2022 (11) TMI 1043 - AT - Service Tax

Exemption from Service tax - works contract service - Commercial or Industrial Construction Service - Construction of Complex Service - site formation and clearance, excavation, earth moving demolition services - construction work carried out for M/s Gujarat Energy Transmission Corporation Ltd. - construction work of laying of drainage/sewerage pipelines and related work carried out for Ahmedabad Urban Development Authority (AUDA) and Ahmedabad Municipal Corporation (AMC) under the works contract service - construction of commercial complex consisting shops at Jasdan Bus Terminus carried out for Gujarat State Road Transport Corporation Ltd. (GSRTC) - construction of residential complexes carried out for Gujarat State Police Housing Corporation Ltd. - construction work carried out for Navsari Agricultural University - work carried out for M/s Sabarmati River Front Development Corporation Ltd. - principles of natural justice. HELD THAT - As regard the service provided to Gujarat Energy Transmission Corporation Ltd. it is found that such services are exempted from payment of service tax in terms of Notification No. 45/2010 ST dated 20.07.2010. The decisions relied upon by the Appellant in this context also support the claim of appellant, however we do not find any finding on this aspect in impugned order. Similarly from the definition of commercial or industrial construction service defined in Section 65(25b) it is found that the said definition exclude the services provided in respect of road and transport terminals. The definition of residential complex as defined in Section 65(91a) of Finance Act 1994 also does not include a complex which is intended for personal use as residence, the explanation clause of said definition also defined personal use includes permitting the complex for use as residence by another person on rent or without consideration. The Notification No. 17/2005 S.T. dated 07.06.2005 exempts Site Formation and clearance, excavation and demolition and such other similar activities carried out in the course of construction of roads, Airports, Railways, terminal, bridges, tunnels, dams, ports or other ports etc. from the levy of service tax. In respect of other services also appellant claim the service tax exemption. In support of their arguments appellant also produced work orders issued by Ahmedabad Municipal Corporation, Gujarat State Police Housing Corporation Ltd., Navsari Agricultural University, Gujarat State Road Transport Corporation and Sabarmati River Front Development Corporation Ltd. - in the impugned matter the as regard the exemptions appellant also not produced their claim properly before the adjudicating authority with supporting documents. It is seen that the Ld. Commissioner has also not examined the claim of appellant properly, therefore, we find it appropriate to remand the matter to the Commissioner to examine this issue afresh, after taking into consideration the documents/ details /contracts /agreements and judgments relied upon by the appellant in support of service tax exemption. The lower adjudicating authority has not considered all the issues in the light of the legal authorities and judicial pronouncements while deciding the issue - case remanded back to the adjudicating authority for consideration of all the issues and thereafter to pass an order afresh after giving reasonable opportunity to the appellant of being heard - appeal allowed by way of remand.

Summary

Issues Involved:

1. Service tax liability on construction work for Gujarat Energy Transmission Corporation Ltd.
2. Service tax liability on construction of drainage/sewerage pipelines for Ahmedabad Urban Development Authority and Ahmedabad Municipal Corporation.
3. Service tax liability on construction of commercial complex at Jasdan Bus Terminus for Gujarat State Road Transport Corporation Ltd.
4. Service tax liability on construction of residential complexes for Gujarat State Police Housing Corporation Ltd. and Navsari Agricultural University.
5. Service tax liability on site formation and clearance, excavation, earth moving & demolition services for Sabarmati River Front Development Corporation Ltd.

Detailed Analysis:

1. Service Tax on Construction Work for Gujarat Energy Transmission Corporation Ltd.:

The appellant argued that the construction work for Gujarat Energy Transmission Corporation Ltd. (GETCO) is exempt from service tax under Notification No. 45/2010-ST dated 20.07.2010, which exempts services related to the distribution or transmission of electricity. The appellant relied on several judgments to support this claim. The Tribunal found merit in this argument but noted that the impugned order did not address this exemption. The matter was remanded for reconsideration with the direction to examine the exemption claim properly.

2. Service Tax on Construction of Drainage/Sewerage Pipelines:

The appellant contended that the construction of drainage/sewerage pipelines for Ahmedabad Urban Development Authority (AUDA) and Ahmedabad Municipal Corporation (AMC) is non-commercial and thus exempt from service tax under the works contract service category. The respondent argued that since AMC charges fees from users, the service is not sovereign or philanthropic and is liable for service tax. The Tribunal noted the appellant's claim and remanded the matter for a thorough examination of the exemption claim.

3. Service Tax on Construction of Commercial Complex at Jasdan Bus Terminus:

The appellant argued that the construction of the bus terminal for Gujarat State Road Transport Corporation Ltd. (GSRTC) is not commercial in nature and is excluded from the definition of Commercial or Industrial Construction Services under Section 65(25b) of the Finance Act, 1994. They claimed that the proper classification should be under works contract services. The Tribunal found force in the appellant's argument and remanded the matter for reconsideration of the proper classification and exemption claims.

4. Service Tax on Construction of Residential Complexes:

The appellant argued that the construction of residential complexes for Gujarat State Police Housing Corporation Ltd. and Navsari Agricultural University is intended for personal use and thus exempt from service tax under the definition of residential complex in Section 65(91a) of the Finance Act, 1994. The respondent countered that these constructions are not for personal use but are handed over to respective departments or rented out. The Tribunal found merit in the appellant's argument and remanded the matter for a detailed examination of the exemption claims.

5. Service Tax on Site Formation and Clearance, Excavation, Earth Moving & Demolition Services:

The appellant argued that the site formation and excavation services for Sabarmati River Front Development Corporation Ltd. are directly related to road construction and thus exempt from service tax under Notification No. 17/2005-ST dated 07.06.2005. The respondent maintained that the services fall under the taxable category of site formation and clearance. The Tribunal noted the appellant's claim and remanded the matter for a thorough examination of the exemption claim.

Conclusion:

The Tribunal found that the lower adjudicating authority did not properly consider the appellant's exemption claims and supporting documents. The impugned order was set aside, and the case was remanded to the adjudicating authority for a fresh examination of all issues, considering the legal authorities and judicial pronouncements. The appeal was disposed of by way of remand, with directions to provide the appellant a reasonable opportunity to present their case.