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2019 (5) TMI 376 - AT - Service TaxCommercial or Industrial Construction Service - Works Contract Service for construction of railway sidings/tracks - composite contracts - demand of service tax - period from October 2004 to June 2007 - demand of interest on amount collected as service tax but not deposited - HELD THAT:- The execution of works in respect of roads, Airports, Railways, Transport Terminals, bridges, tunnels, dams and ports are excluded from the purview of levy of the said category of service. The department relies upon the definition of Railways contained in Section 2(31) of the Railways Act 1989. It has to be mentioned that the definition of the services in Section 65(25b) or Section 65(105)(zzzza) does not make any differentiation between a Government railway or a non government railway. These sections merely uses the word ‘railways’. The Railways Act defines government railway under section 2(20). Government railway ‘means a railway owned by the Central Government’. Section 2(25) of the Act defines a ‘non-governmental railway’. It means a railway other than a Government railway. The definition of Commercial or Industrial Construction Service and Works Contract Service contained in Section 65(25b) or Section 65(105)(zzzza) does not state that only these airports, railways, bridges, tunnels owned by government are excluded. In the case of INTERNATIONAL METRO CIVIL CONTRACTORS VERSUS C.S.T. -SERVICE TAX - DELHI [2018 (9) TMI 1073 - CESTAT NEW DELHI], the Tribunal has observed that the works of civil engineering contraction, mechanical and electrical installation, tunnel ventilation and station air conditioning etc. had been in relation to the construction of Delhi Metro Rail Corporation, was not liable to tax. The Tribunal in various decisions has held that Section 65(25b) or Section 65(105)(zzzza) of the Finance Act, 1994 does not use the word ‘railways’ for public carriage or that the railways should be government railways. The definition uses the words “railways” only. Therefore, the execution cannot be restricted to the government railways which are used for public transport of passengers or goods. The demand of service tax under Commercial or Industrial Construction Service or Works Contract Service for the period from October 2004 to June 2007 and August 2007 to October 2009 respectively for construction of railway sidings/tracks cannot sustain and require to be set aside. Demand of Interest - HELD THAT:- Section 73B does not provide for demand of interest in case of any amount collected which is not required to be collected as service tax from any other person as provided in sub clause (2) of Section 73B - the demand of interest in respect of the amounts collected under Commercial or Industrial Construction Service/Works Contract Service and Site Formation and Clearance Service cannot sustain and require to be set aside. Imposition of penalty - HELD THAT:- The appellant has put forward the reasonable cause for failure to pay service tax - it is a fit case to invoke Section 80 of the Act ibid - penalties set aside. Appeal allowed in part.
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