 243W of the constitution. Since in this case, the services are being provided by the appellant, who are not a governmental authority, this entry would not be applicable to them. Therefore, they would not be entitled for the benefit under this entry. Accordingly, we do not find any infirmity in the findings of the Adjudicating Authority insofar as denial of eligibility under S.No.39 of the said notification is concerned. 18. Insofar as the issue relating to eligibility under S.No. 12(....
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....Tigrania Metal & Steel Industries (P) Ltd [2015 (326) ELT 650 (Bom.)]. He has also distinguished the reliance placed by the appellant on the judgment of Hon'ble Supreme Court in the case of CCE, Jalandhar Vs Royal Enterprises [2016 (337) ELT 482 (SC)]. The appellants have mainly contested that they have never deliberately attempted to evade the service tax. In fact, they were under bonafide belief that they are covered within the ambit of S.No. 12(a) of the Notification 25/2012-ST. This is also manifested by the fact that they themselves started paying service tax when the entry was rescinded in 2015 and again once it was restored retrospectively, they went for refund in terms of provisions under section 102 of the Finance Act. In fact, the concerned sanctioning authority initially allowed them the refund also considering them as eligible under entry 12(a) of the notification, though, later on, rejected by the Commissioner (Appeals) on appeal by the Department against the said order. 20. We find that a holistic understanding of this issue would indicate that there have been interpretational issues as regards coverage of various activities under notification 25/2012-ST post introdu....
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....ocation of extended period is liable to be set aside and is accordingly, set aside. Further, since the extended period is not invocable, the penalty imposed is also not tenable and accordingly, the same is also set aside. 21. Therefore, in view of the observations and findings in the foregoing paras, we remand the matter back to the Original Adjudicating Authority to redetermine the eligibility in respect of excluded activities under S.No. 12(e) in respect RDA and also for all the activities in respect of NRDA, keeping in view the observations made in relevant paras, supra. Appeal Nos. ST/30622/2018, ST/30026/2021, ST/30306/2021 & ST/30312/2021:- 22. In respect of these appeals, the issue is basically regarding their eligibility of refund or otherwise for the period when they had paid service tax, suo moto. We find that they have paid certain service tax and thereafter, they filed refund claim in terms of provision under section 102 of the Finance Act, 1994. Since the refund was initially sanctioned but later on rejected by the Commissioner (Appeals), based on the decision of the said authority that they are not eligible for benefit under S.No. 12(....