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TMI Blog2023 (9) TMI 1377X X X X Extracts X X X X X X X X Extracts X X X X ..... act and it is sufficient to cover any infrastructure as Railway. As there is no mention of the fact that the structure has to be used for public carriage, we hold that the exemption is available to all Railway infrastructure. In the case of KONKAN RAILWAY CORPORATION LTD VERSUS COMMISSIONER OF CGST CENTRAL EXCISE [ 2023 (2) TMI 1175 - CESTAT MUMBAI] , the Tribunal has held 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, 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, therefore, is abundantly clear. Thus, the exemption is available to all Railway infrastructures. Accordingly, the demands confirmed are not sustainable. Repair and maintenance service provided to Railways - HELD THAT:- The Appellant has already paid service tax amounting to Rs.45,51,838/- along with interest thereon. For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntant for the Appellant Shri S. Mukhopadhyay , Authorized Representative for the Respondent ORDER PER K. ANPAZHAKAN : The Appellant, M/s MRT Signals Ltd. are engaged in providing Works Contract Service by way of construction of Railway infrastructure such as Erection and Commissioning of Signaling and Telecommunication system of Railway. They also provided the above Works Contract Service on sub-contracting basis and undertake Maintenance or Repair Service in respect of the above services. Further, they received certain services where liability for payment of service tax has arisen on reverse charge basis. 2. Acting on the intelligence that the Appellant has provided Works Contract Service in respect Railways, Sub-Contract Works under Works Contract Service in respect of Railways and Maintenance or Repair of the above contracts, but not paid appropriate service tax on the same, an investigation was initiated by DGCEI, Kolkata Zonal Unit. On the basis of that investigation, a Show Cause Notice dated 24.10.2017 was issued to the Appellant demanding service tax of Rs.4,91,53,613/- including Cess. The Notice also demanded interest and penalties under sections 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be given in the instant case. 4.1. In support of their contention, the Appellants referred the following decisions: (a) Konkan Railway Corporation Ltd. Versus Commissioner of CGST and Central Excise, Mumbai (b) Hari Construction Associates Private Limited Vs. Commissioner of CGST Excise, Patna II (c) Bridge Roof Company (India) Limited Vs. Commissioner of CGST Excise, Kolkata South 5. In respect of the confirmed demand of Rs.60,21,394/- on repair and maintenance service provided to Railways, the Appellants stated that they have paid service tax amounting to Rs.45,51,838/-along with interest thereon. For the balance tax of Rs. 14.69,556/-, the appellants stated that they are not liable to pay the tax, as while determining the tax payable, the abatement benefits as provided under Rule 2A of Service Tax (Determination of Value) Rules, 2006 has not been properly considered in respect of the parties M/s Rites (Haldia) and M/s Rites (Chandrapura) and the abatement has been completely denied on the service provided to M/s Bhushan Steel Limited. M/s Rites (Haldia) and M/s Rites (Chandrapura) Works contract service is provided with respect to repair and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gross Amount Opening Balance Considered Valuation Benefit Value Cum Tax Benefit Taxable Value Service Tax Rites Chandrapura 6,07,499 1,82,250 4,25,249 52,561 6,07,499 2,43,000 3,64,499 25,178 3,39,321 41,940 Rites Haldia 84,17,364 25,25,209 58,92,155 7,28,270 84,17,364 33,66,946 50,50,418 3,48,856 47,01,562 5,81,113 Bhusan Steel 170,39,218 - 170,39,218 21,06,047 170,39,218 68,15,687 102,23,531 7,06,187 95,17,344 11,76,344 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2006 3. In case of Bhusan Steel, valuation benefit has been denied on the basis that material is provide. The appellant would like to submit that the material has been provided same can be evident from the work order. Accordingly, the service tax is payable on 60% of the total amount in term of Rule 2A of the Service Tax (Determination of Valuation) Rules, 2006 4. In case of DVC (Mejia), opening balance shown in ledger has also been considered whereas service tax is payable on teh service provided or to be provided during the material period 6. Service tax amounting to Rs. 18,98,620/-was confirmed under reverse charge mechanism under the category of Goods Transport Agency Service , Legal Consultancy Service , Repair Maintenance Service and Rent a Cab Service . Out of Rs. Rs.18,98,620/-,an amount of Rs. 18,22,472/-along with interest thereon has been paid by the appellant. However, in the SCN only payment of Rs. 17,98,959/-has been considered. The Balance tax of Rs.76,148/-is not payable by them due to the following reasons: Service Period Amount Difference Rent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s applicable during the material period. Rs. 16,416/- and Rs.3,899/- is liable to be reduced on account of this. 8. In view of the above submissions, the Appellant prayed for setting aside the demands as discussed above and allow their appeal. 9. The Ld. A.R. reiterated the findings in the impugned order. 10. We observe that service tax including Cess has been confirmed under the following categories in the impugned order. (i) Work Contract Service - Rs. 3,43,31,013 (ii) Erection, Installation and Commissioning Service - Rs.68,80,060 (iii) Repair and Maintenance Service - Rs.60,21,394/- (iv) As recipient of service under RCM - Rs.18,98,620/- 11. In respect of the demands confirmed under Works Contract services including sub-contracts in respect of Railways, mentioned at Sl No. (i) and (ii) in Para 10 above, we observe that the said services are exempted by Notification No.25/2012. The department has interpreted the word Railways in the aforesaid notification and restricted it's meaning to cover only Railways meant for public carriage of passengers or goods . We observe that there is no such restriction available in the Notification. A plain reading of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lway infrastructures. Accordingly, the demands confirmed and mentioned at Sl. No (i) and (ii) supra in Para 10 are not sustainable. 12. In respect of the confirmed demand of Rs.60,21,394/- on repair and maintenance service provided to Railways, we observe that the Appellant has already paid service tax amounting to Rs.45,51,838/- along with interest thereon. For the balance tax of Rs. 14.69,556/-, they stated that they are not liable to pay the tax, as the abatement benefits as provided under Rule 2A of Service Tax (Determination of Value) Rules, 2006 has not been properly considered in respect of the parties M/s Rites (Haldia) and M/s Rites (Chandrapura). The abatement has been completely denied on the service provided to M/s Bhushan Steel Limited. 12.1. M/s Rites (Haldia) and M/s Rites (Chandrapura) We observe that in this case, the Appellant has provided Works contract service with respect to repair and maintenance of an immovable property. In such cases, service tax is payable on 60% of the total amount charged for works contract. In case of M/s Rites (Haldia) and M/s Rites (Chandrapura), the appellant is providing repair and maintenance service of signaling teleco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in their submissions mentioned in Paras 6, 7.1, 7.2 and 7.3 supra. The reasons for the difference is mainly due to wrong adoption of effective rate of RCM, incorrect abatement given to GTA service and incorrect adoption of rate of service tax. We agree with the calculation submitted by the Appellant mentioned in Paras 6, 7.1, 7.2 and 7.3 supra . Accordingly, we hold that the balance tax of Rs.76,148/- is not sustainable and therefore, we set aside the same. 14. In respect of the demands confirmed, we observe that the Appellant has already paid the service tax along with interest and the same has been appropriated in the impugned order. There is no evidence brought on record to establish suppression of fact with an intention to evade payment of tax. Accordingly, we hold that no penalty imposable under section 78 of the Finance Act, 1994 and we set aside the same. No penalty imposable under Section 77(1)(a) of the Finance Act, 1994 and we set aside the same. There is no evidence available to implicate the Director of the Firm in non payment of service tax. As all the demands confirmed in this order has already been paid along with interest and the sane has already been appropri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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