Custom, Excise & Service Tax Tribunal
Kiran Infra Engineers Ltd vs Commissioner, Cgst-Jaipur I on 13 September, 2023
1
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI.
PRINCIPAL BENCH - COURT NO. II
Service Tax Appeal No. 54800 of 2023-SM
(Arising out of order-in-appeal No. 221 (BSM)ST/JPR/2022 dated 16.09.2022 passed
by the Commissioner (Appeals), Central Excise & Central Goods and Service Tax,
Jaipur).
M/s Kiran Infra Engineers Ltd., Appellant
(formerly known as M/s Kiran Udyog)
B-141, Road No. 9D, VKI Area
Jaipur (Rajasthan).
VERSUS
Commissioner, Central Excise & CGST, Respondent
NCR Building, Statue Circle, C-Scheme,
Jaipur-302005.
.
APPEARANCE:
Shri Arjun Singh, Advocate for the appellant Shri Mahesh Bhardwaj, Authorised Representative for the respondent CORAM:
HON'BLE MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) FINAL ORDER NO.51320/2023 DATE OF HEARING/DECISION: 13.09.2023 ANIL CHOUDHARY:
The issue in this appeal is whether the appellant is liable to pay service tax under composite contract, being erection, commissioning and installation of railway signalling and telecommunication facilities and construction of Rail Over Bridges for companies other than Indian Railways.
2. The brief facts are that the appellant was registered with the Department for services under the head ECIS, GTA etc. The appellant is engaged in the business of design, supply, installation, testing and commissioning in relation to signalling and telecommunication facilities 2 for the railways and construction of Road Over Bridges (ROB) pertaining to companies other than Indian Railways.
3. The Appellant had not paid service tax on the said activity on the understanding that the same is exempt from service tax under serial No. 14 of Mega exemption notification No. 25/2012-ST. In the course of investigation by DGGSTI, Jaipur, it appeared that the appellant was liable to pay service tax on these services. Accordingly show cause notice dated 13.01.2020 was issued invoking the extended period of limitation with respect to work executed and payments received during the period 1st April,2017 to 30th June, 2017. This is the 2nd periodical notice as earlier SCN dated 3rd April, 2013 had been issued for similar dispute for the extended period 1st July, 2012 to 31st March, 2017. In response to query by the Revenue, the appellant had given reply by the letters dated 23rd September and 27th September, 2019 and it submitted the required information/data, copy of work orders/LOA. It appeared to Revenue that the appellant is required to discharge service tax liability including cess amounting to Rs.46,31,921/-. Reliance was placed on the letter issued by the Technical Officer (TRU-II), CBEC dated 02.08.2016 addressed to the AGM (Finance), RITES, clarifying that services of construction by way of laying down of tracks, merry-go-round and railway sidings for exclusive use of corporate houses and public sector undertakings, do not appear to be covered by exemption from service tax as provided in Entry 14 (a) of Notification No. 25/2012.
Admittedly, the appellant have done following work/projects as mentioned in Para 7.5 of the SCN: -
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Sl. LOA No. Description Issuing
No. Authority
1 Rites Provision of signaling & RITES LTD.
/S&T/Tender/ Telecommunication facilities at Rihand
Rihand- track hopper, workshop yard (station
Pkg.1&2/2007 No.1) and in station No. 1 to station
dated 17.09.2007 No. 4 & station area.
2 Rites S&T work in connection with RITES LTD.
/S&T/Tender/ construction of Railway Siding for
NTPC/Simhadri/2 Simhadri Super Thermal Project, Stage
010 dated II at SSTPS, Simhadri (A.P.).
09.12.2010
3 IRCON/S&T/2016 Design, Supply Installation, Testing and IRCON
4/03 dated Commissioning of Indoor and Outdoor INTERNATIONA
14.10.2016 Signalling & telecommunication work of L LIMITED
Computer Based Interlocking System,
STM, MUX etc. In connection with
construction of Railway Siding for the
proposed 3.0 MTPA Integrated Steel
Plant of NMDC limited at Nagarnar near
Jagdalpur city in Bastar District of
Chhattisgarh State.
4. The show cause notice was adjudicated on contest and the proposed demand of Rs.46,31,921/- was confirmed along with interest and further penalty was imposed under Section 76(1) for contravention of Section 67 and 68 of the Act, read with Rule 6 of the Service Tax Rules, 1994.
5. Being aggrieved, the appellant preferred appeal before the Commissioner (Appeals), who vide the impugned order was pleased to dismiss the appeal, agreeing with the findings of the Adjudicating Authority, observing that the appellant have rendered services to parties/corporations other than Indian Railways, which are meant exclusively for the private/commercial/business use of the project owners for the transportation of the goods cleared from their plant and there is no public carriage of passengers or goods. He also referred to the definition of "Railways" as per Section 2 (31) of the Railways Act, 1989, observing that as per the definition of the "Railways", it would imply that use for the public carriage, passenger or goods is essential 4 for availment of the exemption. Being aggrieved, the appellant is before this Tribunal.
6. Learned counsel for the appellant, inter-alia, urges that the issue herein is no longer res integra. This Tribunal in a catena of judgements have held that the exemption is provided in respect of railway. There is no differentiation between the public railway and/or private railway. This Tribunal in the case of Afcons Infrastructure Ltd. Vs. CCE, Mumbai-II - Mannu/CM/0410 = 2015 (38) STR 194 (Tribunal - Mumbai) was considering the taxability of civil construction/construction of viaduct and stations of Delhi Metro Railway Project for Delhi Metro Corporation under turn-key contracts entered into during the year 2006, 2007 and 2008. Revenue had raised demand of service tax under the category of CICS. This Tribunal observed that the definition of CICS as per Section 65(25)(b) excludes such activities relating to roads, ports, railways, dams etc. There is no distinction between a mono rail or any other kind of rail, therefore, the term "Railway" used therein has to be given its widest meaning to include all type of railways and all types of railway lines. Therefore, the distinction sought to be made by the Adjudicating Authority is not sustainable in law. In para 4.2 of the judgement, the Tribunal observed as follows: -
"Secondly, we do not find any basis for the conclusion drawn by the learned adjudicating authority by referring to some decision of the Government while examining the scope of the term 'railways' in the context of certain tax exemptions. There is no evidence before us to show that the Government examined the matter and came to such a conclusion, nor is there any circular or notification 5 issued by the Government in this regard. In the absence of any such decision, which is in the public domain, we are unable to accept the contention raised by the Revenue in this regard and reject the same totally. In other words, the law has to be interpreted as it stood, as held by the Hon'ble Apex Court in the case of Doypack Systems Pvt. Ltd. [Manu/SC/0300/1988:
1988 (36) ELT 201 (SC)] wherein it has been held that the notings in the Government files are not relevant for interpretation of the statutes and the statute has to be interpreted by the wordings explicitly used therein and if there is no ambiguity in the language used therein, there is no need to refer to the notings in the Government file. On that ground also, the observation of the adjudicating authority has no bearing to the facts on hand and has to be rejected. "
7. This Tribunal took notice of notification No. 12/2012 - ST, which provides for exemption from service tax with respect to the services provided by way of construction, erection, commissioning and installation of original works pertaining to railways, including mono rail or metro. Such exemption was provided with effect from 01.07.2012.
8. Learned counsel also relies on the precedent ruling of the Tribunal in Konkan Railway Corporation Ltd versus Commissioner of CGST and Central Excise in Service Tax Appeal No. 86191 of 2021 being Final Order No.86247/2022 dated 17th Feb. 2022. For the period April, 2015 to June, 2017, Konkan Railway had constructed and commissioned railway slidings, signaling, telecommunication system including associated electrical and mechanical instruments for facilitating handling of coal at Kudgai and Gadawara Super Thermal Power Projects. The Tribunal relied on the precedent ruling of this Tribunal in the case of Afcons Infrastructure Ltd. 6 (supra) and also on the ruling of the SMS Infrastructure Ltd. Vs. CCE, Nagpur - 2017 (47) STR 17 and also on the ruling of the Tribunal in AB Projects Pvt. Ltd. Vs. CCE, Nagpur - 2010 (19) STR 886 and also on the ruling in KVR Rail Infra Projects Pvt. Ltd. Vs. Commissioner of Central Excise, Secunderabad - 2019 (27) GSTL 549 and other rulings of this Tribunal. In para-9 of the Ruling in Konkan Railway Corporation Ltd. (supra), it has held as follows:-
"9. It is, thus, clear that the proposition of strict construction of intent of exemption notification must also go hand in hand and strict construction of every word/phrase therein. The exemption from tax is available to 'railways' , excluding mono rail or metro, by notification no.25/2012-ST dated 20th June, 2012 after 1st July, 2012 and, as conceded by the adjudicating authority , there being no definition of 'railway', either therein or in the Finance Act, 1994, the distinction between railway for private purpose and railway for public service cannot be artificially contrived to suit tax administration; neither can the definition in another statute be drawn upon for the purported purpose of illumination. The Railways Act, 1989 was enacted to authorize Government of India to operate the railway network of the country; it also affords a framework for administration of the railway services and jurisdictional monopoly. The 'taxable service' in Finance Act, 1994 excluding 'railways' from the ambit of the service did not place any restriction on benefit going to private railways. The statute too, did not consider it necessary to fall back on the definition of 'railways' in another statute for determination of taxability and it is not open to the adjudicating authority to arrogate that privilege in an executive capacity. The intent of exclusion prior to 1st July, 7 2012 and exemption for the period, thereafter, is abundantly clear."
9. Accordingly, learned counsel for the appellant prays for allowing their appeal and setting aside the impugned order.
10. Learned Authorised Representative for the respondent relies on the impugned order.
11. Having considered the rival contentions, I am satisfied that the appellant have done the work for railways, as is evident from the nature of work reproduced above from the show cause notice. I further find that the said works qualify for exemption under Sl.No.14(a) of Mega Exemption Notification No.25/2012- ST. This Tribunal has held in the precedent rulings that there is no distinction drawn by the statute with respect to public railways or private railways. I further find that the work has been done and or the services provided to the Government companies like RITES, NTPC, IRCON, which are wholly owned by the Government of India and the management of these companies are controlled by the Ministry of Railways.
12. In view of my aforesaid findings and observations and following the precedent rulings of this Tribunal, I allow the appeal and set aside the impugned order. The appellant is entitled to consequential benefits in accordance with law, if any.
(Order pronounced and dictated in open court).
(Anil Choudhary) Member (Judicial) Ckp