2013 (10) TMI 817 - AT - Service Tax

Demand of service tax - Service of repair of roads - Exemption u/s 97 - Held that - retrospective exemption benefit has been extended in respect of Management, Maintenance or Repair Service of roads. Prima facie, we are unable to accept the findings of the Commissioner that the said benefit of exemption is available only for repair or relaying of public roads. On plain reading of Section 97(1) of Finance Act, 2012, it is clear that no service tax is leviable in respect of repair of roads for the period 16.6.2006 to 26.6.2009. It is well settled that the language of the exemption notification should not be strained in order to impose tax and if the legislation intended, it would be covered by appropriate words. There is no room for intendment. It is also noticed that the demand in respect of JCB / Dipper charges are also under the category of Management, Maintenance and Repair Service of roads which is included in the above exemption benefit. Section 97 of Finance Act, 2012 had extended benefit of retrospective exemption for certain period particularly for repair of roads only and it cannot be compared with the definition of Commercial or Industrial Construction Service - Decided in favour of assessee. Waiver of pre deposit - Held that - applicant has made out a prima facie case for waiver of predeposit of demand of tax under the category of Management, Maintenance and Repair Service of roads. However, the applicant is liable to predeposit Rs.6,73,598/- demanded under the category of Site Formation and Maintenance . Accordingly, we direct the applicant to predeposit Rs.6,73,598/- (Rupees six lakhs seventy three thousand five hundred and ninety eight only) within a period of six weeks and report compliance on 6.9.2013. Upon such deposit, predeposit of the balance dues stands waived and recovery thereof stayed during the pendency of the appeal.

Summary

Issues:
Demand of tax for repair of roads, retrospective exemption under Section 97 of the Finance Act, 2012, applicability of exemption to services provided to private individuals, liability for JCB/tipper charges, interpretation of Section 97(1) of the Finance Act, 2012, comparison with the case law of Larsen & Toubro Ltd.

Analysis:
The judgment deals with a case involving a demand of tax amounting to Rs.1,07,04,221/- for the period 16.6.2005 to 31.3.2009, related to the service of repair of roads. The main contention revolves around the applicability of the retrospective exemption provided under Section 97 of the Finance Act, 2012 to the services rendered by the applicant. The appellant argues that the exemption covers Management, Maintenance, and Repair of roads without any restriction on whether the services are for public or private roads. The Commissioner, however, denied the benefit of exemption, claiming it is only available for repairs of public roads, not private ones.

Upon reviewing the contentions of both sides and examining the relevant provisions, the Tribunal notes that Section 97(1) of the Finance Act, 2012 explicitly exempts the levy of service tax in respect of repair of roads for the specified period. The Tribunal emphasizes that the language of the exemption notification should not be strained to impose tax, and the legislative intent is crucial. It is observed that the demand related to JCB/tipper charges also falls under the category of Management, Maintenance, and Repair Service of roads, thus qualifying for the exemption benefit.

Regarding the case law reference to Larsen & Toubro Ltd., the Tribunal distinguishes the context and applicability of the exemption under Section 97 of the Finance Act, 2012 from the case involving commercial or industrial construction services. The Tribunal clarifies that the retrospective exemption for repair of roads cannot be equated with the exclusion of certain facilities under a different service category. Consequently, the Tribunal finds that the applicant has established a prima facie case for the waiver of predeposit of tax demand under the Management, Maintenance, and Repair Service category for roads. However, the applicant is directed to predeposit the amount demanded under the category of Site Formation and Maintenance while the balance dues are waived upon compliance.

In conclusion, the Tribunal upholds the exemption benefit under Section 97 of the Finance Act, 2012 for the repair of roads, rejects the Commissioner's interpretation limiting it to public roads, and directs the applicant to predeposit the specified amount within the stipulated period.