TMI Blog2009 (8) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... arthikeyan, Member (T) REPRESENTED BY: Shri Rajesh Kumar , C.A. , for the Appellant. Ms. Sudha Koka, SDR, for the Respondent. [Order per M.V. Ravindran, Member (J)]. - This stay petition is directed against waiver of pre-deposit of the following amounts: Service Tax of Rs. 4,64,75,492/- Penalty of Rs. 4,64,75,492/- u/s 78 Penalty of Rs. 200/- per day or 2% of tax whichever is high u/s 76 Penalty of Rs. 1000/- u/s 77 2. Heard both sides and perused the records. 3. The issue involved in this case is whether the activity of formation or improvement/re-asphalting of the existing roads for National Highway Authority, Public Works Department, KIADB (Karnataka Industrial Area Development Board), KUIDFC (Karnataka Urban Infrastructure Development Finance Corporation), KRDCL (Karnataka Road Development Corporation Ltd.,) etc. is liable for service tax under the category of Management Maintenance or Repair services under the Provisions of the Finance Act, 1994. 4. The undisputed facts are that the appellant herein bid for the contract of the maintenance/management/re-asphalting of the existing roads. The undisputed facts is also that the said reasphalting or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meliorations would not be excluded by it. where a Ry. Co. has to maintain a Railway, I should not at all doubt for a moment that in 'maintaining' it they might use any reasonable improvement. If, for instance, the Ry Were originally fenced with wooden palings and it was sought, when they decayed, to replace them by an iron structure, I should say, that was fully within their power. If the Ry. Was originally made in a deep cutting and it was thought desirable to face the cutting with brick to make it more secure, I should say, that was fair maintenance; and if the Ry. Station was found inconvenient and it was desirable when you came to repair it to alter the arrangement of the rooms or to alter the access or form of access and so to ameliorate at the same time that you repaired, I should, say, all that was within the powers of maintenance given by the legislature. "That is, that you may maintain by keeping in the same state, or you may maintain by keeping in the same state and improving the state.- always bearing in mind that it must be maintenance as distinguished from alteration of purpose". (Per JESSEL, MR. in Sevenoaks Ry. V. L.C. D. Ry. 48 LJ Ch. 513; 11Ch. D625.)]" (emphasis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an or they may be broken up and done over a longer period of time. It is a fact that a road comes into existence at the stage of completion of the first stage, and at each phase of completion of the work the road, become more even and smoother and vehicles playing on these can move with greater comfort. However, the phases are broken up over different periods of time or are done sequentially at one time, they bring into existence a road and merely because the level of comfort of the road is increased in subsequent phases done over separated period of time does not mean that a new road has come into existence at the end of the third phase only. Once an existing road surface is provided by the completion of the first phase and is separated by a period of time in providing the metal ling and providing asphalting, the second and third phase would only go to improve the quality of the road and will be treated as road maintenance. During As phalting a bituminous layer is laid over the base course to ensure that rain water does not damage the base, that moving traffic does not remove the metal and other material. The bituminous layer also provides for dust free and comfortable riding. Kee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able, property". 5. There is also another demand of Rs. 57,371/- towards construction of staff quarters for the new Mangalore Port Trust. 6. As regards the service tax liability on the improvement/reasphaltirig of roads, it is the submission of the learned Chartered Accountant that repair will not fall under the category of management, maintenance or repair services. He submits that this activity is covered under the Works Contract. It has come under the service tax net from 1-6-2007. The works contract in respect of roads are excluded from the purview of the service tax net. He would also draw our attention to the definition of maintenance, management or repair services and submits that the activity undertaken by applicant will not be covered. He would also submit that the decision of this bench in the case of Karnataka Land Army Corpn. Ltd. v. CST, Bangalore [2009 (16) S.T.R. 39 (Tri.-Bang.) = 2009-TIOL-1114-CESTAT-Bang.] and also the decision of the Tribunal in the case Dr lal Path Lab. Pvt. Ltd. v. CCE, Ludhiana [2006 (4) S.T.R. 527] will cover the issue. He submits that all the contracts which are entered by the appellants for the improvement/reashpalting are works contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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