Custom, Excise & Service Tax Tribunal
G N Construction vs Jalandhar on 16 December, 2019
1 Service Tax Appeal No. 61288 of 2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
CHANDIGARH
~~~~~
REGIONAL BENCH - COURT NO. 1
Service Tax Appeal No. 61288 of 2019
[Arising out of OIO No. LUD-EXCUS-000-COM-003-19-20 dated 28.06.2019
passed by the Commissioner of CGST, Jalandhar]
G N Construction : Appellant (s)
Vs
CCE & ST- Jalandhar : Respondent (s)
APPEARANCE:
Shri Sudhir Malhotra, Advocate for the Appellant Shri Rajiv Gupta and Shri H. S. Brar, Authorised Representative for the Respondent CORAM : HON'BLE Mr. ASHOK JINDAL, MEMBER (JUDICIAL) HON'BLE Mr. BIJAY KUMAR, MEMBER (TECHNICAL) ORDER No. A/61113/2019 Date of Hearing:29.11.2019 Date of Decision:16.12.2019 Per : Mr. Ashok Jindal The appellant is in appeal against the impugned order, demanding service tax amounting to Rs. 4,97,27,521/- and equivalent amount of penalty under Section 78 and a penalty of Rs. 1,00,000/-
under Section 77 (2) of the Finance Act, 1994 for the period 2013-14 to 2016-17.
2. The facts of the case are that the appellant was engaged in providing Construction services in terms of "Works Contract", being composite contract as per the works orders. The appellant was paying service tax, therefore, a show cause notice dated 21.11.2013 was issued to the appellant to demand service tax on 23.10.2018 and to 2 Service Tax Appeal No. 61288 of 2019 impose penalty on the appellant. The matter was adjudicated, the demand of service tax was confirmed by invoking the extended period of limitation alongwith interest and penalty stated as above were also confirmed. Against the said order, the appellant is before us.
3. Ld. Counsel for the appellant submits that the appellant has provided services to Government Educational Institutions, Government Hospitals and other Government works and to Charitable Trust. The details of the services provided by the appellant are as under:-
2013-14 SNo. Name of Work Name of Department Gross Amount received A. B. C. D.
1. EWS Flats Pradhan Mantri Aawas Yojna (EWS Flats 2,38,69,605/-
of Carpet area 45 Sqm), Improvement Trust, Amritsar
2.* RCC Grain Shed in Punjab Mandi Board, Tran- Taran 28,92,000/-
Khadoor Sahib
Total 2,67,61,605/-
2014-15
SNo. Name of Work Name of Department Gross Amount
received
A. B. C. D.
1. EWS Flats Pradhan Mantri Aawas Yojna (EWS Flats 12,68,45,478/-
of Carpet area 45 Sqm), Improvement
Trust, Amritsar
2.* RCC Grain Shed in Punjab Mandi Board, Tran- Taran 45,49,624/-
Khadoor Sahib
3. Construction of Girl Khalsa College Girl Hostel, Amritsar - 51,46,000/-
Hostel at Khalsa Charitable Trust U/s 12AA of Income
College, Amritsar Tax Act
Total 13,65,41,102/-
2015-16
SNo. Name of Work Name of Department Gross Amount
received
A. B. C. D.
3 Service Tax Appeal No. 61288 of 2019
1. EWS Flats Pradhan Mantri Aawas Yojna (EWS Flats 1,80,92,639/-
of Carpet area 45 Sqm), Improvement
Trust, Amritsar
2. Multi-level Car Government Medical Collage and 4,86,35,277/-
Parking Hospital
3. BSF quarter at BSF Defence Campus 46,70,693/-
Kangra
4.* RCC Grain Shed in Punjab Mandi Board, Tran Taran 10,76,135/-
Khadoor Sahib
5. Meritorious School at Government Educational Building 8,60,54,081/-
Ferozepur
6. Construction of Girl Khalsa College Girl Hostel, Amritsar - 1,67,00,840/-
Hostel at Khalsa Charitable Trust U/S 12AA of Income Tax
College, Amritsar Act
7. Construction of ITI Government Education Building 1,83,27,554/-
as Adampur
Total 19,35,57,219/-
2016-17
SNo. Name of Work Name of Department Gross Amount
received
A. B. C. D.
1. Repair & Renovation Medical College, Amritsar 3,62,93,441/-
of Bio chemistry,
physiology, forensic
SPM & CFG &
Nursing Hostel
2. Repair & Renovation Medical College, Amritsar 2,28,69,804/-
Ward and Corridor
with construction of
demo rooms
3. Repair & Renovation Guru Nanak Dev Hospital, Amritsar 1,67,98,995/-
of Anatomy
Pathology, Micro
Biology
Pharmacology
4. Repair & Renovation Medical College, Amritsar 6,96,03,117/-
OT & Trauma Centre
with Bebe Nanki and
Dr. Car Parking
5. Repair & Renovation Medical College, Amritsar 1,68,70,995/-
Ward and Corridor
with construction of
demo rooms
6. Repair & Renovation Charitable Trust under section 12AA of 4,00,000/-
sub-office (Ajit Income Tax Act
Newspaper) office,
Taylor Road,
Amritsar
Total of repair works 16,28,36,352/-
7. Construction of Boys Medical College, Amritsar 1,41,75,856/-
4 Service Tax Appeal No. 61288 of 2019
and Girls Hostel
8. Construction of Medical College, Amritsar 7,73,71,451/-
Multi-Level Parking
and Admin Block
9. Construction of BSF Bn. HQ Kangra 1,81,92,386/-
Type-II/48 Nos. F/S
residential quarters
including electrical
works
10. Construction of Government Educational Institution 17,30,00,692/-
Meritorious School at
Ferozpur
11. Construction of Girl Khalsa College Girl Hostel, Amritsar - 8,33,569/-
Hostel at Khalsa Charitable Trust U/S 12AA of Income Tax
College, Amritsar Act
12. Construction of ITI Government Educational Building 1,54,56,522/-
as Adampur
13. Construction of Foot Government Bridge 4,17,84,900/-
Over Bridge at BRTS
project at Amritsar
14. Construction of Foot Government Bridge 1,21,24,000/-
Over Bridge at BRTS
project at Amritsar
Total of original works 35,29,39,376/-
Grand Total of construction during 2016-17 51,57,75,728/-
The adjudicating authority dropped the demand against the
Construction Service of RCC Grain Shed in Khadoor Sahib and rest of the demands were confirmed against the appellant. The appellant is contesting the demand on the following grounds:-
For construction of EWS Flats of carpet area 45 Sqm per flat.
The appellant has entered into contract with Improvement Trust, Amritsar. He further submits as under:-
"2.1 The appellant entered into contract with different government body and charitable institution for rendering services as detailed in Table above, as under:-
i) For construction of EWS Flats of carpet area 45 Sqm per flat, the appellant entered into contract with Improvement Trust, Amritsar.
ii) For construction of Multi-level Car Parking for Government Medical College and Hospital - entered into contract with PWD B & R (Public Works Department Building and Roads), Amritsar; Repair and renovation work at 5 Service Tax Appeal No. 61288 of 2019 Medical college, Amritsar - contract with PWD B & R, Amritsar; Meritorious School at Ferozpur, Contract with PWD B & R, Ferozpur; Construction of foot-over bridge at Amritsar - contract entered with PWD B & R, Amritsar.
iii) BSF residential Quarters - entered into contracts with CPWD (Central Public Works Department).
iv) construction of ITI Adampur - entered into contract with PSIEC (Punjab Small Industries & Export Corporation Ltd.) , Chandigarh;
v) construction of Khalsa College, Girls Hostel, Amritsar and repair, renovation of Ajit Newspaper office at Amritsar - contract with Trust.
3. The Ntfn. No. 30/2012 ST inter-alia stipulates that service tax was payable 50% each by provider and recipient of service resp. in respect of taxable services provided to a business entity registered as body corporate located in taxable territory. The clause 1 (v) to Ntfn. No. 30/2012 ST reads as under:-
" (v) provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers to any person who is not in the similar line of business or supply of manpower for any purpose or service portion in execution of works contract by any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory to a business entity registered as body corporate, located in the taxable territory. "
3.1 The term "business entity" has been defined under section 65B (17) of Finance Act, 1994 and it reads as under:-
Section 65B (17) "business entity" means any person ordinarily carrying out any activity relating to industry, commerce or any other business or profession" ;
3.2 The word "Body Corporate" was defined under erstwhile section 65 (14) of Finance Act, 2014 and it reads as under:-
Section 65 (14) "body corporate" has the meaning assigned to it in clause (7) of section 2 of the Companies Act, 1956 (1 of 1956)" ;
The Finance Act, 1994 was restructured and section 65 was omitted vide Ntfn. No. 20/2012 ST dt. 05.06.2012 w.e.f. 01.07.2012. There is no definition in body corporate given in the Finance Act, 1994 w.e.f.
6 Service Tax Appeal No. 61288 of 2019 01.07.2012. The Companies Act, 1956 was replaced by Companies Act, 2013.
The 2 (11) of Companies Act, 2013 define the word " body corporate" as under:-
Section 2 (11) "body corporate" or "corporation" includes a company incorporated outside India, but does not include--
(i) a co-operative society registered under any law relating to co-
operative societies; and
(ii) any other body corporate (not being a company as defined in this Act), which the Central Government may, by notification, specify in this behalf;
This definition is wider definition and only limit is the two exclusions mentioned therein. None of the entity is to whom services were provided fall under these two exceptions /exclusions."
4. He further submits that the PWD, CPWD, PSIEC, Trust are ordinarily carrying out activities relating to business/profession and accordingly they are business entity and body corporate, therefore, they are entitled for the benefit of Notification No. 30/2012-ST dated 20.06.2012 at Sr. No. 9. He further submitted that the said authority constructing flats for use below of poverty line are also exempt from service tax as held by the Hon‟ble Punjab and Haryana High Court in the case of Bharat Bhushan Gupta & Company vs. State of Haryana 2016 (44) STR 195 (P&H). He further submitted that the said services provided by the contractors fall within exemption Clause 12 of Notification No. 25/2012-ST dated 20.06.2012 effective from 01.07.2012 and from that date board could not deduct service tax from bills of contractor. It has been further held that board is not entitled to pass on the burden of service tax payable on its part. Therefore, he prayed that the flats constructed for the people below 7 Service Tax Appeal No. 61288 of 2019 poverty line, no service tax is payable. The bridges constructed by the appellant are exempt from payment of service tax. Further, in terms of Notification No. 30/2012-ST dated 20.06.2012 Sr. No. 9, they are liable to pay 50% of service tax. In the said benefit is to be given to the appellant, the appellant liability will be reduced substantially.
5. On the other hand, the arguments advanced by the Ld. Advocate were opposed by the Ld. AR who submits that for low cost houses having carpet area of 60 Sqm, the housing project should be approved by the competitive authority empowered under the „Scheme of Affordable Housing in the Partnership‟ framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India and same is not the case of the appellant, therefore, the appellant is not entitled for the said benefit. For construction of bridges, the Ld. AR fairly submitted that the same is covered under Notification No. 12/2012-ST dated 17.03.2012 at Sr. No. 13.
6. He further submitted that the exemption provided at Sr. No. 14
(c) has been withdrawn with effect from 01.03.2015 through Notification No. 06/2015-ST 01.03.2015. He further submits that the appellant is not entitled to get the benefit of Notification No. 30/2012- ST dated 20.06.2012 on the ground that the services are to be provided to a business entity registered as body corporate and located in the taxable territory. It is his submission that the service recipient is not body corporate; therefore, the appellant is not entitled for the said benefit.
7. Heard the parties and considered the submissions.
8 Service Tax Appeal No. 61288 of 2019
8. On careful consideration and submissions made by both sides, we find that the services provided by the appellant can be classified under various categories:-
(a) Construction of EWS Flats upto 31.03.2015 and the other services whether they have been provided to body corporate or not?
Consequently, the appellant is entitled to the benefit of Notification No. 30/2012-ST dated 20.06.2012 at Sr. No. 9.
9. For better appreciation, the Notification No. 12/2012-ST dated 17.03.2012 is extracted below:-
"12. Services provided to the Government or local authority by way of erection, construction, maintenance, repair, alteration, renovation or restoration of -
(a) a civil structure or any other original works meant predominantly for a nonindustrial or non-commercial use;
(b) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958);
(c) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment;
(d) canal, dam or other irrigation works;
(e) pipeline, conduit or plant for (i) drinking water supply (ii) water treatment (iii)sewerage treatment or disposal; or
(f) 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 Finance Act;
13. Services provided by way of erection, construction, maintenance, repair, alteration, renovation or restoration of,-
(a) road, bridge, tunnel, or terminal for road transportation for use by general public;
9 Service Tax Appeal No. 61288 of 2019
(b) building owned by an entity registered under section 12 AA of the Income tax Act, 1961(43 of 1961) and meant predominantly for religious use by general public;
(c) pollution control or effluent treatment plant, except located as a part of a factory; or
(d) electric crematorium;
14. Services by way of erection or construction of original works pertaining to,-
(a) airport, port or railways;
(b) single residential unit otherwise as a part of a residential complex;
(c) low- cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the 'Scheme of Affordable Housing in Partnership' framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India;
(d) post- harvest storage infrastructure for agricultural produce including a cold storages for such purposes; or
(e) mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages;"
10. Further, the Notification No. 30/2012-ST dated 20.06.2012 is also extracted below:-
"Government of India Ministry of Finance (Department of Revenue) Notification No. 30/2012-Service Tax New Delhi, the 20th June, 2012 In exercise of the powers conferred by sub-section (2) of section 68 of the Finance Act, 1994 (32 of 1994), and in supersession of (i) notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 15/2012-Service Tax, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i),vide number G.S.R 213(E), dated the 17th March, 2012, and (ii) notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 36/2004-Service Tax, dated the 31st December, 2004, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 849 (E), dated the 31st December, 2004, except as respects things done or omitted to be done before such supersession, the Central Government hereby notifies the following taxable services and the extent of service tax payable thereon by the person liable to pay service tax for the purposes of the said sub-section, namely:-
I. The taxable services,-
10 Service Tax Appeal No. 61288 of 2019 (A) (i) provided or agreed to be provided by an insurance agent to any person carrying on the insurance business;
(ii) provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road, where the person liable to pay freight is,-
(a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948);
(b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India;
(c) any co-operative society established by or under any law;
(d) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder;
(e) any body corporate established, by or under any law; or
(f) any partnership firm whether registered or not under any law including association of persons;
(iii) provided or agreed to be provided by way of sponsorship to anybody corporate or partnership firm located in the taxable territory;
(iv) provided or agreed to be provided by,-
(A) an arbitral tribunal, or (B) an individual advocate or a firm of advocates by way of support services, or (C) Government or local authority by way of support services excluding,- (1) renting of immovable property, and (2) services specified in sub-clauses (i), (ii) and (iii) of clause (a) of section 66D of the Finance Act,1994, to any business entity located in the taxable territory;
(v) provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers to any person who is not in the similar line of business or supply of manpower for any purpose or service portion in execution of works contract by any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory to a business entity registered as body corporate, located in the taxable territory;
(B) provided or agreed to be provided by any person which is located in a non- taxable territory and received by any person located in the taxable territory; (II) The extent of service tax payable thereon by the person who provides the service and the person who receives the service for the taxable services specified in (I) shall be as specified in the following Table, namely:-
Table Sl.No Description of a service Percentage Percentage . of service of service tax payable tax payable by the by the 11 Service Tax Appeal No. 61288 of 2019 person person providing receiving service the service 1 in respect of services provided Nil 100% or agreed to be provided by an insurance agent to any person carrying on insurance business 2 in respect of services provided Nil 100% or agreed to be provided by a goods transport agency in respect of transportation of goods by road 3 in respect of services provided Nil 100% or agreed to be provided by way of sponsorship 4 in respect of services provided Nil 100% or agreed to be provided by an arbitral tribunal 5 in respect of services provided Nil 100% or agreed to be provided by individual advocate or a firm of advocates by way of legal services 6 in respect of services provided Nil 100% or agreed to be provided by Government or local authority by way of support services excluding,- (1) renting of immovable property, and (2) services specified in sub-clauses
(i), (ii) and (iii) of clause (a) of section 66D of the Finance Act,1994 7 (a) in respect of services provi Nil 100 % ded or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on abated value to any person who is not engaged in the similar line of business
(b) in respect of services provi 60% 40% ded or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on non abated value to any person who is not engaged in the similar line of business
8. in respect of services provided 25% 75 % or agreed to be provided by way of supply of manpower for 12 Service Tax Appeal No. 61288 of 2019 any purpose
9. in respect of services provided 50% 50% or agreed to be provided in service portion in execution of works contract 10 in respect of any taxable Nil 100% services provided or agreed to be provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory Explanation-I. - The person who pays or is liable to pay freight for the transportation of goods by road in goods carriage, located in the taxable territory shall be treated as the person who receives the service for the purpose of this notification.
Explanation-II. - In works contract services, where both service provider and service recipient is the persons liable to pay tax, the service recipient has the option of choosing the valuation method as per choice, independent of valuation method adopted by the provider of service.
2. This notification shall come into force on the 1st day of July, 2012. "
11. For EWS Flats constructed by the appellant, the appellant is claiming the benefit under Sr. No. 12 (a) of the said notification. As per the said provision, if the said services provided to Government or local authority by way of construction meant predominantly for use other than for commerce, industry, or any other business or profession.
12. Admittedly, these EWS Flats have been constructed by the appellant for Improvement Trust, Amritsar. The said flats were distributed by the Government among jhuggi jhopri residents at much below than the cost of construction. The said flats were not constructed for any commercial gain, therefore, we hold that the appellant is entitled for the benefit of Notification No. 25/2012-ST dated 20.06.2012 at Sr. No. 12 (a) and (c). Therefore, on the amount for construction of EWS Flats, the appellant is not entitled to pay 13 Service Tax Appeal No. 61288 of 2019 service tax. In view of this, for the period prior to 31.03.2015, the appellant have not to pay service tax on the construction of EWS Flats.
13. We further take a note of the fact that the said exemption has been taken over by the Notification No.06/2015-ST dated 01.03.2015 with effect from 01.04.2015.
14. We further take a note of the fact that in the case of Bharat Bhushan Gupta & Company (supra) observed as under:-
"The Board has been constituted in terms of the provisions of Section 3 of the Act, as was enacted by the State Legislature. It is a body corporate which consists of a Chairman, a Chief Administrator and such other members, as the State Government may, from time to time, appoint by a notification. The Chief Administrator shall be a person from amongst the officers of the rank of Head of the Department or Joint Secretary of the State Government. It is termed to be a local authority for the purposes of Land Acquisition Act, 1894. Section 20 of the Act provides that subject to control of the State Government the Board may incur expenditure on framing and execution of such housing schemes as may be considered necessary from time to time or as may be entrusted to it by the State Government. Every year, the Board is to prepare a budget in advance for the next year and place it before the State Government for its approval. After sanction is granted by the State Government, the same is published in the Official Gazette. The Board is authorised to borrow money for implementation of the projects, as approved with prior approval of the State Government. Section 72 of the Act provides that the State Government shall exercise superintendence and control over the Board and its officers. The aforesaid provisions of the Act clearly show that the Board is a Governmental Authority, as it is fully under the control of the State Government"
It was further observed by the Hon‟ble High Court as under:-
"21.In view of our aforesaid discussion, it can safely be opined that for the kind of contract entered into between the petitioners and the Board, no service tax is leviable, hence, the action of the Board in deducting part of the service tax, though payable in the hands of the Board, if tax is leviable, from the bills of the petitioners is declared to be illegal.
Issue No. (ii) :
22.Another issue was raised regarding liability for payment of service tax, if payable. Though in view of our aforesaid findings, the issue has lost significance, however, as the argument was raised, we will touch upon the same. Condition 14 Service Tax Appeal No. 61288 of 2019 No. 3 in the additional conditions, as provided for in the contract entered into between the parties, reads as under :
"3.Royalty, Sales Tax, Excise Duty, Octroi, Service Tax or any other tax or levy, shall be paid by the contractor direct to the respective department in accordance with their rules and regulations enforce from time to time, without any liability to the Housing Board Haryana."
[Emphasis supplied]
23. The stand of the petitioners was that as per the aforesaid contract, the petitioners could not shift their liability of any kind of tax on the Board. Where any liability, as per law, is on the Board, that cannot be shifted on the contractors by way of the aforesaid clause. As per the provisions of Finance Act, 1994, as amended up to date read with Notification No. 30/2012-S.T., dated 20- 6-2012 on the works contracts the liability is 50% on the contractor, whereas 50% is on the contractee, i.e., service provider and the service recipient. The stand of the petitioners was that for any alleged levy on the petitioners, namely, the contractors/service provider, the department never issued any notice seeking to levy the tax. Notice was issued to the Board. From the running bills of the petitioners, the Board had deducted the amount of tax, which is to be paid by the Board, in case the tax is leviable, which was totally uncalled for. A perusal of the aforesaid clause shows that the contractor is liable to pay various taxes, as mentioned in the clause, directly to the department in accordance with the Rules and the Regulations in force from time to time. The case of neither of the parties is that the liability, which may be put on the contractor/service provider, if tax is leviable, is being passed on to the Board, as the scheme of the Act provides for levy of tax 50 : 50 on service provider and the service recipient. Hence, the action of the Board, even if it is assumed that tax is leviable, to pass on their share of burden as per the provisions of the Act on the contractors is not envisaged in the clause.
25.In view of our abovesaid discussion, the questions, as framed above, are answered as under :
(i) On the contract for construction of BPL houses, as awarded by the Board to the petitioners, no service tax is leviable w.e.f. 1-7-2012; and
(ii) the Board is not entitled to pass on the burden of service tax payable on its part, if the tax is leviable, upon the contractors."
Therefore, we hold that for the period prior to 01.04.2015, the appellant is not liable to pay service tax at all on construction of EWS Flats, but thereafter, the appellant is liable to pay only 50% of the service tax on them in terms of Notification No. 30/2012-ST dated 20.06.2012 at Sr. No. 9.
15 Service Tax Appeal No. 61288 of 2019
15. We further take a note of the fact that in the rest of the services, it is objected by the revenue that the said services have not been provided to the business entity registered at body corporate.We find that the construction of Multi-level car parking for Government Medical College and Hospital and contract was entered by PWD, B&R [Public Works Department (Building and Roads)], Amritsar; Repair and renovation work at Medical College, Amritsar to a contract with PWD (B & R), Amritsar; Meritorious School at Ferozpur to a contract with PWD (B & R), Ferozpur; Construction of foot-over bridge at Amritsar to a contract with PWD (B & R), Amritsar.The Sr. No. 9 in the Notification No. 30/2012-ST dated 20.06.2012 is available to the appellant if they provided services to a business entity registered at body corporate. The definition of "business entity‟ has been defined under Section 65B (17) of Finance Act, 1994 which reads as under:-
Section 65B (17) "business entity" means any person ordinarily carrying out any activity relating to industry, commerce or any other business or profession" ;
3.2 Further, the word "Body Corporate" was defined under Section 65 (14) of Finance Act, 2014 which reads as under:-
Section 65 (14) "body corporate" has the meaning assigned to it in clause (7) of section 2 of the Companies Act, 1956 (1 of 1956)" ;
The Finance Act, 1994 was restructured and section 65 was omitted vide Ntfn. No. 20/2012 ST dt. 05.06.2012 w.e.f. 01.07.2012.
There is no definition in body corporate given in the Finance Act, 1994 w.e.f. 01.07.2012. The Companies Act, 1956 was replaced by Companies Act, 2013.
16 Service Tax Appeal No. 61288 of 2019 The 2 (11) of Companies Act, 2013 define the word " body corporate" as under:-
Section 2 (11) "body corporate" or "corporation" includes a company incorporated outside India, but does not include--
(i) a co-operative society registered under any law relating to co-operative societies; and
(ii) any other body corporate (not being a company as defined in this Act), which the Central Government may, by notification, specify in this behalf;
This definition is wider definition and only limit is the two exclusions mentioned therein. None of the entity is to whom services were provided fall under these two exceptions /exclusions. The Improvement Trust are "Body Corporate" as per section 3 of „The Punjab Town Improvement Act, 1922‟ which reads as under:-
" Section 3 - Creation and incorporation of trust The duty of carrying out the provisions of this Act in any local area shall, subject to the conditions and limitations hereinafter contained, be vested in a board to be called "The (name of town) Improvement Trust" hereinafter referred to as "The Trust"; and every such board shall be a body corporate and have perpetual succession and common seal, and shall by the said name sue and be sued".
The Improvement Trust is in business of acquiring land, construction thereto and also body corporate as per section 3 of Punjab Town Improvement Act, 1922.
The PWD(B&R) are constituted under The Punjab Roads and Bridges Development Board Act, 1998 and in terms of Section 3 of the said Act defined as under :
Section 3 The Board Constituted in terms of sub-section (2), shall be body corporate having perpetual succession and a common seal with powers, subject to the provisions of this Act to
17 Service Tax Appeal No. 61288 of 2019 acquire, borrow and raise commercial loans and hold property and shall by the said name, sue and be sued. The PWD (B & R) is into the business of construction of building and roads etc. and are also body corporate in terms of section 3 of Punjab Roads and Bridges Development Board Act, 1998
16. Further, the CPWD is engaged in business / profession of design , construction and maintenance of central government non-residential building other than Railways, Airports; construction and maintenance of residential accommodation meant for central government employee providing consultancy services in planning , designing and construction of Civil Engineer products, as and when required by public undertaking and other autonomous bodies. CPWD like PWD are also body corporate.
17. Further, in terms of Section 3 of Punjab Small Industries Corporation Act, 1973, the corporation is a body Corporate defined as under :
Section 3 (1) As soon as may be after the commencement of this Act, there shall be established a Corporation to be known as " The Punjab Small Industries Corporation."
(2) The Corporation shall be a body corporate, shall have the power to acquire and hold property, both movable and immovable, subject to the provisions of this Act and shall have perpetual succession and a common seal and shall by the said name sue and be sued.
The name of Punjab State Small Industries Corporation Ltd. was converted into Punjab Small Industries& Export Corporation Ltd. w.e.f. 21.10.1982 which is engaged in business / profession to acquire and hold movable and immovable property. It also gave loan in cash or in kind or in form of building, developed plot of land in the small industry state or machinery and equipment on lease or on hire 18 Service Tax Appeal No. 61288 of 2019 purchase basis to borrower for the purpose of small, cottage and other industries. It furnishes guarantee to the scheduled banks for the repayment of loans to borrower for development of industries etc.Therefore, the same is also covered as business entity a body corporate. Therefore, we hold that the appellant has provided the services to a business entity registered at body corporate and are required to pay 50% service tax in terms of Sr. No. 9 of the Notification No. 30/2012-ST dated 20.06.2012.
18. We further take a note of the fact that during the impugned order, the appellant has also entered in Construction of Foot Over Bridge at BRTS project at Amritsar. Sr No. 13 and 14 for the services rendered during the period 2016-17 on that construction of bridges, the appellant is entitled for exemption under Notification No. 12/2012- ST dated 20.06.2012 at Sr. No. 13 (a) which reads as under:-
"Section 13 (a) A road, bridge, tunnel, or terminal for road transportation for use by general public."
19. In view of this, we pass the following order:-
(a) For construction of EWS Flats, the appellant is entitled for benefit of exemption Notification No. 12/2012-ST dated
20.06.2012 at Sr. No. 12(a) upto 31.03.2015.
(b) For services rendered for Construction of bridges, the appellant is entitled for the benefit of exemption Notification No. 12/2012-ST dated 20.06.2012 at Sr. No. 13 (a).
(c) For other services and flats constructed after 01.04.2015, the appellant is entitled for the benefit of Notification No. 30/2012-ST dated 20.06.2012 at Sr. No. 9 i.e. the appellant is liable to pay 50% of the service tax.
The appellant is directed to quantify the demand in terms of the above order and the same is to be deposited within 30 days of the 19 Service Tax Appeal No. 61288 of 2019 receipt of this order. The appellant is liable to pay interest for the intervening period. The appellant is liable to be penalized as per the impugned order, the quantification is to be done accordingly.
20. With these terms, appeal is disposed of.
(Order pronounced on 16.12.2019) (Ashok Jindal) Member (Judicial) (Bijay Kumar) Member (Technical) G.Y.