Custom, Excise & Service Tax Tribunal
Shri Shailesh Kumar Goswami vs Cgst Kanpur on 12 November, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Service Tax Appeal No.70681 of 2025
(Arising out of Order-In-Appeal No.251-ST-ALLD-2024, dated-24.04.2024
passed by Commissioner (Appeals) CGST & Central Excise, Allahabad)
Shri Shailesh Kumar Goswami .....Appellant
(156, Bazar, Barwasagar
Jhansi, Uttar Pradesh 284201)
VERSUS
Commissioner, CGST & Central Excise, Kanpur
....Respondent
(117/7, Sarvodya Nagar,Kanpur, Uttar Pradesh 208005) APPEARANCE:
Shri Ajay Kumar Yadav, Advocate for the Appellant Shri A.K. Choudhary, Authorized Representative for the Respondent CORAM: HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) FINAL ORDER NO.-70802/2025 DATE OF HEARING : 12.11.2025 DATE OF DECISION : 12.11.2025 P. K. CHOUDHARY:
Heard both sides and perused the appeal records.
2. The present appeal has been filed by the Appellant assailing the Order-In-Appeal No.251-ST-ALLD-2024, dated- 24.04.2024 passed by Commissioner (Appeals) CGST & Central Excise, Allahabad.
3. Vide the impugned Order-In-Appeal the learned Commissioner (Appeals) partly allowed the appeal to the extent of exempting the works contract service valued at Rs.18,20,634/- pertaining to the construction of Government 2 Service Tax Appeal No.70681 of 2025 Industrial Training Institute, Konch, Jalaun. However, the appellate authority disallowed the exemption on the remaining service value of Rs.31,38,466/- received for construction of residential houses at Madawara, Lalitpur, solely on the ground that the relevant contract was dated 15.09.2015 and did not fall within the period covered under Sr. No. 12A of Notification No. 25/2012-ST.
4. Based on the aforesaid amount of Rs.31,38,466/-, the Commissioner (Appeals) determined the taxable value after abatement at Rs.12,55,386/-, and imposed service tax at the rate of 15% thereon, amounting to Rs.1,88,308/. Thereafter, applying Notification No. 30/2012-ST dated 20.06.2012, the Commissioner (Appeals) held that only 50% of the said tax was payable by the appellant, thereby confirming service tax liability of Rs.94,154/- on the appellant. The Commissioner (Appeals) also upheld the penalty under Section 78 of the Act, and other penalties imposed under various Sections of the Finance Act, 1994.
5. The learned Advocate vehemently argued that invocation of extended period of limitation under proviso to Finance Act, 1994 to wholly unwarranted and unsustainable in absence of any willful suppression, fraud etc. It is his submission that mere reliance on third party data received from the Income Tax Department does not justify invocation of extended period of limitation.
6. I find force in the submission of the learned Advocate. Since the entire proceedings were initiated on the basis of the third party date received from the Income Tax Department and the Appellant was under a bonafide belief that since he is providing services only to the Departments of the State Government, his entire receipts are exempt and he is not liable to pay any Service Tax. In fact during the period under dispute i.e. for the Financial Year 2016-17 gross receipts/income from operations was to the tune of Rs.71,22,363/-. In fact I observe 3 Service Tax Appeal No.70681 of 2025 from the records that the gross receipts/income from operations was revised by the payer and the modified amount was Rs.49,59,100/-. Some of the receipts amounting to Rs.16,01,518/- pertains to supply of goods and VAT was paid on the same and therefore, the same was not taxable as per the provisions of Section 66D(e) of the Act and abatement of 60 was accorded by the Adjudicating Authority and the demand of Service Tax was accordingly confirmed. However, the learned Commissioner (Appeals) has observed as under:-
"4.4 The main issue involved in the instant case is to ascertain as to:
(1) Whether amount of Rs.49,59,100/- received by the appellant during 2016-17 is under purview of exemption as per S. No.12, 12A, 14, 39 and 54 read with 29(h) of Notification No.25/2012-ST dated 20.06.2012 or not?
(ii) Whether appellant is eligible for threshold exemption under Notification No.33/2012-ST dated 20.06.2012 or not?
4.4.1 Coming to Point No. (i), it is observed that appellant has claimed benefit of S. CGST & CY ZA, 14; 39 and 54 read with 29(h) of Notification No.25/2012-ST dated 20.06.2012. The said serials of Notification No.25/2012-ST dated 20.06.2012 provides as under:
"S. No.12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of-
(a)****************
(b) a historical monument, archaeological site or i
(c)******************* 4 Service Tax Appeal No.70681 of 2025
(d) canal, dam or other irrigation works;
(e) pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal; or
(f)**************** "S. No.12A. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of -
(a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession;
(b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or(iii) an art or cultural establishment; or
(c) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause (44) of section 65 B of the said Act;
under a contract which had been entered into prior to the 1st March, 2015 and on which appropriate stamp duty, where applicable, had been paid prior to such date:
provided that nothing contained in this entry shall apply on or after the 1st April, 2020;"
"S. No.14. Services by way of construction, erection, commissioning, or installation of original works pertaining to,-
"(a) railways, excluding monorail and metro;
Explanation.-The services by way of construction, erection, commissioning or installation of original works pertaining to monorail or metro, where contracts were entered into 5 Service Tax Appeal No.70681 of 2025 before 1 March, 2016, on which appropriate stamp duty, was paid, shall remain exempt.
(b) a single residential unit otherwise than as a part of a residential complex;
(c) low-cost houses..........;
"(ca) lour cost houses up to a carpet area of 60 square metres per house.......:
(d) post-harvest storage infrastructure............ or
(e) mechanized food grain handling system, *S. No.39. Services by "Government, a local authority or a governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243 W of the Constitution."
"S. No.54. Services provided by Government or a local authority to another Government or local authority:
Provided that nothing contained in this entry shall apply to services specified in sub-clauses (i), (ii) and (iii) of clause
(a) of section 66D of the Finance Act, 1994;"
"S. No.29(h): sub-contractor providing services by way of works contract to another contractor providing works contract services which are exempt;"
It is observed from the above provisions that exemption provided therein are conditional and not general in nature and eligibility of works as exempted category depends upon fulfillment of the certain conditions as nature of service 6 Service Tax Appeal No.70681 of 2025 recipients, service provider, specified works and subject to time limit specified for execution of work contracts.
4.4.2 In order to ascertain the nature of works executed by the appellant, all the documents related to their activities done by them are required to be examined. Here at the appellate stage, the appellant has provided copy of main contracts/work order/agreements, Govt. Financial sanction for the works, Form 26AS, work orders of sub-contract works, copies of bills and a consolidated summary of payment receipts with nature of works. On going through the documents povided by the appellant, it is observed as under:
(i) A letter No.1009/Ek-5-2015-65/2015 dated 16.09.2015 of Dy. Secretary, U.P. Govt. to Commissioner & Secretary, Rajashwa Parishad, U.P. Govt., Lucknow regarding sanction of 1 installment of Rs.50 Lakhs against approved cost of Rs.264.33 Lakhs in respect of work of construction of residential buildings under Tehsil Mandawara, Lalitpur which was approved by Governor vide letter No.1141(1)/12-
Bhawan/65/2015 dated 24.07.2015. It has been stated in the letter that said work will be done through PACCFED.
(ii) A Memorandum of Understanding dated Nil of 2013 between Director Training and Employment U.P. Guru Govind Singh Marg, Lucknow and Chief Engineer, PACCFED for building of Government Industrial Training Institute at Konch, Jalaun which is Semi-Govt. organization for cost of Rs.487.89 Lakhs and Rs.150 Lakhs will be released by Director Training and Employment, Lucknow.
(iii) A letter No.25/26-UP-2014-105(S)/2012 dated 20.01.2014 of Dy. Secretary, U.P. Govt. to Director, Training and Employment, U.P., Lucknow regarding sanction of 1st installment of Rs.150 Lakhs against approved cost of 7 Service Tax Appeal No.70681 of 2025 Rs.487.89 Lakhs in respect of work of construction of buildings of ITI under at Baberu-Banda, Sikandara-Kanpur Dehat and Kaunch-Jalaun which was approved vide U.P. Govt. letter No.1201/89-vya.Shi.-2013-5(P)/2010 dated 29.03.2013. It has been stated in the letter that said work will be done through PACCFED.
(iv) A letter No.356/2016/4128/89-vya. Shi.Kon. Vi.Vi.- 2016-106(S)/2012TC-2 dated 29.12.2016 of Dy. Secretary, U.P. Govt. to Director, Training and Employment, U.P., Lucknow regarding sanction of installment of Rs.153.52 Lakhs against approved revised cost of Rs.641.41 Lakhs in respect of work of construction of buildings of ITI under at Kaunch-Jalaun which was approved vide U.P. Govt. letter No. 25/26-ba.pra:-2014-106(M)/2012 dated 20.01.2014.
(v) A letter No.39/2015/415/89-vya.Shi. Kon. Vi.Vi.-2015- 106(M)/2012 dated 09.03.2015 of Dy. Secretary, U.P. Govt. to Director, Training and Employment, U.P., Lucknow regarding sanction of installment of Rs.200 Lakhs against approved cost of Rs.487.89 Lakhs in respect of work of construction of buildings of ITI under at Kaunch-Jalaun which was approved vide U.P. Govt. letter No. 25/26- ba.pra.-2014-106(M)/2012 dated 20.01.2014.
(vi) A Memorandum of Understanding dated 12.11.2011 between Governor of U.P. through Uttar Pradesh Madhyamik Siksha Abhiyan, Lucknow and PACCFED Lucknow, through Chief Engineer, PACCFED for building of New Govt. High Schools in different districts of Uttar Pradesh for cost of Rs.58.12 Lakhs as per G.O. No.1916/15-07-2010- 1(78)/2010 dated 20.10.2011.
It is observed from the details of the documents provided by appellant that work for construction of residential buildings, building of Government Industrial Training Institute, New High Schools of government was allotted to the U.P. 8 Service Tax Appeal No.70681 of 2025 Processing & Construction Co-Operative Federation Ltd. (PACCFED) by different departments of U.P. Govt..
4.4.3 The provisions of S. No. 12, 12A, 39 and 54 of the Notification No.25/2012-ST dated 20.06.2012 provides for services in respect of specified works to Govt./Governmental Authority/Local Authority or by Govt./Governmental Authority/Local Authority. From the details of MOU's provided by the appellant, it is observed that works of building of Government Industrial Training Institute and New High Schools of government have been allotted to U.P. Processing & Construction Co-Operative Federation Ltd. (PACCFED) by U.P. Govt. and the same are exempted in nature as the construction works of civil buildings of non-commercial purpose pertaining to period prior to 01.03.2015 are under purview of exempted works as per S. No.12A of the Notification No.25/2012-ST dated 20.06.2012.
4.4.4 It is observed that work contract for construction of residential buildings pertains to dated 15.09.2015 which is beyond stipulated date 01.03.2015 as per S. No. 12A of the Notification No.25/2012-ST dated 20.06.2012. Therefore, this main contract between U.P. Govt. and U.P. Processing & Construction Co-Operative Federation Ltd.(PACCFED) do not qualify as exempted nature of work contract and the same is leviable to service tax.
4.4.5 Now it is observed that payments received by the appellant on account of providing sub-contract works to the exempted nature of work contracts of Government Industrial Training Institute and New High Schools of government is to be examined. The appellant has provided a reconciliation chart of payment received against the different work orders of U.P. Processing Construction Co- Operative Federation Ltd. (PACCFED), payment certificate of 9 Service Tax Appeal No.70681 of 2025 the service recipient, Form 26AS for the period 2015-16 and 2016-17.
4.4.6 It is observed from the details of these documents that the appellant has received total of Rs.18,20,634/ on account of construction of Government Industrial Training Institute, Konch, Jalaun from U.P. Processing & Construction Co-Operative Federation Ltd. (PACCFED). The payment receipts shown in the reconciliation chart are co-relatable with the payments reflecting in Form 26AS for the period 2016-17. Thus, it is observed that the appellant has substantiated its claim of receipt of Rs.18,20,634/- as sub- contractor to the exempted nature of work contract and therefore the appellant are exempted from payment of service tax as per S. No.29(h) of the Notification No.25/2012-ST dated 20.06.2012.
4.4.7 Further, the appellant has provided details of payments received on account of sub-contract to the main contract of construction of residences at Madawara, Lalitpur which has been found to be taxable in nature. On going through the details of the reconciliation chart, payment certificates and Form 26AS, it is observed that the appellant has received total of Rs.31,38,466/- on account of the work orders of the sub-contract for main contract of construction of residences at Madawara, Lalitpur.
4.4.8 On perusal of the details of the work order of construction of residences at Madawara, Lalitpur, it is observed that work pertains to new construction of building along with material which is taxable as work contract and therefore abatement in terms of Rule 2A(ii) of the Service Tax(Determination of Value) Rules, 2006 is applicable to it. Further, it is observed that abatement of 60% on the gross amount was already accorded in the impugned order for calculation of service tax liability against the appellant 10 Service Tax Appeal No.70681 of 2025 considering the work contract as original work under the provisions of Kule 2A(ii) of the Service Taxį Determination of Value) Rules, 2006.
4.4.9 It is observed that appellant has further claimed in that service tax liability in the case of work contract services provided to U.P. Processing & Construction Co-Operative Federation Ltd. (PACCFED) falls under Notification No.30/2012-ST dated 20.06.2012 which provides for 50% service tax liability upon the service recipient for liability arising on account of work contract services. It is observed that Notification No.30/2012-ST dated 20.06.2012 provides that in case of providing of work contract service, if service recipient is business entity registered as body corporate, the service tax liability is as under:
S. Description of a service % S. Tax payable by % S. Tax No. service provider payable by any person liable for paying service tax other than the service provider 9 in respect of services provided or 50% 50% agreed to be provided in service portion in execution of works contract It is observed that U.P. Processing & Construction Co-
Operative Federation Ltd. (PACCFED) is service recipient in the instant case and it is apparent from the name of the entity that it is Limited Co. as per its constitution. Therefore, U.P. Processing & Construction Co-Operative Federation Ltd. (PACCFED) qualifies to be a specified person for 50% service tax liability as service recipient in terms of Notification No.30/2012-ST dated 20.06.2012.
4.4.10 Coming to Point No.(iii), it is observed that the appellant has claimed that they are eligible for threshold exemption under Notification No.33/2012-ST dated 20.06.2012 as their taxable turnover for the previous year 11 Service Tax Appeal No.70681 of 2025 F.Y. 2015-16 is below Rs.10 Lakhs. It has been submitted by appellant that receipt of Rs.61,02,865/-during 2015-16 pertains to exempted nature of works provided to government department/government agencics and taxable turnover is below Ra. 10 Lakhs. It is observed that the appellant has not provided any documentary evidence to show that they have provided exempted nature of services to government department/government agencies. In absence of any documentary evidence, the claim of the appellant that their taxable turnover is below Rs.10 Lakhs during 2015-16 and they are eligible for threshold exemption under Notification No.33/2012-ST dated 20.06.2012 is not proper and sustainable.
4.4.11 In view of the above examination and analysis, the service tax liability against the appellant needs to be re- quantified as under:
S. No. Nature of service Gross Taxable Value Service Tax S. Tax liability(50%) as per amount liability@15% Notfn. No.30/2012-ST received dated 20.06.12 1 Taxable work) 3138466 1255386 188308 94154 2 Exempted work 1820634 Nil Nil Nil 4959100 1255386 188308 94154 Thus, it is seen that appellant is liable to pay service tax of Rs.94,154/- for the period 2016-17. It is further observed that appellant failed to pay the due service tax within the stipulated period of time limit, therefore they are also found liable for payment of interest at the applicable rate under Section 75 of the Act.
4.5 It is observed that extended period has been invoked in the instant case on the grounds of suppression of facts with intent to evade payment of service tax by the appellant as the fact of non-payment of service tax on the value of services received during 2016-17 has been detected only consequent to enquiry made by the department. It is observed that the fact of providing taxable services was not disclosed on their own by the appellant to the department 12 Service Tax Appeal No.70681 of 2025 clearly indicates the intention of the appellant to evade the payment of service tax as department detected the contraventions on the part of the appellant after conducting enquiry against them. It is therefore observed that extended period clause has been rightly invoked against the appellant and they are liable for penalty under Section 78 of the Act.
4.6 Regarding imposition of other penalties in the impugned order, it is observed that contravention of Section 66B, 67, 68, 69 and Section 70 of the Act read with Rule 6 and 7 of the Rules by the appellant is evident on records and therefore the penalties imposed against them under Section 77(1)(c), 77(1)(d), 77(2) and Section 70 of the Act in the impugned order is proper and justified.
4.7(i) It is also observed that though the appellant have relied upon case laws that the demand solely raised on the basis of figures of ITR/26AS is not sustainable and imposition of penalties not justified in their case but they have not given any justification as to how these decisions are applicable to the facts of their case, especially after introduction of negative list of services. I also find that the Hon'ble Supreme Court in the case of Punjab National Bank vs. R.L. Vaid 2004 (172) E.L.T. 24 (S.C.), has held at Para 5, as under:
"5. We find that the High Court has merely referred to the decision in R.K. Jain's case (supra) without even indicating as to applicability of the said decision and as to how it has any relevance to the facts of the case. It would have been proper for the High Court to indicate the reasons and also to spell out clearly as to the applicability of the decision to the facts of the case. There is always peril in treating the words of a judgment as though they are words in a legislative enactment and it is to be remembered that judicial 13 Service Tax Appeal No.70681 of 2025 utterances are made in the setting of the facts of a particular case. Circumstantial flexibility, one additional or different fact may make a difference between conclusions in two cases.
4.7(ii) Similarly, the Hon'ble Supreme Court in the case of CCE , Bangalore vs. Srikumar Agencies 2008 (232) E.L.T. 577 (S.C.), inter alia, held, as under:
Precedents Court decision not statute Reliance thereon without discussion of facts Decisions not to be relied upon without discussing similarity of facts -Judgments of courts not to be construed as statutes - Circumstantial flexibility, additional or different fact may make a world of difference between conclusions in two cases 4.7(iii) In view of the above judicial pronouncement, I find that mere citing of courts/tribunal judgment is not sufficient but applicability needs to be discussed explicitly.
7. On going through the appeal records, I do not find any ingredient of willful misstatement, suppression of fact, fraud etc with an intent to evade payment of Service Tax. The Appellant was all along under a bonafide belief that since they are providing services to Government Departments/Government Authorities i.e. i.e. U.P. Processing & Construction Co-Operative Federation Ltd. (PACCFED) which is related to construction of Civil Structure i.e. ITI Campus, High Schools and Residential houses in Tehsil and work contracts were allotted to main contractor much prior to 01.03.2015. These constructions are for self use by government and floated by government entities for other than business and commerce. It has been claimed by the appellant that their works falls under exemption category as per S. No.12, 12A, 14, 39 and 54 read with 29(h) of Notification No.25/2012-ST dated 20.06.2012.
14 Service Tax Appeal No.70681 of 2025
8. In view of the above observations the penalties imposed under Section 78 is liable to be set aside and I do so. Further, the other penalties imposed under Sections 77(1)(a), 77(1)(c), 77(1)(d), 77(2) and 70 imposed for default in compliance of various provisions is uncalled for. Since the Appellant had not taken registration with the Service Tax Department under the bonafide belief that the services provided by him are fully exempt and he is neither liable to collect and pay Service Tax, nor required to take registration and file ST-3 Return etc. hence imposition of penalty under various Sections is unjustified and is liable to be set aside. Accordingly, penalty of Rs.10,000/- each imposed under Sections 77(1)(a), 77(1)(c), 77(1)(d), 77(2) is set aside.
9. Penalty of Rs.20,000/- imposed under Section 70 of the Finance Act is also liable to be set aside and I do so.
10. Confirmation of demand of Service Tax to the tune of Rs.94,154/- is upheld.
11. Appeal filed by the Appellant is partly allowed in the above terms.
(Dictated and pronounced in open court) Sd/-
(P. K. CHOUDHARY) MEMBER (JUDICIAL) Nihal