2023 (4) TMI 1132 - AT - Service Tax

Levy of service tax - Works Contract Service - Construction of canals, water pipeline works etc., under EPC mode for state governments - Road works, earthwork and works to NTPC - Goods Transport Agency (GTA) service - Interest on short paid GTA - Renting of Immovable Property (RIPS). Construction of canals and water pipelines works etc. - HELD THAT - From the Table given in the Show Cause Notice and Order-in-Original, it is seen that in respect of the 12 projects, the works undertaken by the Appellant are on account of various canal and other pipeline projects undertaken by them by way of Tender and Contract awarded by the Government of Andhra Pradesh. There is no dispute that the works have been rendered only to the Government of Andhra Pradesh. The Larger Bench in the case of M/S. LANCO INFRATECH LTD. AND OTHERS VERSUS VERSUS CC, CE ST, HYDERABAD 2015 (5) TMI 37 - CESTAT BANGALORE (LB) held that Construction of canals for irrigation or water supply; construction or laying of pipelines/ conduits for lift irrigation conceived and integrated into a dam project, must be classified as works contract in respect of dam and is thus excluded from the scope of Works Contract Service defined in Section 65(105)(zzzza) of the Act, in view of the exclusionary clause in the provision - thus, the demand, interest and penalty in respect of Service Tax demand on construction of canals and water pipelines works etc., carried out for the State Government along with interest and penalty. Works undertaken for NTPC - HELD THAT - The Appellant should work out the value of services rendered along with the Service Tax demand thereon, based on all the documents available with them. After this, if they take the stand that Service Tax is not payable on any activity undertaken for NTPC, the same should be brought out along with documentary evidence supported by statutory provisions before the Adjudicating Authority - The confirmed demand in respect of NTPC transaction alone is remanded to the Adjudicating Authority to verify all the documentary evidence to be produced by the Appellant on the above counts. The final amount of demand on account of NTPC transaction will be arrived at by the Adjudicating Authority, which is required to be paid by the Appellant along with interest and penalty @ of 25% of the confirmed amount - matter on remand. Demand on account of GTA services - HELD THAT - It is seen that when the opportunity was given to the Appellant at the Adjudication stage to come up with all their submissions along with documentary evidence, the Appellant has not done so. They should have produced the documentary evidence to the effect that some of the freight charges were incurred on account of GTO and as to how the same was exempted from Service Tax, if any. Instead of making such detailed submission along with documentary evidence, the Appellant was simply questioning the quantification which has been correctly done by the Department based on the Profit Loss Account figures of the Appellant. The Appellant does not dispute the figures taken from the Profit Loss Account. Therefore, there are no merits in the present Appeal with regard to the confirmed demand of Rs. 11,23,161/- on GTA Services - demand set aside. Renting of Immovable Property - HELD THAT - In the absence of any evidence forthcoming that the property has been leased out for residential purpose, the Appellant is required to pay the Service Tax. The amendment carried out with retrospective effect from 01.06.2007 has no impact in the present case - The Appeal in respect of confirmed demand of Rs. 2,19,513/- towards Renting of Immovable Property is dismissed. Appeal allowed in part.

Summary

Issues Involved:
1. Construction of canals, water pipeline works, etc., under EPC mode for state governments and NTPC.
2. Goods Transport Agency (GTA) service.
3. Renting of Immovable Property (RIPS).
4. Late fee for filing returns late.

Summary:

1. Construction of Canals, Water Pipeline Works, etc., under EPC mode for State Governments and NTPC:
The Appellant, an infrastructure company, provided Works Contract services, including construction of canals and water pipelines for the State of Andhra Pradesh and NTPC. The confirmed demand of Rs. 11,29,88,318/- was challenged, citing the Larger Bench decision in Lanco Infratech Ltd. vs. CC, CE & ST, Hyderabad [2015 (38) STR 709 Tri-LB], which exempts canal works and other government projects from Service Tax. The Tribunal set aside the demand for the 12 government projects but remanded the NTPC-related demand to the Adjudicating Authority for proper quantification and verification of exemption eligibility.

2. Goods Transport Agency (GTA) Service:
The demand of Rs. 11,23,161/- along with interest of Rs. 10,48,178/- was confirmed. The Appellant argued that services were received from Good Transport Operators (GTO) who are not GTAs and requested a remand for verification. The Tribunal dismissed the appeal, noting the Appellant's failure to provide documentary evidence at the Adjudication stage.

3. Renting of Immovable Property (RIPS):
The confirmed demand of Rs. 2,19,513/- was challenged on the grounds of retrospective amendment and use of property for residential purposes. The Tribunal dismissed the appeal, stating that the property was used for commercial purposes and the retrospective amendment did not impact the demand.

4. Late Fee for Filing Returns Late:
The Appellant did not contest the late fee of Rs. 12,600/-, and the appeal on this issue was dismissed.

Conclusion:
The appeal was partly allowed:
- Construction of Canal/Pipeline for Government Projects: Allowed for 12 government projects; remanded for NTPC project.
- GTA Services: Dismissed.
- Interest on GTA: Dismissed.
- Renting of Immovable Property: Dismissed.
- Late Fee: Dismissed.