TMI Blog2023 (2) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... y pertaining to outsourcing of such activities save where the law, for particular objectives, makes an exception. One such is the metro operations for which specific enactments enable other operators without derogating from the status of being railway and, more often than not, by enterprises that are jointly owned by the Central and State Governments. Even where the ownership does not vest in the government, the operation of such railways is under special enactment which are not excluded from the sphere of the expression railways . It is, thus, clear that the proposition of strict construction of intent of exemption notification must also go hand in hand with strict construction of every word/phrase therein. The exemption from tax is available to railways , excluding mono rail or metro, by notification no. 25/2012-ST dated 20th June 2012 after 1st July 2012 and, as conceded by the adjudicating authority, there being no definition of railway , either therein or in Finance Act, 1994, the distinction between railway for private purpose and railway for public service cannot be artificially contrived to suit tax administration; neither can the definition in another statute be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... installation of original works pertaining to,- (a) railways, excluding monorail and metro; . applied to this receipt by holding that the said sidings are nothing but material handling system for private purpose and, therefore, not covered by (31) railway means a railway, or any portion of a railway, for the public carriage of passengers or goods, and includes (a) all lands within the fences or other boundary marks indicating the limits of the land appurtenant to a railway; (b) all lines of rails, sidings, or yards, or branches used for the purposes of, or in connection with, a railway; (c) all electric traction equipments, power supply and distribution installations used for the purposes of, or in connection with, a railway; in section 2 of The Railways Act, 1989 though the benefit of exclusion of the goods component in composite contracts provided for in rule 2(a)(ii)(A) of Service Tax (Determination of Value) Rules, 2006 was extended to them. The liability was computed by applying the tax rate on 40% of the amount so received. 3. According to Learned Counsel appearing for the appellant, the issue stands settled by several d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal in Hindustan Construction Company Ltd v. Commissioner of Service Tax, Mumbai VII [2021 (44) GSTL 369 (Tri.-Mumbai)] and in NMC Industries Pvt Ltd v. Commissioner of Service Tax-II, Mumbai [2020 (43) GSTL 551 (Tri.-Mumbai)] were also cited. 6. Learned Authorised Representative submits that the decision of the Tribunal in re KVR Rail Infra Projects Pvt Ltd is pending before the Hon ble Supreme Court and that the impugned project, undertaken exclusively for handling coal to be used by M/s National Thermal Power Corporation for generation of thermal energy, was not eligible for exemption intended for railways engaged in public carriage of persons and goods. 7. It is interesting to note that the assessee had placed reliance upon the decisions of the Tribunal supra before the original authority which did not appear to have carried much impression with him and, demonstrating inability to acknowledge the binding precedent of a judgment or decision of appellate authority or the manner in which it is to be read, the adjudication order has referred to decision in re Afcons Infrastructure Ltd but to the exclusion of everything therein other than submissions made on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 nongovernmental 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 appropriately understood as Railways operated under the Indian Railways Act especially for the purpose of any special dispensations such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red only after the period of dispute and therefore does not concern us. 9. It is, thus, clear that the proposition of strict construction of intent of exemption notification must also go hand in hand with strict construction of every word/phrase therein. The exemption from tax is available to railways , excluding mono rail or metro, by notification no. 25/2012-ST dated 20th June 2012 after 1st July 2012 and, as conceded by the adjudicating authority, there being no definition of railway , either therein or in Finance Act, 1994, the distinction between railway for private purpose and railway for public service cannot be artificially contrived to suit tax administration; neither can the definition in another statute be drawn upon for the purported purpose of illumination. The Railways Act, 1989 was enacted to authorize Government of India to operate the railway network of the country; it also affords a framework for administration of the railway services and jurisdictional monopoly. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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