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2018 (8) TMI 1228 - AT - Service TaxBusiness Support services - Reverse charge mechanism - Revenue was of the view that appellant was required to pay service tax on the services received from the Railways for construction of siding from Sarai Banjara railway station to Thermal Power Plant under the category of Support services under reverse charge mechanism. Held that:- Railways includes siding also for transportation of public carriage of passengers or goods - Admittedly, in the case in hand, the siding has been required to be constructed for transportation of coal upto the plant of the appellant. Therefore, the siding in question is covered under the definition of Railways. As per Section 21 of the Railways Act, certain sanctions are required for construction of that siding and Section 22 and 23 provide various formalities to be complied with. Therefore, the Railway is required to construct the siding and have to supervise the same and the said properties of railways cannot be interfered by anybody else. In the case in hand, the appellant themselves have constructed the siding under the supervision of the Railways. Therefore, they are required to make payment of mandatory departmental chares, cost of OHE work and D&G charges. It is not disputed that all these charges have been paid by the appellant for various approvals and supervisions by the Railways for construction of siding by the appellant. The said execution of such work cannot be done without mandatory approvals and supervisions by the railways. In that circumstances, in terms of CBEC Education guide 2012, TRU Circular dated 20.06.2012, the services in question cannot be termed as Support Services under Section 65B of the Finance Act, 1994. The activity undertaken by the Railways for granting various approvals and supervision for siding constructed by the appellant are of statutory in nature and is sovereign function of the Railways. Therefore, on that account, the appellant is not liable to pay service tax. Also, the granting of approvals and supervision are in relation to the Railways which is exempted from payment of service tax under N/N. 25/2012- ST dated 20.06.2012 at Serial No. 14A - appellant are not liable to pay service tax. Appeal allowed - decided in favor of appellant.
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