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2019 (6) TMI 779 - AT - Service TaxCommercial or Industrial Construction Service - demand of service tax - HELD THAT - The issue has reached a finality as the lower authority has confirmed the demand and the appellant has not contested it before the first appellate authority and has in fact already paid substantial amount of the demand. Liability of service tax - Management, Maintenance or Repair Service - services rendered by them in re-laying the surface of the roads - HELD THAT - This circular clarifies that when the nature of road itself gets changed, it amounts to construction of a new road. Re-laying of roads, filling pot holes etc., would amount to maintenance or repair activities - the respondent s activity of removing the gravel and laying the surface of the road with their similar material amounts to Maintenance and repair of the road. However, in view of the retrospective amendment vide Section 97 of the Finance Act 1994, w.e.f. 28.05.2012, the services rendered with respect to Maintenance or Repair of roads from 16.06.2005 to 26.07.2009 is not chargeable to service tax and if any amount was collected as service tax on this ground, the same has to be refunded - no service tax is chargeable under Management, Maintenance or Repair service. Appeal dismissed - decided against appellant.
Issues:
1. Demand under Commercial or Industrial Construction Service 2. Demand under Management, Maintenance or Repair Service Analysis: 1. Demand under Commercial or Industrial Construction Service: The appeal was filed against Order-in-Appeal confirming a demand under Commercial or Industrial Construction Service and Management, Maintenance or Repair Service. The lower authority had confirmed a demand under Commercial or Industrial Construction Service and appropriated the amount already paid by the assessee. The first appellate authority set aside the penalties and confirmed the demand under Commercial or Industrial Construction Service along with interest. The Revenue appealed against the order setting aside the demand under Management, Maintenance or Repair Service. 2. Demand under Management, Maintenance or Repair Service: The Revenue contended that the relaying and resurfacing of roads by the appellant should be considered as Management, Maintenance, or Repair of roads, chargeable to service tax. The first appellate authority set aside the demand under this head, leading to the Revenue's appeal. The respondent argued that the activity involved laying a new road, not maintenance or repair, as they removed the entire gravel of the road and laid a new surface. The respondent further invoked Section 97 of the Finance Act, 1994, introduced retrospectively, which exempted service tax on Management, Maintenance, or Repair of roads between 16.06.2005 to 26.07.2009. 3. The Tribunal analyzed the nature of the activity and held that relaying roads, including removing gravel and laying a new surface, constituted Maintenance and repair of the road, not construction of a new road. Referring to Circular No. 110/4/2009-ST, the Tribunal clarified that changing the nature of the road itself, like laying a new road or widening an existing one, falls under construction activities. Therefore, the activity of the respondent fell under Maintenance and repair of the road category. 4. Considering the retrospective amendment under Section 97 of the Finance Act, 1994, the Tribunal concluded that no service tax could be levied on Management, Maintenance, or Repair of roads between 16.06.2005 to 26.07.2009. Consequently, the appeal by the Revenue was rejected, as the period in question fell within the exempted dates. The Tribunal upheld that no service tax was chargeable under Management, Maintenance, or Repair service during the specified period. 5. In summary, the Tribunal dismissed the appeal, emphasizing the distinction between construction activities and maintenance or repair activities concerning road relaying. The retrospective exemption provided under Section 97 of the Finance Act, 1994, shielded the respondent from service tax liability on Management, Maintenance, or Repair of roads during the stipulated period, leading to the rejection of the Revenue's appeal.
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