2015 (6) TMI 17 - AT - Service Tax

Waiver of pre deposit - Management, Maintenance & Repair service - whether the work of draining/replacement of damaged fencing and providing cement concrete pavement along side State Highways would be covered under the scope of management and repair of roads - Held that - Work order was obtained from PWD, Bikaner and the work was along the state highways. Thus, it is quite arguable that the drainage/fencing and pavements form part of the road as the interpretation of word road can be confined only to the part which vehicles ply to the exclusion of pavement and fencing on the sides. In case of Himalaya Plantations Vs. CCE, Nagpur 2014 (5) TMI 577 - CESTAT MUMBAI , the Tribunal observed that it appears that the services in relation to maintenance of road divider is covered under section 97 of the Finance Act, 1994. In view of the foregoing, we are of the view that the appellant have made out a good case for full waiver of pre-deposit and we order accordingly and stay the recovery of the impugned liabilities during the pendency of appeal - Stay granted.

Summary

Issues:
1. Whether the work of draining/replacement of damaged fencing and providing cement concrete pavement along State Highways falls under taxable service "Management, Maintenance & Repair" subject to service tax liability.

Analysis:
The case involved an appeal against an Order-in-Appeal confirming a service tax demand for a specific period. The demand was based on the contention that the work of draining/replacement of damaged fencing and providing cement concrete pavement constituted taxable service falling under "Management, Maintenance & Repair," attracting service tax liability. The appellant argued that the work orders were obtained for "Repair of Roads" from PWD, Bikaner, which they believed exempted them from service tax under section 65(30a) of the Finance Act, 1994. Additionally, they claimed that road repair work was covered under works contract service with specific exclusions for road repairs. Reference was made to section 97 of the Finance Act, 1994, inserted by the Finance Act, 2012, which exempted service tax on management, maintenance, or repair of roads during a specific period.

The Commissioner (Appeals) found that the work of draining/replacement of damaged fencing and providing cement concrete pavement, although not directly related to roads, did not fall under the retrospective exemption for repair of roads under section 97. The appellants argued that the work was conducted alongside State Highways, emphasizing that it was part of the repair and maintenance of roads. The core issue revolved around whether the work along State Highways could be considered within the scope of management and repair of roads. The Tribunal noted that the work order was from PWD, Bikaner, and the work was alongside State Highways, suggesting that drainage/fencing and pavements might be integral to the road itself. Drawing from a precedent, the Tribunal highlighted a case where services related to road divider maintenance were considered under section 97 of the Finance Act, 1994. Consequently, the Tribunal concluded that the appellants had presented a strong case for a full waiver of pre-deposit and ordered a stay on the recovery of the disputed liabilities during the appeal process.