TaxTMI 
TaxTMI 
2025 (11) TMI 370
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....vices as and when required, mainly by Railway authorities, both in the field of manufacturing and providing services. The services are provided on works contract basis relating to both 'original works' and 'maintenance works'. The appellant submitted periodical returns, as required under the Service Tax Rules. 3. On the basis of intelligence received from the Bilaspur Customs, Central Excise & Tax-II Commissionerate. Kolkata against the appellant herein, summons were issued on 22.01.2016 in response to which the appellant submitted some documents like copy of PAN, ST-2 registration certificate, copy of Trade License, copy of memorandum of association, etc. Shri Santu Karar, Director of the appellant, appeared on 15.03.2016 and submitted some more documents like store orders, statement of works contract done, VAT returns etc., and claimed that "The work so performed were well covered under the 'Original works' and are exempted from payment of Service Tax as provided under notification no. 25/2012 ST dated 20-06-2012. 3.1. In his statement dated 15.03.2016. Shri Santu Karar stated that they were engaged in work in relation to New Railway Wagons at factories of the railway, rebu....
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....015 for "complete renewal of roof and body repair with supply of material for 500 nos. of BCN wagons at BCN depot, Bilaspur. 6. On examination of the above contracts, it appeared to the Departmental Officers that the work performed by the appellant did not come under the purview of 'Original Works', as they had performed only upgradation, rehabilitation and renewal works and accordingly, were ineligible for the exemption available under Serial No. 14 (a) of Notification No. 25/2012-ST dated 20.06.2012 as had been claimed by the appellant. 7. On the basis of the above, a Show Cause Cum Demand Notice dated 12.04.2019 was issued, proposing demand and recovery of Service Tax amounting to Rs.2,09,91,709/- for the period from October 2013 to June 2017, along with interest and penalty thereon. 8. Upon adjudication, the ld. adjudicating authority passed the impugned order dated 31.05.2022, wherein he has concluded that the nature of services provided to the Railways under contracts in relation to railway wagons comprised of upgradation and rehabilitation of wagons, complete renewal of end-walls, side-walls and flooring of wagons and complete renewal of roof and body repair....
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....llant was awarded contract for Assembly /erection /commission of railway wagons by assembly of fabricated/pre-fabricated parts and the process had been considered as a manufacturing process of excisable goods and hence, levy of service tax is not permissible under the law. It is pertinent to mention that the appellant is having both Central Excise and Service Tax registrations for carrying out their business activities. The activity of manufacturing undertaken by the appellant was governed under the Central Excise Act and Rules, for which appropriate duty of excise has always been paid by the appellant in course of manufacture/clearance. In terms of Entry sl. no. 30 of Notification No. 25/2012-ST dated 20.06.2012, carrying out an intermediate production process as job work in relation to any goods on which appropriate duty is payable by the principal manufacturer is fully exempt from payment of Service Tax. By the same analogy, the appellant pleads that even holding the Department's view to be true, further demand of service tax is not sustainable and legally maintainable. (iii) Further, the impugned SCN was issued on 12.04.2019 for the period from October, 2013 of FY ....
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....ioning of wagons amount to 'original work' and hence the said services would be exempt from levy of Service Tax as provided under Serial No. 14 (a) of Notification No. 25/2012-ST dated 20.06.2012. In this regard, we agree with the submission of the appellant that if a contract/work order is covered under the definition of "original work" as provided under the Service Tax law, then such work is eligible for the exemption under Serial No. 14 (a) of Notification No. 25/2012-ST dated 20.06.2012. Accordingly, we examined the eligibility for the said exemption in respect of the works undertaken by the appellant. 12.1. In the present case, the appellant has claimed the benefit of exemption as provided under Sl. No. 14 of the Mega exemption Notification No. 25/2012-ST dated 20.06.2012, which reads as under: - "14. Services by way of construction, erection, commissioning, or installation of original works pertaining to, - • railways, including monorail or metro; • a single residential unit otherwise than as a part of a residential complex; • low- cost houses up to a carpet area of 60 square meters per house in a housing project appr....
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....quently, we hold that the demand of Service Tax along with interest confirmed in the impugned order is not sustainable and hence, we set aside the same. 13. We also note that the Commissioner of Central Excise, Raipur had initiated an inquiry against the appellant and issued two different show cause-cum-demand notices, considering the same activity undertaken by them as amounting to 'manufacture' and demanded central excise duty on them. However, pending finalization of the dispute, the appellant had opted for settlement of disputes under the SVLDRS Scheme, 2019, which was accepted by the Department. Thus, it is evident that assembly/commissioning of railway wagon at site has been considered by the Department itself as a 'manufacturing process' resulting into manufacture of wagon as an excisable goods. Thus, in view of the fact that the contract for assembly/erection/commission of railway wagons by assembly of fabricated/pre-fabricated parts, had been considered as a 'manufacturing process' of excisable goods by the Department, we are of the opinion that levy of Service Tax on the same activity is not permissible under the law. 14. Regarding invocation of extended period ....