2019 (5) TMI 1488 - AT - Service Tax

Validity of SCN - Works contract service - Demand of service tax - HELD THAT - The learned Commissioner (Appeals) has not relied on the decision in the case of MS DEORA ELECTRIC WORKS VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX- ALLAHABAD 2017 (10) TMI 84 - CESTAT ALLAHABAD and given his independent finding on the basis of fact and law. Therefore, the said ground raised by revenue is not sustainable. Further, the other ground raised by revenue which is in respect of finding by Original Authority and the same has been adjudicated by learned Commissioner (Appeals) and since the finding of learned Commissioner (Appeals) has not been challenged on the basis of any infirmity in the same the other ground also does not sustain. Appeal dismissed - decided against Revenue.

Summary

Issues:
- Common impugned Order-in-Appeal covering two appeals filed by revenue for service tax demands in financial years 2012-13 and 2013-14.
- Exclusion of railways from the levy of service tax under "work contracts service."
- Exemption under entry no.12 for services provided to governmental authorities by way of construction, erection, etc.
- Threshold exemption limit eligibility for the appellant in financial years 2012-13 and 2013-14.
- Reference to an earlier Tribunal's Final Order dated 25.09.2017 and its impact on the present case.

Analysis:
1. The judgment of the Appellate Tribunal CESTAT ALLAHABAD pertains to two appeals filed by the revenue concerning service tax demands for the financial years 2012-13 and 2013-14. The appeals arose from a common impugned Order-in-Appeal issued by the Commissioner of Central Excise & Customs (Appeals), Lucknow. The appeals were consolidated for a joint decision.

2. The key issue addressed in the judgment was the exclusion of railways from the levy of service tax under "work contracts service." The Commissioner (Appeals) considered the services provided to Military Engineering Services (MES) and concluded that they were not for commercial or industrial purposes, thus not falling under taxable services as defined by the relevant Act.

3. The judgment discussed the exemption under entry no.12, which exempts services provided to governmental authorities by way of construction, erection, etc. It was highlighted that the exemption covered original works meant predominantly for non-commercial or non-industrial use, including construction for defense forces. The exemption also encompassed services related to railways, monorails, or metros.

4. Another significant aspect addressed in the judgment was the appellant's eligibility for the threshold exemption limit in the financial years 2012-13 and 2013-14. The appellant's taxable amounts for the respective years were below the threshold limit, making them eligible for the exemption. Reference was made to the appellant's gross turnover in the preceding year to support the eligibility claim.

5. Additionally, the judgment referred to a previous Final Order of the Tribunal dated 25.09.2017, which had set aside an earlier demand due to a vague and incomprehensible show cause notice. The revenue challenged the reliance on this Final Order, stating it was under review by the High Court. However, the Commissioner (Appeals) independently analyzed the facts and laws, not solely relying on the previous Order. As the findings of the Commissioner (Appeals) were not contested for any infirmity, the appeal by the revenue was rejected, and the impugned Order-in-Appeal was upheld.

6. In conclusion, the judgment provided a detailed analysis of the issues concerning service tax demands, exemptions, and eligibility criteria, ultimately upholding the decision of the Commissioner (Appeals) and rejecting the revenue's appeal based on the independent findings and legal interpretations presented.