2018 (4) TMI 1033 - AT - Service Tax

Liability of service tax - Maintenance or Repair Services - contract for widening and strengthening of the link road with bituminous concrete - Held that - The work of widening of narrow road to broader road would be completed only after the strengthening of new existing road for keeping in good condition. Therefore, the work widening and strengthening of link road with bituminous concrete rendered by the respondents is not liable to service tax under Maintenance or Repair Services - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Dispute over service tax liability for services provided under a contract related to widening and strengthening of a road with bituminous concrete.

Analysis:
The judgment delivered by the Appellate Tribunal CESTAT Chennai pertains to a dispute regarding the applicability of service tax on services rendered under a contract for widening and strengthening a road with bituminous concrete. The appeal was filed by the Revenue against the order of the Commissioner (Appeals). The primary issue revolved around whether the services provided fell under the category of maintenance or repair activities, which would be exempt from service tax. The Commissioner (Appeals) had ruled in favor of the respondent, stating that widening and strengthening the road did not attract service tax under maintenance or repair services. This decision was supported by a circular from the Board. The Revenue failed to provide any grounds to challenge this decision, and the Tribunal found no fault in the Commissioner (Appeals)’s interpretation. Additionally, reference was made to a notification exempting repair of roads, although the specific notification was not produced during the proceedings.

In conclusion, the Appellate Tribunal upheld the decision of the Commissioner (Appeals) and rejected the Revenue’s appeal. The Tribunal found no flaws in the reasoning provided by the Commissioner (Appeals) and confirmed that the widening and strengthening of the road with bituminous concrete did not attract service tax under maintenance or repair services. The cross-objection filed by the respondent was also disposed of as part of the judgment. The order was dictated and pronounced in an open court setting.