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2023 (9) TMI 1377 - CESTAT KOLKATANon-payment of service tax - Works Contract Service - Erection, Installation and Commissioning Service - Repair and Maintenance Service - reverse charge mechanism - Penalty on Director u/s 78A of the Finance Act, 1994. Works Contract services including sub-contracts in respect of Railways - HELD THAT:- 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" - It is observed that there is no such restriction available in the Notification. A plain reading of the Notification reveals that the exemption is available to all Railways whether it is run by Government or the tracks are laid at private Firms. The exemption notification has a wider impact 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 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. - The balance demand of service tax of Rs. 14.69,556/-,is not sustainable and therefore, the same is set aside. Demand under reverse charge mechanism under the category of "Goods Transport Agency Service", "Legal Consultancy Service", "Repair & Maintenance Service" and Rent a Cab Service" - HELD THAT:- In the SCN only payment of Rs. 17,98,959/-has been considered. The appellant stated that the balance tax of Rs.76,148/-is not payable by them. The Appellant explained the reasons for the same which are detailed 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, the balance tax of Rs.76,148/- is not sustainable and therefore, we set aside the same. Penalty on Director u/s 78A of the Finance Act, 1994 - HELD 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 the same is set aside. No penalty imposable under Section 77(1)(a) of the Finance Act, 1994 and the same is set aside. 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 appropriated in the impugned order, the penalty imposed on the Director under section 78A of the Finance Act, 1994 is set aside. Appeal disposed off.
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