2016 (9) TMI 50 - AAR - Service Tax

Eligibility of exemption under Notification No. 25/2012-ST dated 20.06.2012 construction of railway sidings for private parties - service of construction, erection, commissioning or installation of original works pertaining to railways exempted vide entry 14(a) of the said notification Government railway and Non-Government railway - Section 2 (20) and (25) of the Railways Act, 1989 railway - Section 2(31) of the Railways Act, 1989 Held that - It is admitted fact that construction of railway siding would be construction of original work pertaining to railways in terms of Notification No. 25/2012-ST. It is to be observed that subject Notification No.25/2012-ST does not differentiate between Government and Non-Government railway. Railway as per the Railways Act, 1989 inter-alia means a railway, or any portion of railway for the public carriage of passengers or goods. However, Notification No. 25/2012-ST dated 20.06.2012 vide entry at S.No.14 (a) grants exemption to railways and is not restricted to railway . Even if the definition of railway is taken from the Railways Act, 1989 for interpreting said Notification, as Revenue has resorted to do, the benefit of Notification would be available to railways including railway used for purposes other than for public carriage of passengers or goods no differentiation made on Government and Non-Government railway for providing exemption exemption available on Construction of railway siding for private parties ruled in favor of applicant.

Summary

Issues Involved:
Construction of railway siding for private parties exemption under Notification No. 25/2012-ST.

Analysis:
The case involved the question of whether the construction of railway sidings for private parties is exempted under Notification No. 25/2012-ST. The applicant, a Public Limited Company, sought a ruling from the Authority for Advance Rulings on this matter. The relevant exemption clause in the notification pertained to services by way of construction, erection, commissioning, or installation of original works pertaining to railways, including monorail or metro. The Revenue argued that only Government railways should benefit from this exemption, and constructions for private companies should not qualify as railways. They contended that private railway sidings exclusively used for private purposes do not meet the definition of railways for the exemption. However, the Authority noted that the notification did not differentiate between Government and Non-Government railways. Even if the Railways Act's definition of railway is considered, the benefit of the notification should extend to railways, including those used for purposes other than public carriage of passengers or goods.

The Authority further highlighted that Section 94 of the Railways Act, 1989, cited by the Revenue, was not relevant to the issue at hand as it dealt with liability for damage to in-transit goods. The conclusion drawn was that the construction of railway sidings for private parties is indeed exempt under Notification No. 25/2012-ST. The ruling clarified that the exemption provided in entry No. 14(a) of the notification applies to such constructions, regardless of whether they are for Government or Non-Government railways. The decision was based on the interpretation that the term "railways" in the notification encompasses all types of railways, including those used for private purposes. Therefore, the applicant was deemed eligible for the exemption under the specified notification.