TMI Blog2020 (10) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... ity was particularly impressed by the activity brought within the tax net to be ascertained on the basis of commerciality to bring it in conformity with the description of the taxable activity. Hence, according to him, the operation of the two recipients of service, being evidently commercial, did not merit the exclusion contained therein - adjudicating authority is far from correct in assuming that the dutiability devolving, under Customs Act, 1962 and Central Excise Act, 1944, on governmental transactions by specific inclusion in the statutes is, similarly, present in Finance Act, 1994. Nor does the reason ascribed by him as the prompting for such inclusion in the commodity tax statutes find resonance in any decision, circular or elucidation. Furthermore, to the extent of our understanding, the operations, or its popular designation as Indian Railways , of government-run Railways is not stripped of its commercial mantle. A stray reference to the statute governing railway operations does not establish the postulate of such definition to be applicable in every special dispensation. In the absence of any qualification for the railway incorporated in the exclusion component of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initiated for alleged non-payment of tax liability on work undertaken for M/s Mumbai Metro One Pvt Ltd and M/s Delhi Metro Rail Corporation Limited during 2011-12 and 2012-13 as provider of commercial or industrial construction service , incorporated for tax by section 65(105)(zzzh) of Finance Act, 1994. 2. Learned Counsel for the appellant submits that their consistent claim of being provider of works contract service , taxable under section 65(105)(zzzza) of Finance Act, 1994. as the said transactions involved contractual supply of material along with service, were, with like consistency, discarded by the investigators and by the adjudicating authority. The stand of the tax authorities that the admitted exception of railways was restricted to activities engaged in connection with railway undertakings of the Government is, according to him, erroneous. Likewise, he contends that, after 1st July 2012 and the introduction of negative list regime in Finance Act, 1994, works contract service has been accorded a special acknowledgement with special provision for valuation of taxable service. Furthermore, he argues that notification no. 25/2012-ST dated 20 June 2012 (generally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1994. The objective to levy Service Tax under Section 65(105)(zzzp) read with Section 65 (25b) is clearly to levy Service Tax on Commercial or Industrial construction service. However, Commercial or Industrial construction of building or structure in respect of railways is excluded from the scope of the levy. 3.8 It is the general principle followed in the levy of Service Tax that when Government undertakes commercial or business activity, then they should be treated on par with similar activity undertaken by non-governmental bodies or any other persons for the purpose of taxation. This is essential to avoid competitive disadvantage to other similar non-governmental service providers and to ensure level playing field to all similar service providers. 3.9 Indian Railways under the Ministry of Railways is part of the Government of India and not on commercial basis. Therefore, Indian Railways cannot be compared or equated with MMO/DMRC, a Company formed under the Companies Act and is committed to run purely on commercial lines even if it is fully owned by the Government.... Railway in the Indian Context is popularly known as Indian Railways and is more appropriat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... metro or monorail within the broader exclusion available to Railways. The exclusion of metro or monorail has occurred only after the period of dispute and therefore does not concern us. 9. The decision of the Tribunal in Afcons Infrastructure Ltd v. Commissioner of Central Excise, Mumbai-II [2015 (38) STR 194 (Tri-Mumbai)] holding that 3.3 From the above decision of the Hon ble Delhi High Court, it is clear that DMRC is a railway as defined in section 2 (31) of the Railways Act, 1989 and, therefore, the ratio of the above judgement will apply equally in case of service tax liability also. Consequently, the finding that 3.4. .From this also, it is clear that DMRC is a railway as defined under the Railways Act, 1989 and, therefore, the conclusion drawn by the adjudicating authority that they are a different entity and Railways as defined under Section 65 (25b) read with Section 65 (105) (zzzp) of the Finance Act, 1994 is not a legally acceptable proposition. xxxx 7. It is also a well-known fact that the Indian Railway itself is an organisation, which is meant to run on commercial basis. Recognising these facts, there is a provision for a separa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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