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TMI Blog2016 (7) TMI 784X X X X Extracts X X X X X X X X Extracts X X X X ..... ided by a stock-broker, to a policy holder by an insurer, by an advertising agency, by a courier agency etc. and when it came to service in relation to management, maintenance or repair, the legislature was free to tax it. Merely because repairs of roads and airports is specifically excluded from the definition of “commercial or industrial construction” it could still be brought in under the category of “management, maintenance or repair service”. Ultimately, management, maintenance or repair is defined to mean any service provided by any person under a contract or an agreement for a manufacturer or any person authorised by him in relation to management of properties, whether immovable or not, maintenance or repair of properties, whether immovable or not or maintenance or repair including reconditioning on restoration, or servicing of any goods, excluding a motor vehicle. Eventually, in inserting and incorporating definitions so as to understand taxable service if management, maintenance or repair is taken to be a distinct service and that aspect is excluded from the definition of the term “commercial or industrial construction service”, then, it is not a case of redundancy or r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch, 2016 and after both sides consented, we indicted to them that the writ petition itself will be disposed of finally at the stage of interim relief. Hence, by consent of both sides, we heard the matters and are disposing them of finally by this judgment. 3. The writ petition is directed against the order-in-original dated 28th November, 2014 passed by respondent no. 2. 4. The petitioner is a company incorporated under the Indian Companies Act, 1956, having registered office at the address mentioned in the cause title. The first respondent is Union of India and the second respondent is the Commissioner of Central Excise, Customs and Service Tax, Nagpur. The petitioner is holding Service Tax Registration No. AACCD1376KST001 under the categories of Transportation of Goods by Roads and Site Formation and Clearance, Excavation and Earth Moving and Demolition Service 5. The petitioner is inter alia engaged in the business of:- (i) Construction of roads for NHAI (National Highway Authority of India), CPWD (Central Public Works Department) and NMC (Nagpur Municipal Corporation). (ii) Construction of runways for Airport Authority of India Ltd. (iii) Strengthening r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered in respect of roads and airports were excluded from the levy of service tax and therefore, the same could not be levied under the category of management, maintenance and repair service. (ii) Amongst the various activities covered by the show cause notice were services of excavation and earth work carried out in respect of roads, which were totally exempt from service tax by Notification No. 17 of 2005-Service Tax, dated 7th June, 2005. (iii) Service tax was demanded on the gross receipts without allowing the cum-tax benefit in terms of section 67(2) of the Act. (iv) The Board's circular was prospective in effect and based on such circular, demand of service tax could not be raised for the past period. (v) The Board's circular dated 24th February, 2009 being an oppressive circular, had only prospective effect. (vi) The extended period of limitation under proviso to section 73(1) of the Act could not be invoked because the Department itself was in doubt about the taxability of the various activities in relation to road as was apparent from the Board's circular which was issued on a representation made by the Nasik Commissionerate and because the det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herewith for ready reference:- SECTION 97. Special provision for exemption in certain cases relating to management, etc. of roads. - (1) Notwithstanding anything contained in section 66, no service tax shall be levied or collected in respect of management, maintenance or repair of roads, during the period on and from the 16th day of June, 2005 to the 26th day of July, 2009 (both days inclusive) ..... SECTION 98. Special provision for exemption in certain cases relating to management, etc., of non- commercial Government buildings. - (1) Notwithstanding anything contained in section 66, no service tax shall be levied or collected in respect of management, maintenance or repair of non- commercial Government buildings, during the period on and from the 16th day of June, 2005 till the date on which section 66B comes into force .. 18. The aforesaid stay application came up for hearing before the appellate tribunal on 30th July, 2012. The petitioner appeared for hearing and submitted that it is not liable to pay service tax. 19. However, after hearing both sides, the appellate tribunal, vide Stay Order No. S/1059/12/CSTB/C-II dated 30th July, 2012 directed the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers preferred an appeal, namely, central Excise Appeal No. 51 of 2014 before this court. 26. The aforesaid appeal came up for admission before this court on 13th February, 2015 and this court admitted the appeal on the following substantial questions of law:- (a) Whether in the facts and circumstances of the present case, the impugned order passed by the appellate tribunal holding that the activities pertaining to runway will not be entitled for exemption in terms of section 97 and 98 of the Finance Act is sustainable in law? (b) Whether in the facts and circumstances of the case, the activity of repair and maintenance of runway undertaken by the petitioners will be taxable under management, maintenance or repair service, even when it is specifically excluded from the scope of commercial or industrial construction service ? 27. A memorandum vide F. No. IV (16) 30-192/ST/Adj./ 2010/ 6195-6196 dated 2nd May, 2014 was issued by the Superintendent to the petitioner to submit written submissions and appear for personal hearing. The petitioner, vide letter dated 20th May, 2014, informed respondent no. 2 that the appeal filed by the petitioner against the appellate tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nable to explain its case in the absence of such a breakup, then, the impugned order is ex-facie perverse. 33. Elaborating this argument further, Mr. Sridharan would submit that the show cause notice does not indicate as to how the activity undertaken by the petitioner and which is sought to be taxed by the Department falls under the definition of management, maintenance and repair service , construction of commercial complex service and site formation and excavation service as defined under the Finance Act, 1994. The service provided by the service provider, which is sought to be taxed is the core of any show cause notice. The petitioner submits that the activity undertaken by the petitioner does not fall under taxable head of management, maintenance and repair service , construction of commercial complex service and site formation and excavation service as defined under the Finance Act, 1994. The show cause notice was, therefore, liable to be dropped. Mr.Sridharan submits that it is well settled that the assessee must be put to notice as to the exact nature of the contravention for which he is liable. Mr. Sridharan submits that once the show cause notice does not pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant has duly paid sales tax on all the contracts involved in the present case treating the same as works contract. The same is also duly reflected in the sales tax returns filed by the petitioner/appellant. 37. Mr. Sridharan submits that the specification for construction/repair of road is prescribed by Indian Road Congress (IRC). The same specification is followed for construction/repair of runways as well. The activity of repair and maintenance of runways referred to in the present case involves the runways, which means the strip, where the aircraft lands or takes off. Taxiways are road on which the buses or any other vehicle ply within the airport premises. Apron roads are roads wherein the aircraft moves to the parking area after landing/take off. The method of construction/specification in terms of thickness of the layers and other parameters for all the three portions, namely, runway, taxiway and apron road are the same. Mr. Sridharan submits that upon the show cause dated 14th October, 2010, the initial order-in-original dated 28th October, 2011 was passed confirming the demand. That order was challenged before the CESTAT, Mumbai. During the pendency of the appeal befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 2(b) of the Airport Authority of India Act, 1994, it would be apparent that repairs of road and airport is specifically excluded from the definition of commercial and industrial construction. Once it is so excluded, the same cannot be taxed under any general category of management, maintenance or repair service. Mr. Sridharan submits that specific exclusion from one taxable clause will prevail over general description in another taxable clause. Mr. Sridharan submits that clause 65(25b) of the Finance Act, 1994 inter alia relating to maintenance or management of immovable property is demonstrative of the fact that repair/maintenance is mentioned in both clauses. Thus, rate of tax is otherwise the same for both clauses. Determination of value and all other provisions of Chapter V of the Finance Act, 1994 is identical to both these clauses. If specific exclusion has been granted to the activity of repair and maintenance of roads and airport from the definition of commercial or industrial construction service under section 65(25b) of the Finance Act, 1994, it would be illogical to suggest that it is still covered under taxable head maintenance or repair service . This would r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d therefore, the retrospective exemption given to road under section 97 of the Finance Act indeed applies to runway as well. Mr. Sridharan has relied upon the meaning of the term road as provided in the Chambers Dictionary, 1993 at page 1487. He also relies upon the meaning of term runway as provided in the dictionary and according to him, they refer to nothing but a 'track' suitable for certain types of wheeled vehicles, namely, motor car, bus, aircraft etc. In these circumstances, runway cannot be left out or excluded from this broad concept of road. Mr. Sridharan has relied upon a judgment of a Division Bench of this court in the case of Union of India vs. Authority under the Minimum Wages Act AIR 1969 Bom. 380. 44. It is then contended by Mr. Sridharan that runway is part of airport only. The benefit of section 98, which provides retrospective exemption to repair/maintenance services provided to non-commercial Government buildings, has to be extended to runways of airports as well. Mr. Sridharan would submit that runways, taxiways and apron ways/apron taxi tracks are all parts of building of airport. The building includes not only the land appurtenant thereto but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices. The commissioner held that the activity was performed at a place very far off from the site of construction and was undertaken for excavating the material which was required for road making situated away from the actual place where the road was to be laid. That is why the Commissioner held that the activity in question was done far away from road and does not qualify as exemption under Notification No.17/2005-ST. If that activity was away from the road and did not qualify for exemption, then, it is evident that it will not fall under the category of site formation, excavation service site formation. Even if the activity is recorded as site formation, it is not taxable under Notification No. 17/2005-ST. Mr. Sridharan submits that the Commissioner has not excluded the value of material. The tax is on service. The value of the material is not liable to service tax and should have been excluded. It is incorrect to hold that no evidence is produced. Mr. Sridharan submits that at least for this purpose, the matter should be remanded back to the commissioner. 47. Mr. Sridharan submits that the demand is barred by limitation. The issue in the present case involves interpretation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he show cause notice was issued on the basis of the intelligence gathered. That revealed that the petitioner/appellant is engaged in providing management or repair of goods, equipments or properties service, commercial and industrial construction service and site formation and clearance, excavation and earthmoving and demolition service to various agencies like Airport Authority of India, Municipal Corporation of the City of Nagpur and CPWD etc. The intelligence also revealed that the petitioner is providing services such as repairs and strengthening of roads, improvement and resurfacing of runways, periodical renewal of National Highways etc. and construction of toll plazas to said agencies and receiving crores of rupees for this purpose. 52. After referring to the definition of the above services, as appearing in the Finance Act, 1994, it was alleged that the records of the petitioner for the years 2005-06 to 2009-10 were called for by letters and which were replied by the petitioner/assessee. On scrutiny of all the materials produced, including the statements of the authorised signatory, it is alleged that the activity of strengthening, repairs and black topping of roads is u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that activity of extension/resurfacing, strengthening rendered in connection with runways within the area of airport cannot be equated with a road by relying on this circular. This response of the petitioner is to be found in para 9 of the reply to the show cause notice at page 109 of the paper book. Thereafter, the reply sets out in details as to how service tax could not have been levied in relation to the services rendered and covered by the show cause notice. We need not advert to this reply any further for the simple reason that the contentions raised therein based on some judgments of courts of law have already been referred by us hereinabove. In the order passed on 28th October, 2011, the adjudicating authority reproduced the allegations in the show cause notice and the reply thereto in para 14 of the order and held that the main issues to be decided are whether the activities of the petitioner are classifiable and taxable under the category of site formation, maintenance or repair of property and construction of complex and whether the demand is hit by limitation. Finally, whether the petitioner is liable for payment of interest under section 75 of the Finance Act, 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of the Central Excise Act, 1944 on 24.09.2010 she has inter alia stated that the term ST BT appearing in the contract mean Strengthening and Black Topping of roads. That they had undertaken the work of Resurfacing of Runway, Apron Taxiways and Strengthening of Apron Taxiways and also the work of BT Renewal of certain roads which required relaying the Black topping to the roads e.g. in the case of Sonegaon Bela Sirsi Road. That the work of Short Term Improvement and routine maintenance undertaken by us during the year 2008-09 and 2009-10 for Nagpur-Hyderabad section was a composite contract involving execution of reconstruction of part of damaged road and other ancillary activities to maintain smooth flow of traffic. That the contract for periodical renewal involved a wide scope of work including repairs, renewal, making good damages caused to the road. That they had undertaken the work of repairs of runway at Air Force Station at Bidar and also of strengthening and resurfacing of taxi tracks at Air force Station at Yelahanka. iv. Thus even STBT (Strengthening and Black Topping) was an activity including strengthening of road which clearly falls under the category A (III) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The value of taxable service escaped assessment of service tax on account of the failure to disclose the relevant information to the Central Excise Department. That is how a conclusion was reached that the petitioner had suppressed facts to evade payment of service tax. Therefore, invocation of the extended period of five years is justifiable. The initial order of 2011 placed reliance upon several judgments of the tribunal, in which such a view has been taken. 59. Even on the aspect of interest and penalty, the initial order did not uphold the claim and the contentions of the petitioner. 60. This order was challenged in appeal before the CESTAT, West Zonal Bench, Mumbai. Application for stay was also made and from the record, it appears that an order was passed on the stay application on 30th July, 2012 directing deposit of ₹ 3 crores. That was on the prima facie view as reflected from that order. 61. This order on the stay application was challenged before this court in Central Excise Appeal (L) No. 137 of 2012 and on 29th November, 2012, this appeal was allowed and the interim order of the tribunal was set aside. 62. Thereafter, Appeal No. ST/26/2012, which ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ads. Section 65 is contained in Chapter V of the Finance Act, 1994. Section 65 contains several definitions and we are concerned with clause (105), which defines taxable service to mean any service provided or to be provided to any person by any person in relation to management, maintenance or repair. Then, reliance is placed upon the definition of the term airport as appearing in the Finance Act, 1994. That definition is to be found in section 65 clause (3c). That reads as under:- 65(3c) airport has the meaning assigned to it in clause (b) of section 2 of the Airports Authority of India Act, 1994 (55 of 1994). 67. Then, reliance is placed upon the definition of the airport as appearing in section 2(b) of the Airports Authority of India Act, 1994. that definition reads as under:- 2(b) airport means a landing and taking off area for aircrafts, usually with runways and aircraft maintenance and passenger facilities and includes aerodrome as defined in clause (2) of section 2 of the Aircraft Act, 1934 (22 of 1934). 68. The argument is that the charging section applies both the clauses, namely section 65(64) and section 65(105) uniformly. Mr. Sridharan subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts is specifically excluded from the definition of commercial or industrial construction does not mean that it cannot form part of other taxable service. That apart, if one carefully analyses section 65(25b) of the Finance Act, 1994, it would be apparent that it defines the words or expression commercial or industrial construction . It inter alia means, repair, alteration, renovation, restoration of or similar services in relation to building or civil structure, pipe line or conduit, but that ought to be used or to be used primarily for or occupied or to be occupied primarily with or engaged or to be engaged primarily in commerce or industry, or work intended for commerce or industry. From that service, the legislature excluded services provided in respect of roads, airports, transport terminals etc. The reason is obvious because the section contains a definition. The service provided could be for maintenance of utilities. Such maintenance may also include repairs. Therefore, the legislature thought it fit to bring it within maintenance or repair service under section 65(64) and while doing so, it firstly defined management, maintenance or repair service to mean any service prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r servicing of any goods, excluding a motor vehicle. Mr. Sridharan does not urge that roads and airports are not properties. It is the management of properties as also their maintenance or repairs, irrespective of whether they are immovable or not, which is a management, maintenance or repair service. Once it is taxable, then, whether it is in relation to road or airport is hardly relevant and material for us. It is not for us to sit in judgment over the wisdom of the legislature. We are not concerned with that in this matter. In matters of taxing provisions, the legislature enjoys a very wide latitude and discretion. It need not tax everything to tax something. It is not for the court to probe this part of the legislative action even if it finds that some other way or measure could have been thought of. Mr. Sridharan was unable to point out any legal prohibition either. In such circumstances, we do not think that the submission has any merit. The whole argument proceeds on the logic of the legislature in excluding from one definition the aspect of maintenance or repair and including it in some other definition. In that regard, we find that commercial or industrial construction ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evious statement in writing made by the witness before the police is open to the accused and a question can be posed to him with a view to elicit response and equally by contradicting him by putting to him an earlier statement which does not contain the statement made during the course of trial. The second argument was that the word 'contradiction' is of such wide connotation that it takes in all material omissions and the court can decide whether one such omission has to amount to contradiction only after the question is put, answered and relevant portion or part of it is marked and therefore, no attempt should be made to evolve an arguable principle but the question must be decided at large by the Judge concerned on facts of each case. 72. It is in that context, the Hon'ble Supreme Court, after reproducing both, section 162 of the Cr. P. C. and section 145 of the Indian Evidence Act held that the object of the legislature throughout has been to include the statement of the witnesses made before police during the investigation for being used at the trial for any purpose and the amendments from time to time were only intended to make clear the object and to dispel cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the extent required and forwarded them to the test laboratory. The test laboratory and the sample collection centre had a principal agent relationship. After referring to the basic terms and conditions of this agreement, the tribunal proceeded to consider the argument revolving around the dispute as to whether the service rendered by the collection centre is business auxiliary service or technical test and analysis service . The two definitions have been reproduced in para 4 of the tribunal s order. The argument of the parties and particularly the principal and the collection centre was noted. Thereafter, the argument of the departmental representative also came to be considered. The tribunal held that services rendered by the appellant before it of drawing, processing and forwarding of samples is integral to the testing of those samples. One of the orders impugned before the tribunal also noted that drawing of test sample may form part of test analysis. Therefore, the tribunal held that once they are held to be so integral, then, in the factual situation and the broad scope of the definition brings these services rendered by collection centre within the scope of technical t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances in the reported decisions. For the above reasons, we also distinguish the judgments relied upon, namely, Kerala State Industrial Enterprises Ltd. vs. Commissioner of Central Excise, Customs and Service Tax 2011(28) STR 574 (Ker.) and Meteor Satellite Limited vs. Income Tax Officer, Companies circle-IX, Ahmedabad (1980) 121 ITR 311 (Gujarat). 77. Then, Mr. Sridharan assailed the reasons which are assigned by CESTAT while interpreting section 97 of the Finance Act, 1994. We do not think that Mr. Sridharan s arguments on this point are well founded. This is not a case of the legislature granting exemption from tax as and by way of abundant caution. The legislature has clearly held that the service falling within the purview of section 97 can be brought to tax. It is, therefore, clear that exemption of those services from tax has been granted by exercising a distinct power vesting in the Central Government. It is that distinct power which has been conferred and envisaged in the Central Government by the enactment. Once we do not think that the principle and the maxim relied upon has any application, for that reason, we need not refer to the Principles of Statutory Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nway. Hence, it is no different from a road. We are unable to agree. 81. The reliance placed by Mr. Sridharan on a Division Bench judgment of this court in the case of Union of India vs. Authority under the Minimum Wages Act AIR 1969 Bom. 310 is entirely misplaced. There, the argument on behalf of Union of India was that the orders passed by the authorities under the Minimum Wages Act, 1948 should be quashed and set aside. The facts have been noted in para 2 of this judgment. The competent authority under the Minimum Wages Act held that the word road included a rail road within the meaning of Entry No. 7 in part I of the Schedule to the Minimum Wages Act, 1948 and therefore, he had jurisdiction to entertain and try the application. He directed that the application should proceed on merits. 82. The argument was that respondent no. 2 to 201 before this court were in employment on the construction or maintenance of roads. Construction or maintenance of a railway track is not covered by expression construction or maintenance of roads . Therefore, the Division Bench was required to construe as to whether the term or word road would include maintenance of railway track. One mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to any special meaning that the word any special meaning that the word may bear in any other enactment which has a different subject of enactment and has a different object to be achieved in view. It would, therefore, appear that the construction or maintenance of roads would include construction and maintenance of railway, rail-road or railway tracks. 83. Hence, we are not in agreement with Mr. Sridharan that section 97 should be interpreted as suggested by him. We do not think that for the above reasons any assistance can be derived by the judgment of the Hon ble Surpeme Court of India in the case of Commissioner of Central Excise and Customs, Kerala vs. M/s. Larsen and Toubrao Ltd. Civil Appeal No. 6770 of 2004 decided on 20th August, 2015. There, the issue was whether service tax can be levied on individual works contracts prior to the introduction on 1st June, 2007. The Hon ble Supreme Court concluded that a works contract is a separate species of contract distinct from contracts for services simpliciter recognized by the world of commerce and law as such and have to be taxed separately. It is in the context of such essential controversy that all observations and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is the question before us. We do not think that we are required to find out whether definition of airport itself includes runways and even if they are so included, whether those are contemplated by section 98. Section 98 refers to building services relating to management etc. of non commercial Government buildings. We are not construing the ambit and scope of such services. We are concerned with the excision from the definition of this service the maintenance of road, repair to runway etc. That exclusion is clear. 86. Hence, we restrict the arguments made as above. 87. Even the fourth submission and based on the judgment in the case of Commissioner of Central Excise and Customs, Kerala vs. Larsen and Toubro (supra) cannot be accepted for the reason it is distinguishable on facts. 88. We do not think that the fifth, sixth and seventh submissions, as appearing in that order in the written submissions need detain us. These are based on findings of fact. Once they are relatable to the main contentions and in any event the tax demand as far as site formation and excavation services is concerned has been upheld by observing and holding that it was not exempted under Notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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