TMI Blog2019 (1) TMI 1441X X X X Extracts X X X X X X X X Extracts X X X X ..... perusal of definition under Section 65(25B) makes it clear that the construction meant not only for building but for any other civil structure or a part thereof. There is no denial on the part of the Department for Ghat ki Guni to be at least a civil structure which otherwise is apparent from the photographs also as are placed on record by the appellant. Resultantly, confirmation of the tax liability as far as the conservation and restoration of Ghat ki Guni is not sustainable. With respect to the several work orders/ contracts executed with respect to construction, widening, renovation or maintenance of the road it is observed from the above definition of Section 65(25B) itself that the same are excluded from the taxability thereof. Though w.e.f. 01.07.2012 the word road for use by general public has been incorporated in the aforesaid provision but to our opinion the said insertion is not affecting the execution of the work contracts/ orders executed by the appellant qua various roads - Perusal clarifies that roads/ drains/ pipelines as executed by the appellant are the roads for use by general public which fall under exclusion part of the definition of Commercial and Indust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r which is mentioned to have been discharged for the entire contract for the purpose. In the given circumstances, for the impugned contract, the appellant as sub contractor cannot be held to have stepped into the shoes of the main contractor. Resultantly, any discharge of tax liability by the main contractor cannot be held as the discharge of the liability of sub contractor. The fact that services provided by such sub contractor are used by the main service provider for completion of his work does not in any way alter the fact of provision of taxable service by a sub contractor. Services provided by sub contractor are in the nature of input services. Service tax is therefore leviable on any taxable service provided whether or not the services are provided by a person in his capacity as a sub contractor or whether or not such services are used as input services. The fact that a given taxable service is intended for use as an input service by another service provider does not alter the taxability of the service provider. Such proposition finds support from the basic rule of cenvat credit and service of a sub contractor may be input service provided for a contractor if there is int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment Agencies/ Departments. The Department on an intelligence gathered by the officers of DGCI, Jaipur called upon the information/ documents from the present appellant vide their office letter dated 29.10.2010 regarding the amount received by them in lieu of services rendered by them to the ADMA and Archaeology and Museum Departments including the copies of balance sheets, income tax/ VAT returns and service tax returns for the financial year 2005-06 to 2009-10. From the information gathered, the Department observed that the appellant was executing works contracts qua various activities as: (i) Repair Maintenance of Heritage Sites (ii) Commercial and Industrial Construction (iii) Construction of Complex Services (iv) Erection, Installation and Commissioning Activities Resultantly, a SCN No. 11540 dated 13.10.2011 was served upon the appellant denying the benefit of Notification No. 12/2003 dated 20.06.2003 due to the failure of the appellant to submit the documentary evidence regarding value of the material sold during the course of provision of service and thus proposing the recovery of service tax amounting to ₹ 3,28,54,033/- alongwith the interest at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ambit of taxability as far as the repair/ restoration services are provided to them. The case laws as relied upon are: DNS Contractor Vs. C.C.E., Delhi I 2015 (51) GST 636; 58 taxmann.com 154 (Cestat, New Delhi) Urvi Construction Vs. C.S.T., Ahmedabad 2010 (17) S.T.R. 302 (Cestat, Ahmedabad). 2.3 It is further submitted that for few of the constructions the appellant was merely a sub contractor and the main contractor was GEA Energy. The tax liability to the extent of ₹ 1,29,43,403/- stands discharged by the main contractor hence the confirmation of demand of service tax upon the sub contractor is not sustainable which being a case of double taxation. The case laws as relied upon are: Global Vectra Helicorp Ltd. Vs. C.S.T., Mumbai II 2016 (42) S.T.R. 118 (Cestat, Mumbai), Madhukar Mittal Vs. C.C.e., Panchkula 2015 (40) S.T.R. 969 (Cestat, Delhi) C.S.T., Mumbai - II Vs. Skypack Service Specilaities Ltd. 2015 (37) S.T.R. 281 (Cestat, Mumbai). 2.4 It is further submitted that cum-tax benefit has not been given to the appellant. The findings of the Adjudicating Authority below are therefore prayed to be set aside. Finally impressing upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcial and Industrial Construction Services as defined under Section 65(25B) is relevant as under: Section 65(25b) defines commercial and industrial construction service as under commercial and industrial construction service means (a) Construction of a new building or a civil structure or a part thereof; or (b) Construction of pipeline or conduit; or (c) Completion and finishing services such as glazing, plastering, painting, floor and wall tilling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services, in relation to building or civil structure; or (d) Repair, alteration, renovation or restoration of, or similar services in relation to, building or civil structure, pipeline or conduit; Which Is i) Used, or to be used, primarily for; or ii) Occupied, or to be occupied, primarily with; or iii) Engaged, or to be engaged, primarily in commerce or industry or work intended for commerce or industry, but does not include such services provided in respect of roads, airports, railways, transpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been incorporated in the aforesaid provision but to our opinion the said insertion is not affecting the execution of the work contracts/ orders executed by the appellant qua various roads. We draw our support from the meaning of general public as given in following Notification No. 25/2012-ST dated 20.06.2012: General public means the body of people at large sufficiently defined by some common quality of public or impersonal nature. The National Road Traffic Act, 1996 defines public road as : public road means any road, street or thoroughfare or any other place (whether a thoroughfare or not) which is commonly used by the public or ay section thereof or to which the public or any section thereof has a right of access and includes (a) The verge of any such road, street or thoroughfare; (b) Any bridge, ferry or drift traversed by any such road, street or thoroughfare, and (c) Any other work or object forming part of or connected with or belonging to such road, street or thoroughfare; Perusal clarifies that roads/ drains/ pipelines as executed by the appellant are the roads for use by general public which fall under exclusion part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction of such complex out of the ambit of such construction and thus from taxability. We draw our support from the case of C.C.E., Aurangabad Vs. Mall Enterprises 2016 (41) S.T.R. 119 (Tri. Mum.) wherein it was held that not only residential complex is designed or laid out by another person are excluded from the definition but also the ones intended for personal use of such person i.e. the owner of the complex. In another case titled as Nithesh Estates Limited Vs. C.C.E., Bangalore 2015 (40) STR 815 wherein it was held that the construction of residential complex for ITC (in that case) intended to provide accommodation built for own employees, it was held that activity was covered by definition of personal use in explanation to Section 65(91A) of Finance Act, 1994. Hence, the assessee s activity falls under exclusion of that Section and as such is excluded from levy of service tax. 7.2 In the present case, the quarters/ residential complexes were got constructed by the appellant for three different Departments of Government of Rajasthan for being used as accommodation for their own employees, the same amounts to personal use . The confirmation of demand qua these servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has already been discharged by the main contractor i.e. M/s GEA. Hence, the appellant sub contractor has wrongly been held liable by the Commissioner qua such payment which stands already made by the main contractor. We draw our support from the case DNS Contractor Vs. C.C.E., Delhi 2015 (51) G.S.T. 636 wherein it was held that where the principal contractor had paid service tax on entire consideration, same demand cannot be enforced on sub contractor. Such demand is barred by the principle of revenue neutrality. The Order to that extent is also therefore set aside. 10. The another line of argument is the entitlement to abetment: Appellant on this issue has submitted that they have executed the works of Erection, Commissioning and Installation which are work contracts in nature as they simultaneously have provided the material used for the said execution. It is impressed upon that the appellants in the given circumstances were entitled for abetment under Notification No. 1/2006 dated 01.03.2006 which has wrongly been denied by the adjudicating authority below. The DR on the other hand, has submitted that Commissioner has given valid reasons about the conditions of the said No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the objective of the statute in making out the provision is the determining factor. Central Board of Excise Customs clearly says that merely procedural lapses be not allowed to defeat the modvat credit benefit, if substantive conditions about payment of duty and user of goods in manufacture of end product in factory are fulfilled. It was held that however substantial benefit should not be denied for the procedural valuation if the substantial liability has been complied with. 10.3 In view of the admitted facts as mentioned above there is sufficient compliance by the appellant qua the substantial liability as laid in the Notification relied upon is concerned. Mere lack of sending an intimation is a procedure which is mere directry. Denying the substantial benefit to the appellant on merely a procedural lapse is unjustified on the part of the adjudicating authority below. In the present case, it is not the contention of the Department that the option for availing the benefit of said Notification has ever been withdrawn prior the completion of the work contract. Resultantly, the absence of intimating the option prior payment of the service tax qua the said work contract is in an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers. In such circumstances, it cannot be held that the liability of appellant as sub contractor is same as the liability of the main contractor which is mentioned to have been discharged for the entire contract for the purpose. In the given circumstances, for the impugned contract, the appellant as sub contractor cannot be held to have stepped into the shoes of the main contractor. Resultantly, any discharge of tax liability by the main contractor cannot be held as the discharge of the liability of sub contractor. The discharge of liability qua contractor and sub contractor has way back been clarified by the Department itself vide their CBEC Circular No. 96/7/2007 ST dated 23.08.2007 vide which it was clarified that sub contractor is essentially a favourable service provider and is liable to pay service tax. The fact that services provided by such sub contractor are used by the main service provider for completion of his work does not in any way alter the fact of provision of taxable service by a sub contractor. Services provided by sub contractor are in the nature of input services. Service tax is therefore leviable on any taxable service provided whether or not the services are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing a sub contractor and also about the work to have been excluded being not for commerce and thus is not liable to pay the tax. In the given circumstances, when there is no malafide intent proved or is not even apparent to evade tax, the penalties under Section 76 and 78 are not at all sustainable. Also, beyond, 10.05.2008 penalties under both the Sections i.e. Section 76 78 cannot co-exist due to the amendment in Section 78. We draw our support from the following case laws: C.C.E., Puduchery Commissionarate Vs. Customs, Excise and Service Tax Appellate Tribunal 2014 (44) G.S.T. 182; 43 taxmann.com 13; 35 S.T.R. 32 (Madras), Bharti Tele Ventures Ltd. Vs. C.C.E., Pune-III 2014 (33) S.T.R. 86 (Cestat, Mumbai), C.C.E., Chandigarh Vs. Patiala Marketing Services (P) Ltd. 2016 53 G.S.T. 412 (Cestat, New Delhi), Pravin N. Shah Vs. Cestat 2014 (305) E.L.T. 480 (Gujarat), Practical Financial Services Pvt. Ltd. Vs. C.C.E. 2016 (41) S.T.R. 683 (Tribunal, Mumbai) 14. As a result of entire above discussion, it is held that Commissioner has been wrong while confirming the proposed demands alongwith interest and the penalties except for the demand confirmed qua ..... X X X X Extracts X X X X X X X X Extracts X X X X
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