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TMI Blog2025 (3) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivities, 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, is exempt from the whole of service tax leviable thereon under section 66 of the said Finance Act, 1994. However, we find that the Ld. Commissioner has not extended the benefit of the said notification on the ground that the road constructed is not for the use of general public. In this regard, it is observed that construction of road being private or public is not the criterion for eligibility to the benefit under Notification No.17/2005-ST dated June 7, 2005. The Ld. Commissioner erred in distinguishing the roads being public or private while examining the eligibility to Notification No.17/2005-ST dated June 7, 2005 when no such criteria is present is the body of the said notification. Accordingly, it is held that by virtue of N/n. 17/2005-ST dt. 07.06.2005 the appellant is eligible for the exemption provided for the 'Site formation and clearance, excavation and earthmoving and demolition' and such other similar activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illong, Meghalaya (hereinafter referred to as the "appellant") against the Order-in-Original/ST/SHILLONG No. 06/2013 dated 25.06.2013 wherein the ld. adjudicating authority has confirmed the demand of Service Tax (inclusive of cesses) totally amounting to Rs.75,32,597/-, along with interest, and imposed equal amount of tax as penalty under Section 78 of the Finance Act, 1994. A penalty of Rs.5,000/- has also been imposed under Section 77 of the Finance Act, 1994. 2. The facts of the case are that during the period from 2007-08 to 2008-09, the appellant had undertaken contract for construction of approach road to the plant site of M/s. JUD Cements (P) Limited, Meghalaya. In the process of construction of approach road to the plant, the appellant also acquired some land as a 'pure agent' of the cement plant. 2.1. The Department initiated an investigation against the appellant on the allegation that the appellant had not obtained Service Tax Registration and had not discharged Service Tax on the taxable services rendered to M/s. JUD Cements (P) Ltd. On the basis of the investigation, a Show Cause Notice dated 19.10.2012 was issued and after due process, the said notice was adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat construction of road as well as development activities for construction of road are exempted from the purview of the service tax and the amount of Rs. 4,17,89,638/-which is pertaining to the service of construction of road as well as development activities for construction of road should not form part of the value of taxable service. * By virtue of Notification No. 17/2005 ST Dt. 07.06.2005 '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, is exempt from the whole of service tax leviable thereon under section 66 of the said Finance Act, 1994. * The Ld. Commissioner failed to consider that construction of road whether public or private is not the criterion for getting the benefit under notification No.17/2005-ST dated June 7, 2005. The criterion for exemption is that the activity of construction of road should be taken on the basis of separate recognizable contract. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,08,01,562/- to M/s. JUD Cements (P) Ltd., but in the impugned order, the ld. adjudicating authority considered only an amount of Rs.1,60,85,351/- and thus, it has been contended that the additional amount of Rs.47,16,209/- is liable to be deducted from the taxable value. We observe that this needs to be verified by the ld. adjudicating Authority and for that purpose, the issue needs to be remanded back to the adjudicating authority. 6.2. We also observe that the appellant claims to have received Rs.4,17,89,638/- in the year 2007-08 towards construction of road, which is specifically exempted from the purview of Service Tax. They have cited the Letter F.No.B1/6/2005-TRU dated July 27, 2005 in support of this contention. In support of the view that road construction is not liable to Service Tax, the appellant has also placed reliance on the decision in the case of M/s. Rajendra Singh Bhamboo vs Commissioner of Central Excise and Service Tax, Jaipur-I [Final Order No. 50968 of 2018 dated 13.03.2018 in Service Tax Appeal No. 55339 of 2013 - CESTAT, New Delhi] wherein while examining the definition of Commercial and Industrial Construction Service under Section 65(105)(zzq) of the Fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said Finance Act. 2. This notification shall come into force on the 16th day of June, 2005." 6.3.1. From the Notification No. 17/2005-ST dated 07.06.2005 reproduced supra, we observe that by virtue of the same, '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, is exempt from the whole of service tax leviable thereon under section 66 of the said Finance Act, 1994. However, we find that the Ld. Commissioner has not extended the benefit of the said notification on the ground that the road constructed is not for the use of general public. In this regard, we observe that construction of road being private or public is not the criterion for eligibility to the benefit under Notification No.17/2005-ST dated June 7, 2005. The criterion for exemption is that the activity of construction of road should be undertaken on the basis of a separate recognizable contract. The Ld. Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements (P) Ltd. as 'unsecured loan' and hence it is their contention that no service tax is payable on this amount as they have not received the said amount. In this regard, we agree with the submission of the appellant. During the relevant period, Service Tax is payable only on the amount received by the appellant. However, the claim of the appellant that they have not received the amount of Rs.47,41,968/-, needs to be verified by the ld. adjudicating authority and for that purpose, the issue is also required to be remanded back to the adjudicating authority. 8. Regarding the penalty imposed on the appellant, we observe that the service tax liability is to be re-quantified as per the discussions in the previous paragraphs and hence, the demand of Service Tax along with interest and penalty confirmed in the impugned order is set aside. On re-quantification of their Service Tax liability, the adjudicating authority may decide the liability of penalty, if any required, afresh, based on his findings. 9. Further, we observe that the appellant has claimed that they have already deposited Service Tax to the tune of Rs.13,14,171/- along with interest of Rs.10,26,264/-. This needs to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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