TMI Blog2019 (5) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1994. Further, the payment of ₹ 3,88,63,535/- being the amount collected as service tax by appellants and not deposited with the Government was also confirmed under section 73A of the Finance Act, 1994, along with interest. Aggrieved by such order, the appellants are now before the Tribunal. 2. On behalf of the appellants, Ld. Counsel Shri B. Venugopal appeared and argued the matter. He made oral and written submissions, which can be summarised as under: (a) The demand with respect to various services and the period involved as tabulated by the Counsel for the appellant is as under: Sl. No. Description of service Demand of Service Tax (Rs.) Period involved 1 Commercial or Industrial Construction Service- Section 65(25b) of the Finance Act, 1994. 15,98,761 October 2004 to June 2007 2. Works Contract Service Section 65(105)(zzzza) of the Finance Act, 1994 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said definitions does not say that exclusion is available only for the Government railways. Further, the issue whether the service tax is attracted for Commercial or Industrial Construction services carried out for railway sidings for non government railway was considered by the Tribunal in the case of Afcons Infrastructure Limited Vs. Commissioner of Central Excise, Mumbai-II as reported at [2015(38)S.T.R. 194 (Tri.-Mumbai)]. Similar view was taken in SMS Infrastructure Limited [2017(47)S.T.R 17 (Tri.-Mumbai) and International Metro Civil Contractors as reported in [2019(20)G.S.T.L. 66 (Tri.-Del.)]. He therefore argued that the demand of service tax under the category of Commercial or Industrial Construction Service as well as Works Contract Service for construction of railway sidings/tracks for the period October 2004 to June 2007 as well as August 2007 to October 2009 cannot sustain. It is also argued by the Ld. Counsel that for the period prior to 01.06.2007 being composite contracts, the case of Larsen Toubro Limited as reported in [2015(39)S.T.R 913 (SC) would be applicable and that demand cannot sustain for this reason also. (d) With regard to Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Commissioner of Central Excise, Raipur vs. Anand Construction [2017(51)S.T.R. 435 (Tri.-Del.)]. (g) The Department has raised a demand of ₹ 5,16,672/- under Business Auxiliary Services for the period April 2008 to February 2009. He submitted that the appellant had carried out supervision of earth work in formation of embankment for railway siding and for construction of tipper line etc. to private parties. The Department alleges that the said activities would fall under Business Auxiliary Services. He adverted to the definition of Business Auxiliary Service under Section 65(19) and agreed that the appellant has not provided any service on behalf of the client and therefore the allegation that the activity of supervision for site formation, earth work etc. would not fall under Business Auxiliary Services. The show cause notice does not specify under which limb of the definition the demand of service tax has been proposed. The adjudicating authority has classified the service of supervision carried out by the appellant as falling under the limb of Customer Care Service on behalf of the client . At no stretch of imagination, the supervision service pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibid cannot sustain inasmuch as the confirmation of demand of service tax in the instant case falls within the ambit of sub-section (2) of Section 73A and the provisions of Section 73B are applicable only to the demands confirmed under sub-section (1) of Section 73A as held in Final Order No. A/30061/2019, dated 16.01.2019 in the case of Indu Eastern Province Projects Pvt. Ltd. He prayed that the appeal may be allowed. 3. The Ld. AR Shri A.V.L.N. Chary appeared on behalf of the Department. With regard to the first issue of demand of service tax under Commercial or Industrial Construction Service/Works Contract Service for construction of railway sidings/tracks, the Ld. AR submitted that the exemption of service tax provided in the section for construction of railway sidings is not available to the appellant since the railway sidings are constructed for private parties. He relied upon the definition of Railways given in Section 2(31) of The Railways Act, 1989. The said definition states that Railway means a railway or any portion of a railway, for the public carriage of passengers or goods . Thus, the exclusion is available only for railway sidings which are con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Government are erroneous and cannot be accepted. He prayed that the impugned order may be sustained. 9. Heard both sides. 10. The first issue is with regard to the demand of service tax under Commercial or Industrial Construction Service and Works Contract Service for construction of railway sidings/tracks. The period involved under Commercial or Industrial Construction service is from October 2004 to June 2007. The said services are in the nature of composite contracts which involve both supply of material and rendition of services. Hence the decision of Hon ble Apex Court in the case of Larsen Toubro (supra) would apply and the demand cannot sustain. The demand under Works Contract Service has been raised for the period from August 2007 to October 2009 for the very same activity. The appellant has submitted that the said demand cannot sustain for the reason that construction works related to railways is excluded by the definition. For better appreciation, the definition of Commercial or Industrial Construction Service contained in Section 65(25b) and Works Contract Service contained in Section 65(105)(zzzza) of Finance Act, 1994 is reproduced a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r water proofing, lift and escalator, fire escape staircases or elevators; or (b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry; or (c) construction of a new residential complex or a part thereof; or (d) completion and finishing services, repair, alteration, renovation or restoration of, or similar services, in relation to (b) and (c); or (e) turnkey projects including engineering, procurement and construction or commissioning (EPC) projects; 11. From the above definition, it can be seen 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 use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us to show that the Government examined the matter and came to such a conclusion nor is there any circular or notification issued by the Government in this regard. In the absence of any such decision which is in the public domain, we are unable to accept the contention raised by the Revenue in this regard and reject the same totally. In other words, the law has to be interpreted as it stood, as held by the honble apex Court in the case of Doypack Systems Pvt. Ltd. [1988 (036) ELT 0201 (SC)] wherein it has been held that the notings in the government files are not relevant for interpretation of the statutes and the statute has to be interpreted by the wordings explicitly used therein and if there is no ambiguity in the language used therein, there is no need to refer to the notings in the government file. On that ground also, the observation of the adjudicating authority has no bearing to the facts on hand and has to be rejected. 5.3. The learned adjudicating authority has relied on the definition of Section 65D(O) in the context of transportation of passengers by various modes such as monorail, tramways, metro rails, etc. This definition came into force only w. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. In the case of International Metro Civil Contractors, 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 relevant para is reproduced as under: Seeing from another angle that the services provided by the appellant is the construction of rapid rail corridor which stands excluded otherwise from the tax ambit even of the works contract service. Though it is the case of the Department that the exemption is for railways and the metro corridor do not classify to be called as railways for it being a commercial concern. But this ground has already been adjudicated by Hon ble Apex Court in the case Jagjeet Cotton Textile Mills v. Chief Commercial Superintendent, 1998 (5) S.C.C. (126) wherein the Hon ble Apex Court has held that Delhi Metro Rail is a Government railway as defined in Indian Railway Act. Since Railway also is meant to run on commercial basis, DMRC cannot be distinguished from being called as railways merely on the ground that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctober 2009 respectively for construction of railway sidings/tracks cannot sustain and require to be set aside which we hereby do so. 16. The arguments put forth by the appellant with regard to Consulting Engineer Service and Maintenance or Repair Service is that these services are in relation to construction of railway sidings and therefore the appellants were under the impression that these services are not subject to levy of service tax. On perusal of the definition of Consulting Engineer Service and Maintenance or Repair Service, we do not find any exclusion for services rendered in respect of railways. The confirmation of demand under these two heads are therefore legal and proper. We uphold the demands under these two services. 17. The demand of ₹ 38,51,355/- is confirmed under Site Formation and Clearance Service for the period from August 2006 to July 2008. The appellant has relied upon the Notification No. 17/2005-ST, dated 07.06.2005. The relevant portion of the notification is as under: Notification: 17/2005-S.T., Dated 07 Jun-2005. Site formation and clearance, excavation and demolition services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation - For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, inputs means all goods or services intended for use by the client;] (v) production or processing of goods for, or on behalf of the client; or (vi) provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services , management or supervision. 20. The Ld. Counsel for the appellant is right in his assertion that the show cause notice does not specify under which clause of the definition of Business Auxiliary Service the service tax is proposed. The Commissioner has classified the service as Customer Care Service rendered on behalf of the client . At no stretch of imagination the supervision services cannot be said to be Customer Care services. The Ld. AR for department has submitted that the said activity would be covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be collected. In the absence of any statutory provision, the demand of interest cannot sustain. Thus, 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 which we hereby do. 23. The next issue to be addressed is with regard to the penalties imposed. The demands under Consulting Engineer Service and Maintenance or Repair Services have been upheld by us. The appellant has submitted that they were under much confusion as to whether the services are subject to levy of service tax for the reason that these services were rendered in relation to their activities of construction of Railway sidings. They entertained a bonafide belief that the services are not taxable. Taking into consideration that the appellant has put forward the reasonable cause for failure to pay service tax, we are of the considered opinion that it is a fit case to invoke Section 80 of the Act ibid and the penalties imposed under these two categories are set aside. 24. The impugned order is, therefore, modifie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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