Custom, Excise & Service Tax Tribunal
Siliguri vs Tsewang Gyatso Kalen on 17 June, 2025
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH : KOLKATA
REGIONAL BENCH - COURT NO. 1
Service Tax Appeal No. 76540 of 2016
Service Tax Cross Objection No. 75846 of 2016
(Arising out of Order-in-Original No. 05/COMM/ST/SLG/16-17 dated 14.06.2016
passed by the Commissioner of Customs, Central Excise and Service Tax, Siliguri,
C.R. Building, Haren Mukherjee Road, Hakim Para, Siliguri - 734 001)
M/s. Nar Bahadur Dahal : Appellant/
Proprietor: Nar Bahadur Dahal, Assessee
Power Colony, Geyzing Bazaar,
P.O. & P.S.: Geyzing, West Sikkim,
Sikkim - 737 111
VERSUS
Commissioner of Customs, Central Excise and : Respondent
Service Tax
Siliguri Commissionerate,
C.R. Building, Haren Mukherjee Road, Hakim Para, Siliguri -
734 001
WITH
Service Tax Appeal No. 76909 of 2016
(Arising out of Order-in-Original No. 05/COMM/ST/SLG/16-17 dated 14.06.2016
passed by the Commissioner of Customs, Central Excise and Service Tax, Siliguri,
C.R. Building, Haren Mukherjee Road, Hakim Para, Siliguri - 734 001)
Commissioner of Customs, Central Excise and : Appellant
Service Tax
Siliguri Commissionerate,
C.R. Building, Haren Mukherjee Road, Hakim Para,
Siliguri - 734 001
VERSUS
M/s. Nar Bahadur Dahal : Respondent/
Proprietor: Nar Bahadur Dahal, Assessee
Power Colony, Geyzing Bazaar,
P.O. & P.S.: Geyzing, West Sikkim,
Sikkim - 737 111
WITH
Service Tax Appeal No. 76539 of 2016
Service Tax Cross Objection No. 75895 of 2016
(Arising out of Order-in-Original No. 07/COMM/ST/SLG/16-17 dated 14.06.2016
passed by the Commissioner of Customs, Central Excise and Service Tax, Siliguri,
C.R. Building, Haren Mukherjee Road, Hakim Para, Siliguri - 734 001)
M/s. Chewang G. Lachungpa : Appellant/
Proprietor: Chewang G. Lachungpa, Assessee
Arithang Road, Near Hotel Polok,
Rashi Prasad Allay Marg, East Sikkim
Sikkim - 737 101
Page 2 of 10
Appeal No(s).: ST/76538-76540,76909-76911/2016-DB
& Cross Obj. No(s).: ST/CO/75846,75895/16, ST/CO/75419,75897,76044/17
VERSUS
Commissioner of Customs, Central Excise and : Respondent
Service Tax
Siliguri Commissionerate,
C.R. Building, Haren Mukherjee Road, Hakim Para,
Siliguri - 734 001
WITH
Service Tax Appeal No. 76911 of 2016
Service Tax Cross Objection No. 75419 of 2017
(Arising out of Order-in-Original No. 07/COMM/ST/SLG/16-17 dated 14.06.2016
passed by the Commissioner of Customs, Central Excise and Service Tax, Siliguri,
C.R. Building, Haren Mukherjee Road, Hakim Para, Siliguri - 734 001)
Commissioner of Customs, Central Excise and : Appellant
Service Tax
Siliguri Commissionerate,
C.R. Building, Haren Mukherjee Road, Hakim Para,
Siliguri - 734 001
VERSUS
M/s. Chewang G. Lachungpa : Respondent/
Proprietor: Chewang G. Lachungpa, Assessee
Arithang Road, Near Hotel Polok,
Rashi Prasad Allay Marg, East Sikkim
Sikkim - 737 101
WITH
Service Tax Appeal No. 76538 of 2016
Service Tax Cross Objection No. 75897 of 2016
(Arising out of Order-in-Original No. 06/COMM/ST/SLG/16-17 dated 14.06.2016
passed by the Commissioner of Customs, Central Excise and Service Tax, Siliguri,
C.R. Building, Haren Mukherjee Road, Hakim Para, Siliguri - 734 001)
M/s. Tsewang Gyatso Kaleon : Appellant/
Proprietor: Chewang Gyatso Bhutia, Assessee
Vill: Ben, Ravongla, P.O. & P.S.: Ravongla,
District: South Sikkim,
Sikkim - 737 139
VERSUS
Commissioner of Customs, Central Excise and : Respondent
Service Tax
Siliguri Commissionerate,
C.R. Building, Haren Mukherjee Road, Hakim Para,
Siliguri - 734 001
Page 3 of 10
Appeal No(s).: ST/76538-76540,76909-76911/2016-DB
& Cross Obj. No(s).: ST/CO/75846,75895/16, ST/CO/75419,75897,76044/17
WITH
Service Tax Appeal No. 76910 of 2016
Service Tax Cross Objection No. 76044 of 2017
(Arising out of Order-in-Original No. 06/COMM/ST/SLG/16-17 dated 14.06.2016
passed by the Commissioner of Customs, Central Excise and Service Tax, Siliguri,
C.R. Building, Haren Mukherjee Road, Hakim Para, Siliguri - 734 001)
Commissioner of Customs, Central Excise and : Appellant
Service Tax
Siliguri Commissionerate,
C.R. Building, Haren Mukherjee Road, Hakim Para,
Siliguri - 734 001
VERSUS
M/s. Tsewang Gyatso Kaleon : Respondent/
Proprietor: Chewang Gyatso Bhutia, Assessee
Vill: Ben, Ravongla, P.O. & P.S.: Ravongla,
District: South Sikkim,
Sikkim - 737 139
APPEARANCE:
Smt. Shivani Agarwalla, Chartered Accountant,
For the Assessee(s)
Shri S.K. Singh and Shri S. Dey, both Authorized Representatives,
For the Revenue
CORAM:
HON'BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)
HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)
FINAL ORDER NOs. 76561-76566 / 2025
DATE OF HEARING / DECISION: 17.06.2025
ORDER:[PER SHRI ASHOK JINDAL] Both sides are in appeal against the impugned orders. Cross-objections have also been filed by the parties.
2. The facts of the case are that the assessees had been awarded works under the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) by the Energy and Power Department, Government of Sikkim. The details of the work orders entered into by the Page 4 of 10 Appeal No(s).: ST/76538-76540,76909-76911/2016-DB & Cross Obj. No(s).: ST/CO/75846,75895/16, ST/CO/75419,75897,76044/17 assessees under the RGGVY scheme, as have been placed before us, are as follows: -
▪ M/s. Nar Bahadur Dahal [Appellant in Service Tax Appeal No. 76540 of 2016 & Respondent in Service Tax Appeal No. 76909 of 2016] - 4 contracts entered into with the Govt. of Sikkim:
Sl.
No. Contract No. Nature of activities Service component in the Contract
1. 11/GOS/E&P/2005/Supply/117 This is a contract only for There is no service Dt.28/02/2009 supply and delivery of tax on supply of
2. 11/GOS/E&P/2005/Supply/226 materials and equipment Goods. Freight and Dt.20.09.2012 at site for execution of insurance on supply rural electrification of goods is paid to works. This contract contractors which is required the contractors inclusive of Service to only supply materials Tax if applicable.
at site which were to be purchased and procured from approved suppliers and manufacturers.
3. 11/GOS/E&P/2005/Erection/115 This is a contract for The Service Tax is Dt.28/02/2009 providing erection, applicable on
4. 11/GOS/E&P/2005/Erection/225 testing & commissioning Erection, Testing, Dt.20/09/2012 of Electrical Goods and Commissioning and civil Construction of Civil Construction of Control Room Building Two Storied Control services at site for Building. The service execution of rural Tax and different electrification works. Service Tax rate (12.36%/4.08%) for Erection Work and Civil Construction Work respectively as applicable has been specified in in the Schedules to the Work Order.
Page 5 of 10Appeal No(s).: ST/76538-76540,76909-76911/2016-DB & Cross Obj. No(s).: ST/CO/75846,75895/16, ST/CO/75419,75897,76044/17 ▪ M/s. Chewang G. Lachungpa [Appellant in Service Tax Appeal No. 76539 of 2016 & Respondent in Service Tax Appeal No. 76911 of 2016] - 4 contracts entered into with the Govt. of Sikkim:
Sl.
No. Contract No. Nature of activities Service component in the Contract
1. 11/GOS/E&P/2005/Supply/1442 This is a contract only for There is no service Dt.28/02/2009 supply and delivery of tax on supply of
2. 11/GOS/E&P/2005/Supply/209 materials and equipment Goods. Freight and Dt.01.08.2012 at site for execution of insurance on supply rural electrification of goods is paid to works. This contract contractors which is required the contractors inclusive of Service to only supply materials Tax if applicable.
at site which were to be purchased and procured from approved suppliers.
3. 11/GOS/E&P/2005/Erection/1443 This is a contract for The Service Tax is Dt.28/02/2009 providing erection, applicable on
4. 11/GOS/E&P/2005/Erection/210 testing & commissioning Erection, Testing, Dt.01.08.2012 of Electrical Goods and Commissioning and civil Construction of Civil Construction of Control Room Building Two Storied Control services at site for Building. The execution of rural service Tax and electrification works. different Service Tax rate (12.36%/4.08%) for Erection Work and Civil Construction Work respectively as applicable has been specified in in the Schedules to the Work Order.
Page 6 of 10Appeal No(s).: ST/76538-76540,76909-76911/2016-DB & Cross Obj. No(s).: ST/CO/75846,75895/16, ST/CO/75419,75897,76044/17 ▪ M/s. Tsewang Gyatso Kaleon [Appellant in Service Tax Appeal No. 76538 of 2016 & Respondent in Service Tax Appeal No. 76910 of 2016] - 4 contracts entered into with the Govt. of Sikkim:
Sl.
No. Contract No. Nature of activities Service component in the Contract
1. 11/GOS/E&P/2005/Supply/1450 This is a contract only for There is no service Dt.28/02/2009 supply and delivery of tax on supply of
2. 11/GOS/E&P/2005/Supply/203 materials and equipment Goods. Freight and Dt.10.08.2012 at site for execution of insurance on supply rural electrification of goods is paid to works. This contract contractors which is required the contractors inclusive of Service to only supply materials Tax if applicable.
at site which were to be purchased and procured from approved suppliers.
3. 11/GOS/E&P/2005/Erection/1451 This is a contract for The Service Tax is Dt.28/02/2009 providing erection, applicable on
4. 11/GOS/E&P/2005/Erection/203 testing & commissioning Erection, Testing, Dt.10.08.2012 of Electrical Goods and Commissioning and civil Construction of Civil Construction of Control Room Building Two Storied Control services at site for Building. The execution of rural service Tax and electrification works. different Service Tax rate (12.36%/4.08%) for Erection Work and Civil Construction Work respectively as applicable has been specified in in the Schedules to the Work Order.
Page 7 of 10Appeal No(s).: ST/76538-76540,76909-76911/2016-DB & Cross Obj. No(s).: ST/CO/75846,75895/16, ST/CO/75419,75897,76044/17 2.1. The first two contracts (Contract Nos. 1 and 2), in respect of each of the above said contractors, are for supply of materials and equipment at site for execution of rural electrification works and the other contracts (Contract Nos. 3 and 4), in each of the above cases, are for providing erection, testing and commissioning of electrical goods and civil construction of control room building services at site for execution of rural electrification works.
2.2 The Revenue is of the view that as all the contracts are related to each other, therefore, on whole of the amount received against these, the assessees/appellants are liable to pay Service Tax under the category of 'erection, commissioning and installation' service. Accordingly, proceedings were initiated against the said assessees for the impugned period, by way of issuance of various Show Cause Notices, invoking the extended period of limitation, the details of which are as follows: -
Sl. Name of SCN No. & Date Period
No. contractor involved
1. M/s. Nar Bahadur C.No.V(19)19/ADJ/ST/COMM/S 2009-10 to
Dahal LG/2014/2652 dtd. 20.02.2015 2013-14
2. M/s. Chewang G. C.No.V(19)01/ADJ/ST/COMM/S 2009-10 to
Lachungpa LG/2015/4789 dtd. 31.03.2015 2013-14
3. M/s. Tsewang C.No.V(19)17/ADJ/ST/COMM/S 2009-10 to
Gyatso Kaleon LG/2014/4770 dtd. 30.03.2015 2013-14
3. The assessees contested the issue contending that in respect of the contracts meant solely for supply of materials and electrical equipment for execution of works, no Service Tax is payable, being only supply of materials. For the remaining contracts, it is the Page 8 of 10 Appeal No(s).: ST/76538-76540,76909-76911/2016-DB & Cross Obj. No(s).: ST/CO/75846,75895/16, ST/CO/75419,75897,76044/17 contention of the assessees-appellants that all these contracts are related to rural electrification and therefore, the same are exempt from levy of Service Tax under Notification No. 25/2012-S.T. dated 20.06.2012 (Entry No. 12A) wherein services provided to government/local authority/governmental authority by way of construction, erection or commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of civil structures or any other original works meant predominantly for use other than in commerce, industry or any other business or profession, are covered. It is the case of the assessees that these services have been provided by them in regard to rural electrification and hence, on this basis, it was contended that they are not liable to pay Service Tax.
4. The matters were adjudicated and by way of the impugned orders, the ld. adjudicating authority dropped the demand of Service Tax proposed in the Show Cause Notice for the contracts meant for supply of materials/equipment in respect of each of the assessees herein, but confirmed the demand of Service Tax against the said assessees for the contracts involving erection, commissioning and testing along with civil construction works.
5. Aggrieved from the said orders, both sides are in appeal before us. Cross-objections have also been filed by the parties herein.
5.1. The assessees/contractors are in appeal against the confirmation of the demand against them vide the impugned orders whereas the Revenue has filed appeals against the dropping of the demands by the ld. adjudicating authority.
Page 9 of 10Appeal No(s).: ST/76538-76540,76909-76911/2016-DB & Cross Obj. No(s).: ST/CO/75846,75895/16, ST/CO/75419,75897,76044/17
6. Heard the parties and considered their submissions.
7. We find that, in this case, it is an undisputed fact that the assessees had been awarded the works under the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) by the Energy and Power Department of the Government of Sikkim. These contracts have been awarded to the assessees/appellants for rural electrification in the State of Sikkim under the scheme of the Central Government. The activity of rural electrification is not liable to be taxed in terms of Notification No. 25/2012-S.T. dated 20.06.2012 (Entry No. 12A), wherein services provided to government/local authority/governmental authority by way of construction, erection or commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of civil structures or any other original works meant predominantly for use other than in commerce, industry or any other business or profession are exempted.
7.1 Admittedly, the services provided by the said assessees/contractors were meant for use other than in 'commerce, industry or any other business or profession', to the State Government, under the Central Government scheme of Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY).
7.2. In these circumstances, we find that the services provided by the assessees are not taxable services.
Page 10 of 10Appeal No(s).: ST/76538-76540,76909-76911/2016-DB & Cross Obj. No(s).: ST/CO/75846,75895/16, ST/CO/75419,75897,76044/17
8. We also find that the issue is no longer res integra as an identical issue has already been examined by this Tribunal in the case of Shankar Agarwal v. Commissioner of C.Ex., Cus. & S.T., Siliguri [Final Order Nos. 76400-76401 of 2025 dated 30.04.2025 in Service Tax Appeal Nos. 76537 of 2016 & ors. - CESTAT, Kolkata] wherein the same view has been expressed by this Tribunal, holding that such services provided by an assessee under the RGGVY scheme for rural electrification are exempt from levy of Service Tax in terms of Notification No. 25/2012- S.T. dated 20.06.2012 (Entry No. 12A).
9. In view of the above discussion and by relying on the decision cited supra, we hold that no Service Tax is payable by the assessees for the said services.
10. Consequently, the appeals filed by the assessees are allowed. Accordingly, we do not find any merit in the appeals filed by the Revenue and hence, the same are dismissed. The cross objections filed by the parties are disposed of in the above manner.
11. In these terms, the appeals are disposed of.
(Operative part of the order was pronounced in open court) Sd/-
(ASHOK JINDAL) MEMBER (JUDICIAL) Sd/-
(K. ANPAZHAKAN) MEMBER (TECHNICAL) Sdd