9911796707
TMI Blog2018 (8) TMI 1398X X X X Extracts X X X X X X X X Extracts X X X X ..... en excluded from the scope of the service tax levy both under commercial or industrial construction service and work contract service. Further repairs and maintenance of roads have also been exempted from service tax retrospectively thus the intention of the Government is to keep out road construction activity from the purview of service tax. The exclusion clause for activities regarding construction in relation to road also covers the type of the activities undertaken by the appellant - the service tax is not leviable on the sub-contractor activities undertaken by the appellant for construction of roads - appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the main contractors M/s L&T Ltd., specifies that the appellant was required to undertake following works in relation to the construction of road and bridge/widening of existing road :- i. 'Embankment and Subgrade Excavation of fill-material at borrow area and ii. Transportation of the filling material up to filling - location iii. The filling material namely excavated soil taken out from the borrow land is filled and leveled with rollers to compact it and form embankment' (b) Similarly the letter of intent (LOi) ref. PNP/OTH/2007/ 693 dated 31/07/2007, issued by M/s L&T Ltd. in favour of the appellant, is for the project of widening of existing 4 lane portion on NH-1 near Panipat, Haryana, to 6 lanes and construction of 6 lane elevated structure on BOT basis for NHAI. The letter of intent is issued for "Transportation of BDM/BC mix materials from contractor's plant to work site area, using appellant's dumpers. (c) The Work Order dated 31/07/2007 of M/s IRCON International Ltd. New Delhi issued in favour of the appellant is again for construction of Road in connection with 6 laning of a section of NH-1 near Panipat. The scope of work under the said work order was as bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pressway Road Project. The scope of work under the said work orders was "construction of earthen Subgrade which included excavation in soil, loading, transportation, dumping, grading and compaction, complete work". (ix) The Work Orders dated 30/07/2008, of M/s Unity Infra Projects Ltd. were for widening of Rai-Nahara-Bahadurgarh Road Project. The scope of work under the said work orders was as under :- (i) Dismantling including disposal of unserviceable material (ii) Scarifying the existing bituminous road surface and disposal of scarified material (iii) Excavation in all types of soil in roadway, road shoulders, verge, for widening of carriage way/pavements (iv) Earth work in excavation for foundation of structures in all types of soil (v) Excavation and embankment in layers (vi) Construction of embankment (vii) Loosening of the ground upto level of 500 mm below the subgrade level (viii) Construction of granular sub-base (GSB grade) (ix) Transportation, laying, spreading and compacting graded stone aggregate to wet mix macadam, laying in uniform layer with paver in sub base/base course .. (x) Providing and applying primer coat with bitumen emulsion on pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not include such services provided in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams;" 1.10 It is very clear from the exclusion clause viz., but does not include such services provided in respect of roads… 'that the service provided in respect of roads is not taxable under Section 65 (25b) of the Act. 1.11 Similarly the 'Work Contract Service' under Section 65 (105) (zzzza) of the Act ibid reads as under :- Section 65 (105) "taxable service" means any service provided or to be provided - (zzzza) to any person, by any other person in relation to the execution of a works contract, excluding works contract in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams. Explanation. - For the purposes of this sub-clause, "works contract" means a contract wherein, - (1) transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods, and (ii) such contract is for the purposes of carrying out, (a) erection, commissioning or installation of plant, machinery, equipment or structures, whether pre-fabricated or otherwise, installation of electrical and electronic d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st so to do, hereby exempts the site formation and clearance, excavation and earthmoving and demolition and such other similar activities, referred to in sub-clause (zzza) of clause (105) of section 65 of the Finance Act, provided to any person by any other person in the course of construction of roads, airports, railways, transport terminals, bridges, tunnels, dams, ports or other ports, from the whole of service tax leviable thereon under section 66 of the said Finance Act. This notification shall come into force on the 16th day of 2. June, 2005". 5. It can be seen from the text of the above notification that site formation, clearances, excavation, earth moving and demolition and such other activities pertaining to construction of road are also exempted from levy of service tax. Since, it can be seen from the scope of the work given in various contracts as mentioned in preceding paras that their activities are nothing but are similar or identical to what has been provided in the above notification and, therefore, same are outside the scope of levy of service tax. 6. The learned Advocate has relied upon Hon'ble Supreme Court judgment in the case of Doypack Systems (Pvt.) Ltd. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the construction of road and activities in relation to construction of road are exempted from the scope of levy of service tax. We agree with the argument advanced by the learned Advocate that the activities of the appellant which are in relation to construction of road and highway projects are beyond the scope of levy of service tax by the virtue of exclusions added in the definition of both the service tax categories namely commercial or industrial construction as well as the work contract service. The Hon'ble Karnataka High Court in their judgment in the case of BMR Construction Ltd. vs. Ministry of Finance, Government of India - 2013 (29) S.T.R. 469 (Kar.) has held that any service rendered in relation to the execution of a work contract in respect of railways is excluded under the clause (zzzza) of Section 65 (105) and, therefore it will fall outside the definition of taxable service. Similarly, this Tribunal in its judgment in the case of Ideal Road Builders Pvt. Ltd. vs. CST, Mumbai - 2013 (31) S.T.R. 350 (Tri. - Mumbai) has held that construction of roads has specifically been excluded from the scope of the service tax levy both under commercial or industrial construction s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
