2017 (9) TMI 81 - AT - Service Tax

Site formation and clearances, excavation and earth moving and demolition service - benefit of N/N. 17/2005-S.T., dated 7-6-2005 - the original authority had reservation in extending the benefit of this notification, since, the construction work has been carried out for a private railway and not for the Government railway - Held that - From the notification, it is evident that service provided by any person for construction of roads, airports, railways, transport terminals, bridges, tunnels, dams, ports are exempted from Service Tax. There is no dispute that the activity carried out by the respondent was in connection with construction of railways - the benefit of N/N. 17/2005 is to be extended irrespective of whether the construction has been carried out for private or Government railway - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Challenge to Order-in-Appeal dated 3-4-2013 passed by the Commissioner (Appeals), Raipur regarding Service Tax demand.
2. Interpretation of Notification No. 17/2005-S.T. dated 7-6-2005 for exemption of Service Tax in connection with construction activities related to railways.

Analysis:
1. The appeal was filed by Revenue challenging the Order-in-Appeal dated 3-4-2013 passed by the Commissioner (Appeals), Raipur. The appellant, engaged in services of "Site formation and clearances, excavation and earth moving and demolition services," undertook civil works in the Railway siding of a company. The department issued a show cause notice for demand of Service Tax amounting to &8377;21,10,072 along with interest and penalties. The Original Authority confirmed the demand, but the Commissioner (Appeals) set it aside. The Revenue, aggrieved by the order, filed the present appeal.

2. The nature of work involved "Site formation and clearance, excavation and earthmoving and demolition services" for a private Railway siding. The appellant claimed the benefit of Notification No. 17/2005-S.T., dated 7-6-2005, which exempts certain construction activities related to roads, airports, railways, etc., from Service Tax. The issue was whether the benefit of the notification applied to construction for a private railway. The Commissioner (Appeals) held that the benefit of the notification should be extended regardless of whether the construction was for a private or Government railway. The construction of civil works related to railways and railway siding was deemed exempt from Service Tax under the notification, leading to the dismissal of Revenue's appeal.

This judgment clarifies the application of Notification No. 17/2005-S.T. for exemption of Service Tax in construction activities related to railways, emphasizing that the exemption extends to both private and Government railways. The decision provides guidance on the interpretation of such notifications in the context of specific services rendered, ensuring clarity on tax liabilities in similar cases.