Custom, Excise & Service Tax Tribunal
Geo-Tech Construction Co.Pvt Ltd vs Cochin-Cce on 14 August, 2024
ST/822/2010
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL
BANGALORE
REGIONAL BENCH - COURT NO. 1
Service Tax Appeal No.822 of 2010
(Arising out of Order-in-Original No. 4/2010/ST dated 28.01.2010
passed by the Commissioner of Central Excise, Customs and Service
Tax, Cochin.)
Geo-Tech Constructions Co. Pvt. Ltd.
KSHB Office Complex, Appellant(s)
8th Floor, Panampilly Nagar,
Cochin - 682 036.
VERSUS
The Commissioner of Central Excise
Central Revenue Building,
I.S. Press Road, Respondent(s)
Cochin - 682 018.
APPEARANCE:
Shri Raghavendra C.R, Advocate for the Appellant. Shri M. A. Jithendra, Assistant Commissioner (AR) for the Respondent.
CORAM: HON'BLE DR. D.M. MISRA, MEMBER (JUDICIAL) HON'BLE MRS. R. BHAGYA DEVI, MEMBER (TECHNICAL) FINAL ORDER NO. 21120 /2024 DATE OF HEARING: 14.08.2024 DATE OF DECISION: 14.08.2024 PER: D.M. MISRA This appeal is filed against Order-in-Original No.4/2010-ST dated 28.01.2010 passed by the Commissioner of Central Excise, Cochin.
2. Briefly stated the facts of the case are that the appellants are service providers registered under the category of "commercial or Industrial Construction services or construction of residential complex Services'. On the basis of scrutiny of their Page 1 of 7 ST/822/2010 records by the audit unit of the department, it came to the notice that the appellant had provided service in relation to maintenance of roads to Kerala State Transport Project (KSTP) as a subcontractor of M/s. Tarmat Infrastructural and Engineering Pvt. Ltd. Bombay. They have provided taxable service in respect of Paramada-Moolamattom-Thodupuzha Road under Road Maintenance Contract (RMC) No.24 and Chenganoor- Mavelikara Road under RMC No.31. The appellant had received a gross amount of Rs.9,46,03,378/- against the said contracts for the period September 2005 to February 2008, however, failed to discharge service tax of Rs.1,05,07,703/-. Also, they had provided taxable service in relation to construction of minor ports to Karnataka Public Works Department during November 2004 to July 2005 and received an amount of Rs.1,22,30,776/- but failed to discharge service tax of Rs.4,11,688/-. They had also provided 'Commercial or Industrial Construction Service' to M/s. Tata Projects during the period 10.9.2004 to 31.12.2004 and received an amount of Rs.36,69,761/- but failed to discharge service tax of Rs.1,23,524/-. Similarly during 2005-06, they have provided 'Commercial or Industrial Construction Service' in relation to construction of retaining wall at Sabarmathi River, Gujarat and received an amount of Rs.84,76,746/- but failed to discharge service tax of Rs.2,85,328/-. Further, they have also rendered services of 'Construction of Complexes (Residential) for two projects viz., Platinium and Topaz during August 2005 to June 2006 to M/s. Skyline Projects but failed to discharge service tax of Rs.25,94,423/-. Consequently, a show-cause notice dated 19.03.2009 was issued to them for recovery of the total demand of Rs.1,39,22,666/- with interest and penalty. On adjudication, the demand was confirmed with interest and penalty. Hence, the present appeal.
3. At the outset, the learned advocate for the appellant has submitted that the services rendered in relation to RMC No. 24 and RMC No. 31 relating to construction of new roads, widening Page 2 of 7 ST/822/2010 with shoulder formation, side drain construction, etc., cannot be classified as maintenance of road services. They have enclosed the sample Bill of Quantities (BCQ) for both the projects. Further, he has submitted that as per CBEC Circular No.110/4/2009-ST dated 23.02.2009, the activities of laying new road, widening of narrow road, changing road surfaces are covered under construction of road. In support, he has referred to the judgment of this Tribunal in the case of CCE and Customs vs. NTPC: 2020 (42) ELT GSTL 75 (Tri.-Del.), Rajendran Singh Bhamboo vs. CCE: 2019 (22) GSTL 278 (Tri.-Del.). Further, he has submitted that by virtue of Notification No.24/2009-ST dated 27.07.2009, maintenance of road services are exempted from service tax. He has also submitted that by virtue of Finance Act, 2012, Section 97 has been specifically inserted providing exemption from service tax in respect of 'management, maintenance or repair of roads' for the period from 16.06.2005 to 26.07.2009. Therefore, under the aforesaid category, the services provided by the appellant cannot be chargeable to service tax. In support, he referred to the following judgments:
(i) M.P. Audhyogik Kendra Vikas Nigam vs. CCE: 2015 (40) STR 875 (MP)
(ii) Roller Centre vs. CCE: 2013 (31) STR 293 (Tri.-
Ahmd.)
(iii) Jagadish Prasad Agarwal vs. CCE: 2017 (3) GSTL 455 (Tri.-Del.) 3.1 With regard to construction services rendered to the Karnataka Public Works Department, M/s. Tata Project, M/s.
Gammon India Ltd. and M/s. Skyline Pvt. Ltd., he submitted that these are in the nature of 'works contract services' and rendered prior to 1.6.2007, necessary VAT registration certificate has been enclosed. And also, the relevant works contract services rendered during the said period to various contractors are enclosed. In support of their claim that the services rendered by them are works contract services, he has submitted that in view of the judgment by the Hon'ble Supreme Court in the case of Page 3 of 7 ST/822/2010 CCE vs. Larsen & Toubro Ltd.: 2015 (39) STR 913 (SC), Total Environment Building Systems (P) Ltd. vs. DCCT:
[2022] 141 taxmann.com 66 (SC); CST vs. Jain Housing & Construction Ltd.: (2023) 10 Centax 171 (SC) and this Tribunal in the case of M/s. KVJ Builders & Developers P. Ltd. vs. CCE vide Final Order No.20044/2024 dated 19.1.2024 and Godrej Properties vs. CCT, Bangalore: 2023 TIOL 1016 - CESTAT-BANG.
4. Per contra, the learned Authorised Representative for the Revenue reiterated the findings of the learned Commissioner.
5. We find that the appellants had rendered services of construction of new roads, widening of walls, side drain construction, etc., during the period September 2004 to February 2008 as subcontractor of M/s. Tarmat Infrastructural and Engineering Pvt. Ltd. to KSTP by virtue of Section 97 of Finance Act, 2012 granting exemption retrospectively for the period 16.6.2005 to 26.07.2009. Section 97 has been inserted by Finance Act, 2012 which reads as follows:
"97. Insertion of new Sections 97& 98. Special provision for exemption in certain cases relating to management, etc., of roads. - (1) Notwithstanding anything contained in section 66, no service tax shall be levied or collected in respect of management, maintenance or repair of roads, during the period on and from the 16th day of June, 2005 to the 26th day of July, 2009 (both days inclusive).
(2) Refund shall be made of all such service tax which has been collected but which would not have been so collected had sub-section (1) been in force at all material times.
(3) Notwithstanding anything contained in this Chapter, an application for the claim of refund of service tax."
Thus, the services rendered by the appellant during the period relating to construction of new roads, widening with shoulder formation, side drain construction, etc., are exempted from Service Tax prior to the period from 16.06.2005 to 26.7.2009.
Page 4 of 7ST/822/2010
6. With regard to services rendered relating to construction services to other subcontractors to Karnataka Public Works Department, M/s. Tata Projects, M/s. Gammon India and M/s. Skyline Projects, we find that the appellant has placed the relevant contracts and also the VAT registration certificate. The said work orders involve both supply of materials as well as labour, therefore, there are in the nature of 'works contract service' which become leviable to service tax with effect from 01.06.2007 in view of the judgment of the Hon'ble Supreme Court in the cases of Larsen & Toubro Ltd. (supra), Total Environment Building Systems (P) Ltd. (supra), Jain Housing & Construction Ltd. (supra). This principle has been referred and followed by the Tribunal in the case of KVJ Builders & Developers (supra) wherein it observed as:
"6. We find that the learned Commissioner has confirmed the demand under 'Construction of Complex Services' for the period 16/06/2005 to 31/03/2008 denying the benefit of Notification No.01/0206-ST dated 01/03/2006. It is not in dispute that for the period prior to 01/06/2007, the appellant has rendered construction of complex services, which included both material as well as service components; hence squarely fall under the category of 'Works Contract Service'. Also, during the course of hearing, the appellant has submitted the VAT returns filed by the appellant during the relevant period under Works Contract Service. In these circumstances, denial of benefit of composite scheme under Works Contract Service w.e.f. 01/06/2007, is bad in law and levy of service tax prior to 01/06/2007. when the services are in the nature of 'Works Contract Service' also cannot be sustained in view of the judgment of the Hon'ble Supreme Court in the case of Total Environment Building Systems (P) Ltd. Vs. Deputy Commissioner of Commercial Taxes [2022(63) GSTL 257 (SC)]. Their lordships in the said case held as follows:-
"12. What was said by the Constitution Bench in Indra Sawhney v. Union of India, 1992 Supp (3) SCC 217 and Keshav Mills Co. Ltd. v. Commissioner of Income Tax, Bombay North, Ahmedabad, AIR 1965 SC 1636, on the principle of stare decisis clearly bind us. The judgment of this Court in the case of Larsen and Toubro Limited (supra) has Page 5 of 7 ST/822/2010 stood the test of time and has never been doubted earlier. As observed hereinabove, the said decision has been followed consistently by this Court as well as by various High Courts and the Tribunals. Therefore, if the prayer made on behalf of the Revenue to re-consider and/or review the judgment of this Court in the case of Larsen and Toubro Limited (supra) is accepted, in that case, it will affect so many other assessees in whose favour the decisions have already been taken relying upon and/or following the decision of this Court in the case of Larsen and Toubro Limited (supra) and It may unsettle the law, which has been consistently followed since 2015 onwards. There are all possibilities of contradictory orders. Therefore, on the principle of stare decisis, we are of the firm view that the judgment of this Court in the case of Larsen and Toubro Limited (supra), neither needs to be revisited, nor referred to a Larger Bench of this Court as prayed, i.e., after a period of almost seven years and as observed hereinabove when no efforts were made to file any review application requesting to review the judgment on the grounds, which are now canvassed before this Court.
13. At this stage, it is required to be noted that one of the appeals being Civil Appeal No. 6523 of 2014 filed by M/s. G.D. Builders is against the decision of the Delhi High Court in the case of G.D. Builders v. Union of India reported P). It is to be noted that the said decision of the Delhi High Court in the case of G.D. Builders (supra) has been specifically overruled by this Court in the case of Larsen and Toubro Limited (supra). The decision of the Delhi High Court in the case of G.D. Builders (supra) has been considered by this Court in the case of Larsen and Toubro Limited (supra) in paragraphs 28, 29, 30, 32, 33, 38 and 39 and ultimately, this Court opined that the decision of the Delhi High Court in the case of G.D. Builders (supra) is in fact contrary to a long line of decisions. It is further specifically observed and held that the decision of the Delhi High Court in the case of G.D. Builders (supra) is wholly incorrect in its conclusion that the Finance Act, 1994 contains both the charge and machinery for levy and assessment of service tax on indivisible works contract. It is reported that while deciding the group of matters in the case of Larsen and Toubro Limited (supra), the papers of the appeal filed by M/s. G.D. Builders being Civil Appeal No. 6523 of 2014 were also called and the Learned Counsel appearing on behalf of the G.D. Builders was also heard. It appears that, however, the Civil Appeal No. 6523 of 2014 filed by M/s. G.D. Builders against the decision of the Delhi High Court has not been specifically disposed of. Therefore, once the decision of the Delhi High Court in the case of G.D. Builders (supra), which is the subject matter of Civil Appeal No. 6523 of 2014 has been held to be Page 6 of 7 ST/822/2010 wholly incorrect, Civil Appeal No. 6523 of 2014 filed by M/s. G.D. Builders has to be allowed and the judgment and order passed by the Delhi High Court has to be quashed and set aside."
7. In view of the above, the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law.
(Operative portion of the order was pronounced in Open Court on conclusion of hearing.) (D.M. MISRA) MEMBER (JUDICIAL) (R. BHAGYA DEVI) MEMBER (TECHNICAL) rv Page 7 of 7