TMI Blog2023 (9) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.07.2012 - Thus, the activity of construction of railways and maintenance thereof, no service tax is payable by the Appellant No.(1) (2). Therefore, the demand of service tax on that account is set aside. Manpower service - HELD THAT:- It has been admitted by the appellant that in reply to the show-cause notice, they paid the service tax thereon. Therefore, the same is not contested. Transportation services - HELD THAT:- The appellant is not contesting the same. Director s services - HELD THAT:- The said demand is not sustainable in the light of the decision of this Tribunal in the case of M/S. MAITHAN ALLOYS LTD. VERSUS CCE ST, BOLPUR [ 2019 (4) TMI 1595 - CESTAT KOLKATA] , wherein it has been held Demand of service tax on remuneration paid to whole time directors cannot be sustained - the demand of service tax on account of construction of railways and maintenance thereof and the Director s service, is not sustainable against the Appellant. Penalty - HELD THAT:- No penalty is imposable on all the appellants. Appeal disposed off. - HON BLE MR.ASHOK JINDAL, MEMBER (JUDICIAL) And HON BLE MR.K.ANPAZHAKAN, MEMBER (TECHNICAL) Shri Tarun Chatterj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how-cause notice, they have paid the service tax amounting to Rs.27,91,113/ on the same. 3.2 He further submits that an another demand on account of Director s service has been confirmed against the Appellant No.1. He submits that the said demand is not sustainable in the light of the decision of this Tribunal in the case of Maithan Ispat Limited Vs. Commissioner of Central Excise Service Tax, Bolpur reported in 2020 (33) GSTL 228 (Tri.-Kolkata). 4. The ld.A.R. for the Revenue reiterated the findings of the impugned order. 5. We find that the demand against the Appellant No.(1) (2), has been confirmed for the services of construction and maintenance of railways. The said activity is exempted from payment of service tax in terms of Notification No.25/2012-ST dated 20.06.2012 and the same has been held exempted by this Tribunal in the case of Hari Construction Associates Private Limited (supra), wherein this Tribunal has held as under : 8. We find that the same issue came up before this Tribunal in the case of Konkan Railway Corporation Limited (supra), wherein this Tribunal has observed as under : 6. Learned Authorised Representative submits that the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nued unabated. It would appear that the adjudicating authority 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. For a better appreciation of the arguments, we deem it appropriate to record the particular finding the adjudicating authority that 3.7 The Term Railways mentioned in Section 65(25b) for the purpose of exclusion from the scope of levy of Service Tax needs to be understood in the appropriate context and especially the scheme of taxation of services under the Finance Act, 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 under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finitions in the statute governing Railways is intended for fencing in the operational component to such objects as are included in that law. It is not appropriate to place reliance on such definitions save under the express authority of Finance Act, 1994. It is also not correct to contend that the coverage of the statute governing Railways is limited to Government Railways; no such distinction is drawn except for the purposes of jurisdiction of the railway 9 ST/86191/2021 authorities specified therein for the governance of the Railways belonging to the Government. 8. In the absence of any qualification for the railway incorporated in the exclusion component of the taxable service, any railway, irrespective of ownership, is covered. Within the scheme of negative list , there is a specific exemption for 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. 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 therei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not sustainable in the light of the decision of this Tribunal in the case of Maithan Alloys Limited (supra), wherein it has been held as under : 6. In the instant case, it is not in dispute that service tax has been duly paid on remuneration paid to directors who are not whole-time employee directors. The only dispute herein is for payment of remuneration to whole time directors, which is a fact on record. The provisions of Companies Act, 2013, contained in Section 2(94), duly defines whole-time director to include a director in the whole-time employment of the company. A wholetime director refers to a director who has been in employment of the company on a full-time basis and is also entitled to receive remuneration. We further find that the position of a whole-time director is a position of significance under the Companies Act. Moreover, a whole-time director is considered and recognized as a key managerial personnel under Section 2(51) of the Companies Act. Further, he is an officer in default [as defined in clause (60) of Section 2] for any violation or non-compliance of the provisions of Companies Act. Thus, in our view, the whole-time director is essentially an empl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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