2019 (8) TMI 1762 - AT - Service Tax

Levy of service tax - survey and map making service - service of civil construction wherein survey and mapmaking was also involved - period from 1 April 2010 till 31 March 2012 - time limitation - HELD THAT - The respondent-assesee have prima facie rendered works contract service to the various Government departments/ agencies, and survey and mapmaking is incidental work in the same. Further, it is also found that under the definition of works contract as defined in Section 65(105)(zzzza), it specifically excludes works contract in relation to roads, railways, dams etc. Admittedly, the respondent-assessee have done the work in the nature of work for Railways, Dam or roads, which is not disputed. The view that in a work of complex nature, the predominant work being in the nature of works contract and survey/ map making being a part of it, can not be segregated and subject to tax under the different headings. Extended period of limitation - HELD THAT - There is no case of suppression of facts or any collusion or mis-conduct on the part of the respondent-assessee as they had maintained proper records in the ordinary course of business and have filed their ST 3 3 returns regularly. In view of this, the demand for the extended period is barred by limitation. This appeal filed by the Revenue is dismissed.

Issues:
1. Liability of the respondent-assessee to pay service tax under the category of survey and map making service.
2. Whether the demand for the period prior to 1 April 2010 should be dropped.
3. Limitation period for filing returns and payment of service tax.
4. Interpretation of works contract service in relation to survey and mapmaking.
5. Allegations of suppression of facts or misconduct by the respondent-assessee.

Analysis:

Issue 1 - Liability for Service Tax:
The appeal revolved around determining whether the respondent-assessee was liable to pay service tax under the category of survey and map making service. The respondent argued that survey and mapmaking were ancillary activities to their civil construction work, which fell under the works contract category. The Commissioner observed that the respondent was authorized by government departments to carry out works and was exempt from service tax under the survey and mapmaking service category. The Tribunal agreed, stating that the respondent had rendered works contract services to government departments, with survey and mapmaking being incidental. The predominant nature of the work being in the form of works contract, the Tribunal held that segregating survey and mapmaking for separate taxation was not warranted.

Issue 2 - Demand for Period Prior to 1 April 2010:
The Commissioner had dropped the demand for the period before 1 April 2010, as the respondent did not exist then, and work was done by a different entity. The Revenue did not appeal this finding, and it was considered settled.

Issue 3 - Limitation Period:
The respondent contended that the demand for the period from October 2010 to March 2011 became time-barred on 25th April 2012, as returns were filed regularly. The Tribunal held that the demand for the extended period was barred by limitation, as there was no suppression of facts or misconduct by the respondent.

Issue 4 - Interpretation of Works Contract Service:
The Tribunal interpreted the definition of works contract under Section 65(105)(zzzza), noting that it excluded works related to roads, railways, and dams. As the respondent had undertaken work for railways, dams, and roads, which was not disputed, the Tribunal found that the survey and mapmaking activities were part of the works contract and not subject to separate taxation.

Issue 5 - Allegations of Suppression of Facts:
The Tribunal found no evidence of suppression of facts or misconduct by the respondent. The respondent had maintained proper records, filed returns regularly, and there was no collusion or misconduct established. Consequently, the demand for the extended period was deemed barred by limitation.

In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the impugned order in favor of the respondent-assessee. The respondent was granted consequential benefits, if any, as per the decision.

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