2023 (8) TMI 1492 - AT - Service Tax

Short payment of service tax - management, maintenance and repair of the road - taxability in terms of section 97 of the Finance Act, 2012 - repair and maintenance of roads - exemption vide Notification No.24/2009-ST dated 27.07.2009 from 16.06.2005 to 26.07.2009 or not. Repair and maintenance of roads - exemption vide Notification No.24/2009-ST dated 27.07.2009 from 16.06.2005 to 26.07.2009 or not - HELD THAT - The merit classification of the construction services rendered by the appellant were along with supply and service both under a composite contract. In that circumstances, merit classification is works contract service and no demand has been raised under works contract service , therefore, the demand of service tax is not sustainable against the appellant. Management, maintenance and repair of the road - taxability in terms of section 97 of the Finance Act, 2012 - HELD THAT - The said service has already been exempted by the Finance Act, 2012, therefore, on the said service, the appellant is not liable to pay service tax. There are no merit in the impugned order. Therefore, the same is set aside and the appeal filed by the appellant is allowed.

Summary

Issues:
Appeal against demand of service tax for the period April 2005 to March 2010 - Classification of services provided - Applicability of service tax on management, maintenance, and repair of roads.

Analysis:
The appellant contested a show cause notice for the demand of service tax, arguing that the services provided were exempt from tax under Notification No.24/2009-ST. The appellant claimed that the activity of management, maintenance, and repair of roads falls under this exemption. Additionally, the appellant argued that the services rendered were under a works contract service, which became taxable from 01.06.2007. Citing precedent cases, the appellant contended that demand under 'construction of commercial and industrial service' was not sustainable. The Tribunal agreed with the appellant, holding that the services provided were under a composite contract, classified as works contract service. Consequently, the demand for service tax was deemed unsustainable.

The Tribunal also addressed the issue of management and maintenance of roads, noting that this service had been exempted by the Finance Act, 2012. As a result, the appellant was not liable to pay service tax on these specific services. Ultimately, the Tribunal found no merit in the impugned order and set it aside, allowing the appeal filed by the appellant with any consequential relief. The operative part of the order was pronounced in the open Court, bringing the case to a close.