2023 (9) TMI 454 - AT - Service Tax

Levy of Service Tax - works contract service - activity for railway tracks and other support structures etc. for NTPC, Bihar State Power Generation Company Limited (BSPGCL), Kanti Bijli Utpadan Nigam Limited (KBUNL), BTPS and SAIL - exemption N/N.17/2005-ST dated 07.06.2005 and under Clause 14 (a) of exemption N/N. 25/2012-ST dated 20.06.2012 - HELD THAT - The same issue came up before this Tribunal in the case of Konkan Railway Corporation Limited 2023 (2) TMI 1175 - CESTAT MUMBAI , wherein this Tribunal has observed that The Railways Act, 1989 was enacted to authorize Government of India to operate the railway network of the country; it also affords a framework for administration of the railway services and jurisdictional monopoly. The taxable service in Finance Act, 1994 excluding railways from the ambit of the service did not place any restriction on benefit going to private railways. The statute, 10 ST/86191/2021 too, did not consider it necessary to fall back on the definition of railways in another statute for determination of taxability and it is not open to the adjudicating authority to arrogate that privilege in an executive capacity. The intent of exclusion prior to 1st July 2012, and exemption for the period, thereafter, is abundantly clear. The issue is no more res-integra and the appellant is entitled for benefit of Notification No.17/2005-ST dated 07.06.2005 prior to 01.07.2012 and under Notification No.25/2012-ST dated 20.06.2012 for the period post 01.07.2012. There are no merit in the impugned order and the same is set aside - appeal allowed.

Summary

Issues involved:
The judgment involves the issue of demanding service tax for construction of railway tracks and other support structures under the category of "Works Contract Service" for various entities, along with interest and penalty under the Finance Act, 1994.

Details of the Judgment:

1. The appellant appealed against the order demanding service tax for constructing railway tracks and sidings for specific entities under the category of "Works Contract Service." The appellant argued for exemption under relevant notifications.

2. The appellant contended that the activity was exempted under specific notifications both before and after July 1, 2012. They relied on a previous tribunal decision to support their claim.

3. The Revenue argued that the activity falls under "works contract service" and is liable for service tax, questioning whether private railways can be exempted under the relevant notification.

4. The Tribunal considered the submissions and noted a similar issue in a previous case involving Konkan Railway Corporation Limited.

5. The Tribunal referred to the previous case where it was observed that the exclusion from taxability for "railways" continued, emphasizing the commercial aspect of the activity.

6. The Tribunal further analyzed the intent of the Finance Act, 1994, and the scope of taxable service, concluding that the appellant is entitled to exemption under the relevant notifications.

7. The Tribunal set aside the impugned order, ruling in favor of the appellant and granting consequential relief.

Separate Judgment by the Judges:
The judgment was delivered by Hon'ble Mr. Ashok Jindal, Member (Judicial), and Hon'ble Mr. K. Anpazhakan, Member (Technical).