2026 (8) TMI 15

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....ax demand of Rs. 23,04,024/- together with interest, imposed penalty under Section 78 and penalty under Section 77 of the Finance Act, 1994. 2. The fact in brief is that the appellant is engaged in execution of contracts awarded by Rashtriya Ispat Nigam Ltd.(RINL). The work orders primarily relate to horticulture, landscaping, beautification, development of gardens, green belts, jungle clearance, road paving, footpaths and other allied development works within the plant premises. 3. The Department formed a view that the above activities were taxable under "Maintenance or Repair Service" and subsequently "Management, Maintenance or Repair Service". Accordingly, a Show Cause Notice dated 23.10.2008 proposed recovery of Service Tax along....

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.... fall within the taxable entry. It is further argued that the appellant failed to discharge Service Tax liability and therefore, the demand together with penalties has rightly been confirmed. 9. We have heard both the parties and perused the records with their submissions. 10. The following issues arise for determination: i) Whether the activities under taken by the appellant are classifiable under "Maintenance or Repair Service". ii) Whether benefit of Notification No. 12/2003-ST and 24/2009 - ST is admissible. iii) Whether the extended period of limitation has been rightly invoked. iv) Whether penalties are sustainable. 11. The main issue is whether horticulture, landscaping, beautification and....

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....subject to verification of documentary evidence. Further, substantial portion of the contracts admittedly relate to roads. Notification No. 24/2009 - ST exempted Maintenance or Repair of roads and Section 97 of the Finance Act, 2012 granted retrospective exemption. Consequently, Service Tax cannot survive on the road-related component. The authorities below have not carried out proper segregation of taxable and exempt components and have instead confirmed the demand on an aggregate basis. Such an approach cannot be sustained. 13. We also find merit in the plea of limitation. The appellant was admittedly registered with the Department. The contracts were executed for a Government undertaking, namely RINL. The transactions were duly reflec....