2026 (7) TMI 1621

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....ing service tax demand except granting relief in respect of part of the road works. 2. The fact in brief is, that the appellant is engaged in providing taxable services including erection, commissioning and installation, construction services, works contract service and goods transport agency service and is registered with the Service Tax Department. 3. During the Audit of accounts, the Department raised the following objections: (i) Service Tax on miscellaneous income of Rs. 7,49,861/- alleging the same taxable under declared service of "Agreeing to tolerate an act". (ii) Demand of Rs. 1,01,41,112/- of services rendered to M/s Haryana State Industrial & Infrastructure Development Corporation (HSIIDC) for the period ....

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....djustment due to breach does not automatically become taxable consideration. The Hon'ble Supreme Court in the case of UOI Vs Intercontinental Consultants and Technocrats Pvt Ltd., [2018 (10) GSTL 401 (SC)] held that service tax can be levied only on consideration for a service i.e., quid pro quo. Amounts without service nexus cannot be taxed. Hon'ble Supreme Court in the case of CST Vs M/s Bhayana Builders [2018 (2) TMI 1325] it was held that "any amount charged which has no nexus with the taxable service and is not consideration for the service provided does not become part of the value which is taxable under the Finance Act". This Bench in the case of M/s Sembcorp Energy India Ltd., Vs CCT, Hyderabad [2023 (6) Centax 193 (Tri-Hyd)] held t....

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....ns entrusted to municipality under Article 243W of constitution of India. 13. Learned AR submits that exemption under Notification No. 25/2012-ST entry 12, contending that HSIIDC is neither governmental nor local authority, therefore, appellant is not entitled to get relief under the exemption notification. Para 12 of Notification No. 25/2012-ST provides that: "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 ....

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.... has not provided any material to establish that the works predominantly for commercial exploitation. The contract involved infrastructure development of industrial estate including; roads, foot-paths, boundary walls, storm drainage, water supply and electrification. Such works are infrastructure/public utility works. The exemption notification must be interpreted on the basis of substance of activity and not merely nomenclature of recipient. We therefore, hold that the appellant is entitled to exemption under Notification No. 25/2012-ST. Consequently, demand of Rs. 1,01,41,112/- cannot be survive. Issue regarding Road Works demand for the period 01.04.2012 to 30.06.2012: 16. The dispute concerns whether road works forming part of com....