TaxTMI 
TaxTMI 
2025 (12) TMI 514
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.... etc. and land developments for commercial purposes. For the purpose of payment of service tax on taxable output services of 'Site formation and clearance, Excavation, Earth moving and Demolition services' and for compliance with the Service Tax statute, they are registered with the jurisdictional Commissionerate under service tax registration No. AFRPK8883MST001. 2.2 During the disputed period from April, 2010 to March, 2015, the appellants had provided site formation and clearance services to M/s D.M. Corporation Private Limited, who in turn had provided such services to M/s Shimizu Corporation (Nipro Company) and various other clients, who were engaged in the construction projects of dams, roads, canals, airports and tunnels. The appellants have not paid service tax on the services provided to their clients on the ground that such services were exempt from payment of service tax in terms of Notification No.17/2005-S.T. dated 07.06.2005 and subsequently after 01.07.2012 in terms of Notification No.25/2012- S.T. dated 01.07.2012. 2.3 The jurisdictional Central Excise & Service Tax Commissionerate had conducted detailed investigation on non-payment of service tax by the appel....
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....l ST-3 returns filed by the appellants with the jurisdictional Commissionerate. 3.2 He further stated that the appellants had claimed the benefit of exemption under Notification No.17/2005-S.T. dated 07.06.2005 in respect of services of site formation and clearance, excavation and earthmoving etc. provided in the course of construction of roads, airports, railways, dams etc. and subsequently after 01.07.2012 in terms of entries at Serial Nos. 12, 13 and 14 of Notification No.25/2012-S.T. dated 01.07.2012. In this regard, learned Advocate submitted that all the works undertaken by the appellants were duly accounted for in their records as taxable or exempted services, and further categorised as road projects, mining works, dam works, canal works, hydropower project works, airport project works, private quarry work, private land work in order to claim the exemption from payment of service tax. The details regarding various parties from whom the work orders were received, the nature of such work under various category, the amounts involved in such work etc. were maintained by them and the entire show cause proceedings quantifying the non-payment of service tax in various Annexures ....
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....r site formation and clearance services, subsequent to the introduction of negative list regime, he stated that the learned adjudicating authority has rightly confirmed the adjudged demands. 5. Heard both sides and perused the case records along with paper books and case law citations submitted by both sides in this case. 6. In the impugned order dated 19.09.2016, learned Commissioner had examined the issues under dispute and had recorded his findings as follows: "19. The assessee submitted their written reply on 21.03.2016 wherein inter-alia it was stated as under: 19.1 With regard to the demand for the service tax of Rs. 93,66,828/- for the period up to 30.06.2012, as per Notification No.17/2005-S.T. dt.07.06.2005 effective from 16.06.2005, the exemption from payment of the service tax is provided for the site preparation, etc. provided in the course of construction of roads, airports, railways, transport terminals, bridges, tunnels, dams, ports and other ports. There is no service tax leviable on the site preparation, etc. provided in the course of construction of roads, airports, railways, transport terminals, bridges, tunnels, dams, ports and other port....
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....at whether the assessee is engaged in activities of drilling and blasting and these activities fall under the category of "Site Formation and Clearance, Excavation and Earth Moving and Demolition Services". It is also accepted that the assessee has provided these services to clients who are engaged in the construction of projects of dams, roads, canals, airports, tunnels etc. I find that there are two distinct periods involved in the Show Cause Notice. The first is from April 2010 to 30.06.2012 and the other period is from 01.07.2012 to 31.03.2015 which is commonly known as negative list regime. I will consider the legal positions in both these periods one by one. 22. During the first period that is from 01.04.2010 to 30.06.2012, the assessee has provided services to M/s D.M. Corporation Pvt. Ltd. at Shirwal site. They work pertained to site preparation for M/s Nipro Ltd. the assessee has received a consideration of Rs. 2,49,61,405/- from M/s D.M. Corporation. They have accepted the Service Tax liability on this amount and they have paid Rs. 23,52,120/- under various challans. As there is no dispute about this amount the Service Tax needs to be appropriated. The assessee h....
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....he services provided by them are eligible for exemption under Notification No.17/2005-ST dtd. 07.06.2005. I am therefore inclined to deny the benefit of the above-mentioned exemption notification claimed by them and thus confirm the demand. xxx xxx xxx xxx 25. The second period starts with the importation of negative list regime with effect from 01.07.2012. I find that many exemption notifications including Notification No.17/2005-ST dated 07.06.2005 were rescinded w.e.f. 01.07.2012 and one mega exemption notification No.25/2012-ST dated 20.06.2012 become operative. The relevant portion from the notification regarding construction, site preparation and other relevant activities is reproduced below. xxx xxx xxx xxx From the provisions of the above-mentioned notification I find that only specific services of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration are exempted and there is no mention of services which are ancillary to or which are input services of these original works are not at all exempted. 26....... The intention of legislature was very clear before 30.06.2012 and....
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....amount of Rs.44,37,745/- and the same reiterated by the appellants in the reply to SCN, whereas in the impugned order an amount of Rs. 23,52,120/- was appropriated. Thus, there was no detailed discussion in the impugned order in respect of correlation between the amount paid during the investigation by the appellants as given in Annexure-B to SCN, and the amount appropriated towards the adjudged demands. For these reasons alone, the impugned order is liable to be setaside as the confirmation of demands is without any legal basis and is also contrary to the facts of the case. 7. We have carefully examined the exemption notifications relevant to the present dispute i.e., Notification No.17/2005-S.T. dated 07.06.2005 and entries at Serial Nos. 12, 13 and 14 of Notification No.25/2012-S.T. dated 01.07.2012. The extract of these notifications are given below: 7th June, 2005 Notification No. 17/ 2005-Service Tax In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so t....
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....n of India, All India Sports Council for the Deaf, Paralympic Committee of India or Special Olympics Bharat; (c) by Central Civil Services Cultural and Sports Board; (d) as part of national games, by Indian Olympic Association; or (e) under Panchayat Yuva Kreeda Aur Khel Abhiyaan (PYKKA) Scheme; 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....
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....5-S.T. dated 07.06.2005, the Central Government had fully exempted the activity of "site formation and clearance, excavation and earthmoving and demolition, and such other similar activities" referred to as taxable service under the category specified in sub-clause (zzza) to clause (105) of Section 65 of the Finance Act, 1994 from payment of service tax. Such services could be provided by any person to any person; but such services should be provided in the course of construction of roads, airports, railways, transport terminals, bridges, funnels, dams, ports or other ports. In the present case, the SCN along with its annexures specify that the nature of works carried out by the appellants as (i) road projects; (ii) mining work; (iii) dam work; (iv) canal work; (v) quarry rework; (vi) airport projects etc. As the services provided by the appellants are broadly and specifically covered by the services that were exempted in the Notification No.17/2005-S.T. dated 07.06.2005, the only contentious issue for a decision by the Department was that such services were not directly provided by the appellants to the entities such as airport, port, dam etc., On careful consideration of the word....
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.... authority does not stand legal scrutiny. 9.1 We find that in the case of Shree Nandi Logistics (supra), the Coordinate Bench of the Tribunal has held that demand service tax on site formation and clearance, excavation and earthmoving work for road construction, water supply etc., provided as a sub-contractor are also eligible for exemption under Notifications No. No.17/2005-S.T. dated 07.06.2005 and Notification No.25/2012-S.T. dated 20.06.2012. The relevant paragraphs in the said order is extracted and given below: "4.2 As regard the demand of Rs. 27,226/- for road construction work and Rs. 10,64,431/- related to water supply project, we find that these services are related to construction of road provided to M/s L & T and in turn L& T has got the work done from the appellant for execution of contract for the governmental authority i.e. GIDC (Gujarat Industrial Development Corporation). In this regard we find that the appellant have claimed the exemption under Notification No. 25/2012-ST dated 20.06.2012 (w.e.f. 01.07.2012) under Sr. No. 12 & 13(a). The same are reproduced below:- "12. Service provided to the Government, a local authority or a governmental au....
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....at even though the service is provided by the sub-contractor but since the same undisputedly meant for the government i.e. GIDC, the activities are covered under Sr. No. 12 and 13 of the notification No. 25/2012-ST..." 9.2 We further find that in the case of Saritha Infra & Geo Structures (supra), the Co-ordinate Bench of the Tribunal has held that demand service tax is not sustainable and the reason for denial of exemption as these services have been provided by sub-contractor or through a sub-subcontractor to the main contractor is incorrect, when the main entity is found eligible to have been covered by the notification benefit. The relevant paragraphs in the said order is extracted and given below: "7. It is not in dispute that the ultimate client in this case is IIT, Kharagpur which is an educational establishment. Research Park of this educational establishment was being constructed by the main contractor M/s. NCCL and a portion of that work has been sub-contracted to the appellant. The exemption available to the services provided to IIT, Kharagpur does not depend on whether such services are provided directly by the main contractor or by the main contractor using....