Custom, Excise & Service Tax Tribunal
Service Tax - Chennai vs Consolidated Construction Consortium ... on 10 November, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
CHENNAI
REGIONAL BENCH - COURT No. I
Service Tax Appeal No.41496 of 2013
(Arising out of order in original No. 130/2012 dated 27.12.2012 passed by the
Commissioner of Service Tax, Chennai)
Commissioner of GST and Central Excise .... Appellant
Chennai Outer Commissionerate
Newry Towers, No.2054, I Block,
II Avenue, 12th Main Road,
Anna Nagar, Chennai-600 040.
VERSUS
M/s. Consolidated Construction Consortium Ltd ...Respondent
No.5, 2nd Link Street, CIT Colony,
Mylapore, Chennai 600 004.
APPEARANCE :
Shri Sanjay Kakkar, Authorised Representative for the Appellant
Shri N. Viswanathan, Advocate for the Respondent
CORAM :
HON'BLE MR. M. AJIT KUMAR, MEMBER (TECHNICAL)
HON'BLE MR. AJAYAN T.V, MEMBER (JUDICIAL)
FINAL ORDER No.41264/2025
DATE OF HEARING: 30.10.2025
DATE OF DECISION:10.11.2025
Per Mr. Ajayan T.V.
Revenue is aggrieved by the impugned order, whereby the
adjudicating authority has dropped all the proceedings initiated
under Show Cause Notice No. 66/2011-12 dated 18.02.2012
issued by the Additional Director General, Directorate General of
Central Excise Intelligence, Bangalore (DGCEI).
2. Brief facts, as gleaned from the appeal records, are that the
Respondent is the holder of a centralized service tax registration
issued by the Commissioner of Service Tax, Service Tax
Commissionerate, Chennai under the categories of Consulting
Engineer Service, Works Contract Service and Construction of
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Residential Complex Service. DGCEI initiated an investigation
pertaining to the works contract service provided by the
Respondent to the Bangalore Metropolitan Transport Corporation,
Bangalore ( BMTC) for the construction of 'Traffic and Transit
Management Centers' (TTMC) at ITPL, Whitefield and
Koramangala, Bangalore. In the course of investigation and upon
verification of records and statements obtained of the key
personnel of the Respondent, it appeared to the Department that
apart from bus terminals, the TTMCs included business complexes
such as shops, hyper market, dormitory, food court, multi-cuisine
restaurant, parking space, advertisement space, ATM counters,
book stalls, medicine stores, bank space etc. Only the ground floor
of the TTMCs were intended to be utilised for bus terminals and
the remaining area of TTMCs were rented out to private parties on
rental basis for establishing commercial activities. It was also seen
that BMTC had issued a notification dated 07.09.2010 and
advertised in the Times of India dated 08.09.2010 inviting the
expression of interest from reputed agencies to utilise the space
of 1,11,247 square feet and 3,34,568 square feet at TTMCs ITPL
Whitefield and Koramangala respectively for commercial use. As
per the letter of the Respondent dated 23.10.2010 furnished to
the Department, the department computed that 81% and 87% of
the total built up area of the TTMCs at ITPL, Whitefield and
Koramangala respectively were being utilised for commercial
purposes.
3. Department being of the view that inasmuch as the construction
of TTMCs was as a single contract and construction of bus
terminals appeared to have not been recognised as a separate
activity, the exclusion to 'transport terminal' provided in Section
65(105)(zzza) appeared to be not applicable and therefore the
aforementioned SCN dated 18.01.2012 was issued demanding a
service tax of Rs.9,70,71,154/- for the period from September
2008 to September 2011 under proviso to Section 73(1) of the
Finance Act,1994.
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4. Pursuant to the reply filed by the Respondent, vehemently
contesting the demand and providing justification for their
contentions, after due process of law, the adjudicating authority
vide the impugned order had dropped all the proceedings initiated
under the aforementioned SCN. Aggrieved and dissatisfied with
the impugned order in original, and having preferred an appeal,
the Department is the appellant before this forum.
5. The Ld. Counsel for the Respondent, had raised an initial objection
that the review order dated 03.07.2013 passed by the Committee
of Chief Commissioners invoking Section 86(2) of the Finance Act,
1994, was almost after six months of passing the impugned order.
It was contended that while the appeal had been filed on
04.07.2013 stating the date of receipt of the impugned order as
05.03.2013, and enclosing a xerox copy of the impugned order
which is an office copy on the file of the appellant, while the order
indicated the date of dispatch as 27.12.2012 and submitted that
these facts did not inspire confidence that the review order was
passed within the time prescribed under Section 86(3) of the
Finance Act, 1994. However, at the time of hearing on
30.10.2025, the Ld. Advocate submitted at the Bar that he is not
pressing this aspect and would be submitting on merits.
6. Shri. Sanjay Kakkar, Ld. Authorised Representative, appearing for
the appellant, filed written submissions highlighting the distinction
as what, according to him, is the distinction between Transport
Terminal and Traffic and Transit Management Center (TTMC),
premised on the respective nomenclature. He submitted that
going by the records in the impugned case, TTMC as constructed
by the Respondent is a modern multi-functional hub integrating
bus parking, passenger amenities (ticketing, waiting areas),
commercial spaces (retail outlets, offices) and traffic control
facilities. While it facilitates transit, it extends beyond pure
transport infrastructure by incorporating revenue generating
elements like shops and administrative blocks. He would submit
that unlike a plain "Transport Terminal", a TTMC does not fall
squarely within the exclusionary clause of Section 65 (105) (zzza).
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The inclusion of commercial/industrial components(e.g., leasing
spaces), renders it akin to a "commercial complex", attracting tax
under section 65 (105) (zzq) (commercial/industrial construction)
or (zzzh) (construction of complex). He submits that a clear
absence of a "transport terminal" character, TTMC construction is
taxable as a works contract under (zzza). It is further submitted
that in cases where facilities blend transport and commercial use,
>blanket exemptions merit to be denied. It is also submitted that
the Department has adopted the most plausible mode of
determining the percentage of essential character (>80%) of the
service by computing the commercial portion vis a vis the entire
ECS activity.
7. Shri. N.Viswanathan, Advocate, appearing for the Respondent
submitted that the adjudicating authority has passed a well-
reasoned order and a perusal of the appeal grounds of the
appellant revenue would show that the grounds are merely a
verbatim borrowing of the allegations in the SCN, without
contesting the categorical findings of the adjudicating authority
on merits on the essential nature of the service invoking Section
65A(2) of the Finance Act, duly comparing it with other terminals
like airport or railway stations, warranting the appeal to be
dismissed in limini. He places reliance on the decision of the
Tribunal in Commissioner of C.Ex. LTU, Chennai v Areva T & D (I)
Ltd, 2011 (267) ELT 552 (Tri-Chennai). Ld. Counsel further
submits that the construction of the Transit & Traffic Management
Centers was conceived as urban renewal project under the
JNNURM and the Government of Karnataka and it is a wholly
owned Government undertaking to establish state of the art
terminus with public urban utilities and is a project fulfilling the
constitutional responsibilities of the Government.
8. He further submits that the true and essential character of the civil
structure, is that of a public transport terminal and all the
commercial establishments are incidentally established to provide
necessary amenities and facilities to the commuters which is in
complete harmony with the exclusion provided under Section 65
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(105) (zzza) of the Finance Act, 1994 as rightly held by the original
adjudicating authority.
9. Ld. Counsel further contends that the show cause notice issued to
the Respondent has failed to take note of the Board's Circular
No.80/10/2004 dated 17.04.2004 clarifying that the commercial
nature of the building is to be ascertained from the plan approval
granted for the construction. It has also been clarified that
government constructions do not attract the levy leading to the
only logical conclusion that the approval granted was for a
transport terminal only and thus fully supports the impugned
order passed in favour of the Respondent.
10. Ld. Counsel would urge that the letter of the Board addressed to
the Commissioner of Central Excise, Mysore in response to his
query clarifying an identical issue on the construction of Inter
Model Transit Centre by the Karnataka State Road Transport
Corporation and the clarification sent from Chennai Service Tax
Commissionerate to CMDA vide letter dated 22.12.2010 as non
leviability to service tax fully supports the impugned order.
11. It is also submitted by the Ld. Counsel that the notification dated
07.09.2010 by BMTC to offer additional space to various
commercial entities was made at a much later point in time of
entrusting the construction work on the Respondent herein, and
the taxability was to be determined based only on the terms of
the contract entered between the parties as held in various judicial
pronouncements.
12. Ld. Counsel further contended that the demand was barred by
limitation as the extended period of limitation was not invokable.
That there was no finding on this aspect by the original authority
solely on account of dropping the proceedings initiated in the SCN
on merits in favour of the Respondent and as such the contentions
on invoking the extended period of limitation is also urged on
behalf of the Respondent. He would also submit that in any event
the demand was sustained on the gross value which is untenable
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considering that the appellant had indeed undertaken works
contract and was entitled to the benefit of compounding scheme
at the relevant time. Ld. Counsel also submits that reliance is
placed on all the grounds and judicial pronouncements cited in
support in their reply and that on their contentions.
13. The Ld. Counsel, further submits that a similar demand sought to
be fastened on B.G.Shirke Construction Technology Pvt Ltd with
respect to the works contract undertaken by them in pursuance of
tenders invited by BMTC for construction of TTMC at Shantinagar,
Bengaluru, under the Jawaharlal Nehru National Urban Renewal
Mission ( JNNURM) was decided by the Mumbai Bench of this
Tribunal in favour of the appellant company therein and against
the Revenue and as such, the issue stands settled in the
Respondent's favour. He placed reliance on the decision in
B.G.Shirke Construction Technology Pvt Ltd v CCE & ST,
Pune-III,2020 (43) GSTL 242 (Tri-Mumbai).
14. Ld. Counsel for the appellant in rejoinder continued to harp on the
distinction that was advanced and also made a feeble attempt to
distinguish the decision stating that the relevant contract was not
considered therein. Drawing attention to the tender floated on
07.09.2010 it was contended that Hotels providing
accommodation were also being made available and as such TTMC
was more of a commercial complex than a transport terminal.
15. Heard the rival submissions on length, carefully perused the
appeal records and the citations submitted as relied upon.
16. The issues that arise for our determination are whether the
impugned order dropping all the proceedings initiated vide the
SCN No. 66/2011-12 dated 18.02.2012 is tenable and also
whether the Respondent's plea that extended period of limitation
was not invokable, has merits.
17. We find that for the relevant period, Section 65(105)(zzzza) of the
Finance Act, 1994, stipulates "taxable service" means any service
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provided or to be provided to any person, by any other person in
relation to the execution of a works contract, excluding works
contract in respect of roads, airports, railways, transport
terminals, bridges, tunnels and dams.
Explanation. --For the purposes of this sub-clause, "works
contract" means a contract wherein,--
(i) transfer of property in goods involved in the execution of
such contract is leviable to tax as sale of goods, and
(ii) such contract is for the purposes of carrying out,--
(a) erection, commissioning or installation of plant, machinery,
equipment or structures, whether pre-fabricated or otherwise,
installation of electrical and electronic devices, plumbing, drain
laying or other installations for transport of fluids, heating,
ventilation or air-conditioning including related pipe work, duct
work and sheet metal work, thermal insulation, sound
insulation, fire proofing or water proofing, lift and escalator,
fire escape staircases or elevators; or
(b) construction of a new building or a civil structure or a part
thereof, or of a pipeline or conduit, primarily for the purposes
of commerce or industry; or
(c) construction of a new residential complex or a part thereof;
or
(d) completion and finishing services, repair, alteration,
renovation or restoration of, or similar services, in relation to
(b) and (c); or
(e) turnkey projects including engineering, procurement and
construction or commissioning (EPC) projects; (Emphasis
supplied)
18. We also note that Section 65A of the Finance Act for the relevant
period, stipulates as under:
Section 65A. Classification of taxable services - (1) For the
purposes of this chapter, classification of taxable services shall be
determined according to the terms of the sub-clauses (105) of
section 65;
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(2) When for any reason, a taxable service is prima facie,
classifiable under two or more sub-clauses of clause (105) of
section 65, classification shall be effected as follows:-
(a) the sub-clause which provides the most specific
description shall be preferred to sub-clauses providing a
more general description;
(b) composite services consisting of a combination of
different services which cannot be classified in the
manner specified in clause (a), shall be classified as if
they consisted of a service which gives them their
essential character, in so far as this criterion is
applicable;
(c) when a service cannot be classified in the manner
specified in clause (a) or clause (b), it shall be classified
under the sub-clause which occurs first among the sub-
clauses which equally merits consideration;
19. At this juncture, we note that the adjudicating authority has
elaborately noted the contentions of the Respondent in
paragraphs 3 to 3.11, and after reproducing the definition of
works contract service as enunciated under Section
65(105)(zzzza) of the Finance Act, 1994 (effective from 01.06.07)
in paragraph 6 of the impugned OIO, has then gone on to hold in
paragraphs 6.3 to 7 as under:
"6.3 The basic question that is to be answered is whether the works
contract service in relation to transport terminal is liable to service tax
even if certain area of total built up area of transport terminal is used
for commercial purposes. The assessee obtained a contract for
construction of bus terminals for BMTC which is a government agency
that operates the public transport bus service in Bangalore under
JNNURM project where 35% of the cost of project was funded by the
Government of India, 15% by Government of Karnataka and remaining
50% of the project cost by M/s. BMTC. The main function of JNNURM
is to provide funds for urban infrastructure development. Thus this is
purely a government contract for providing infrastructure facilities.
When a big infrastructure project like transport terminal, airport or
railway station is constructed in the modern age, it is only logical that
not only the basic construction of transport terminal or airport would
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be done but various value added facilities like shops, food courts,
parking space, ATM centres, space for advertisements etc would be
constructed within the transport terminal, airport or railway station as
the case may be, so that they would serve as a one stop shop for the
convenience of the passengers. One cannot imagine construction of
transport terminals, airport or railway stations which merely
accommodate the buses, aircrafts or trains respectively without any
facilities. It can be seen that the basic objective behind the
construction of TTMCs is to provide public utility/civic amenities as part
of urban infrastructure to ensure good transportation to the people of
Bangalore. Only because the transport terminal is constructed, there
are other add on facilities provided in the said premises which are
incidental to the construction of the terminal. It is not a case where
the transport terminal has been constructed for the purpose of
accommodating various commercial entities, but, on the contrary,
constructed for public utility. Each city or town would be vying with
one another to provide excellent infrastructure in this era of
competition, which cannot happen without providing these facilities.
The very purpose of creating of developing infrastructure of modern
transport terminals, greenfield airports etc is to make more people
make use of the facility and in a transport terminal, where there is a
floating population involving thousands of commuters every day, it is
needless to say that the terminal has to provide excellent facilities to
the passengers. In fact, the proof of providing good infrastructure is
only in making more people use the facility. When such facilities
become inevitable, it is only normal and logical to let out the areas to
various parties for commercial consideration for the benefit of the
public who uses the terminals. Therefore, the essential character of the
construction in question is clearly construction of transport terminals
with attendant facilities and it is not a case of construction of
commercial complex with transport terminal incidental in nature. Thus
the facilities provided in the Traffic and Transit Management Centre are
an integral part of the transport terminals.
6.4 As per the definition of taxable service under Section
65(105)(zzzza) of the Finance Act, works contract in respect of roads,
airport, railways, transport terminals, bridges, tunnels and dams are
specifically excluded from the purview of taxable service. The excluded
categories viz., airport, railways, transport terminals etc are public
infrastructural facilities where the above mentioned facilities involving
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various commercial entities are a must and such infrastructure facilities
were specifically kept out of the definition of Works Contract Service.
If the interpretation made in para 6 of show cause notice i.e. TTMCs
are not transport terminals is legally sustainable, then Railway Station,
Airport Terminal would not be falling within the purview of exclusion
as similar amenities/facilities are provided therein also. In this regard
it is relevant to refer to the scope and purpose of TTMC by BMTC viz.,
the service receiver which is reproduced below:-
CONSTRUCTION OF TTMC
BMTC has planned to construct 45 Traffic & Transit Management
Centers (TTMCs) as a part of development of urban infrastructure
stated in the Comprehensive Traffic & Transportation Plan (CTTP) for
Bangalore and vision plan under JnNURM. These TTMCs are conceived
as transport infrastructure for the urban renewal project aimed at
providing one stop travel to commuters. The TTMC's comprise of state
of art Bus terminal, maintenance facilities, Public amenities, Park and
Ride facility and providing inter modal connectivity. In turn, they also
directly impact traffic congestion and address environment concerns in
the long run.
As innovative projects in transportation sector 10 TTMCs projects have
been approved by GOI under JnNURM at Jayanagar, Vijayanagar,
Banashankari, Koramangala, Shantinagar, White Field (ITPL), Kengeri,
Yeshwanthpur, Domlur & Banneraghatta at an outlay of Rs.440 Crores.
These works, entrusted on a contract basis, are at various stages of
construction and planned to be completed by July 2010. JnNURM
projects have equity of 35% GoI, and 15% GoK and balance is borne
by BMTC. Apart from this, initiative is being taken to construct another
11 projects in II phase under Public Private Partnership (PPP) for the
remaining 35 TTMC Projects.
It is seen from the above that TTMCs are nothing but a Transport
Terminal with the sole aim of providing various facilities to travelling
public. Therefore I hold that the allegation made in the notice that
TTMC is not transport terminal is not only factually incorrect but also
legally untenable and not justified.
6.5 The assessee also stated that the demand of service tax was made
on them on the TTMCs at the full rate of service tax without extending
the benefit of compounding scheme. I find that the materials in the
projects were supplied by the assessee and hence it is inappropriate to
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demand service tax on the entire project value which includes material
value.
6.6 Thus I hold that the construction of TTMCs for BMTC by the
assessee falls within the exclusion category of the definition of the
taxable service of Works Contract Service and hence I hold the activity
is not liable to service tax. The demand raised is liable for dropping.
Once it is held that construction of TTMC is not leviable to service tax,
the question of charging interest and imposition of penalties under
Section 76,77 and 78 also does not arise.
7. In view of the foregoing discussions and findings, I pass the
following order:
ORDER
In terms of the provisions of the Finance Act, 1994, I drop all the proceedings initiated under Show Cause Notice No.66/2011-12 dated 18.01.2012 issued by the Additional Director General, Directorate General of Central Excise Intelligence, Bangalore." (emphasis supplied)
20. On a perusal of the grounds urged in para 4.1.1 to 4.1.6 of the appeal preferred by the appellant Revenue, we agree with the contention of the Respondent, that they are merely a reproduction of the allegations in the show cause notice. In fact, save from a reliance placed on the decision of Commissioner of Service Tax Ahmedabad v Shilpa Constructions Pvt Ltd, 2010 (19) STR 830 (Tri-Ahmd) wherein it was held that construction of drive way cannot be equated with construction of road which is exempted from service tax, and a contention that Board's clarification issued vide F. No.137/93/2009-CX dated 7.1.2010 (on commercial construction activity in the case of Bus Terminal Constructed by Karnataka State Transport Corporation) purportedly stating that "when transport terminal facilitates customers to come to the commercial complex then the entire construction activity would be taxable", the entire grounds in para 4.1.1 to 4.1.6 is a repetition of the allegations in the SCN.
1221. We find that such reliance on the said decision has been placed without providing a copy of the same either in the appeal preferred, or at the time of submissions at the Bar. Be that as it may, we find that the said decision is wholly inapplicable as it pertained to an appeal preferred by the Revenue against a refund allowed to the appellant therein who had pleaded that service tax was not payable on construction of road. In fact the revenue's appeal therein was on the sole ground that construction of driveway cannot be equated with the construction of road in as much as such driveway was not for public utility purpose but the same was in connection with the petrol pump owned by the owner. The Tribunal in fact negated the contention holding that it was irrelevant in view of the Board's Circular No. B1/6/2005-TRU dated 27-7-05 referred therein. Thus the finding of the Tribunal in the said decision, apart from being contrary to the contention raised in the present grounds of appeal, is one that does not apply in the facts and circumstances of this case. We find that such reliance placed, is wholly misconceived.
22. Likewise, we find that the reliance on the Board's clarification is also an apparent misconstruction of the same and again without adducing the same either alongwith the appeal or at the time of submission at the Bar. In fact, appeal records reveal that the said Circular was relied on by the Respondent in its reply when it brought a letter dated 27.08.2009 of the Commissioner of Central Excise, Mysore to the notice of the adjudicating authority. The said Commissioner, Mysore had sought clarification from the Board whether the construction of Inter Modal Transit Centre ( IMTC) by the Karnataka State Transport Corporation, a building structure serving as bus terminal as well as housing commercial entities, was exempted or not, or whether the value attributable to the proportionate constructed area which is commercial in nature can be taken as the value for the purpose of leviability of service tax.
The Respondent then went on to rely on the Boards communication vide its letter F. No.137/93/2009-Cx.4 dated 07.01.2010 which clarified, inter-alia, that a single construction 13 for contract for construction of commercial complex as well as a transport terminal cannot be vivisected for the purpose of levy of service tax and went on to state that in the instant case M/s. Karnataka State Road Transport Corporation (which is primarily in the business of road transport) is constructing Inter Model Transit Centre and that it is doubtful whether a commercial complex would have been built by a transport corporation independently irrespective of the revenue that would be generated from its operations. We find the said clarification of the Board is more in favour of the Respondent than the appellant.
23. That apart, we find that the grounds of appeal has not chosen to controvert the findings of the adjudicating authority in any manner whatsoever. As can be seen from the findings of the adjudicating authority reproduced supra, they are extensive and detail with clarity the reasons in support of the findings rendered that the construction of TTMCs for BMTC by the Respondent falls within the exclusion category of the definition of the taxable service of Works Contract Service and hence the activity is not liable to service tax. We observe that no cogent reasons or basis, save for repetition of the allegations in the SCN, are given in the grounds that would impel us to overturn these lucid and reasoned findings of the adjudicating authority.
24. Upon delving into the appeal records, we also notice that admittedly, the show cause itself states that BMTC is a State Government Public Transport Service Undertaking and engaged in providing public transportation to the city and sub-urban population in and around Bangalore. It is also conceded in the SCN that as part of the development of urban infrastructure stated in the Comprehensive Traffic & Transportation Plan for Bangalore and vision plan under Jawaharlal Nehru National Urban Renewal Mission, M/s. BMTC Bangalore has started construction of the ' Traffic and Transit Management Centers' in different localities of Bangalore. The funding of the project too is entirely by the Government of India, Government of Karnataka and the 14 aforementioned State Government Public Transport Service Undertaking BMTC in the proportion of 35%, 15% and 50% respectively. In this background, BMTC has contracted the Respondent by way of agreement No.2/08-09 dated 23.07.2008 to construct the TTMCs as per the plan provided by BMTC. The fact that the construction of TTMCs attract the levy of VAT and accordingly the Respondent is discharging its sales tax liability is also not in dispute. It is also seen from the statements given by the Senior Manager (Accounts), General Manager (Finance) of the Respondent that they have not only expressed their bonafide belief that the said TTMCs are meant as bus terminals, bus depots and office space for providing passenger amenities, but also stated that they are constructing as per the plan and design provided by BMTC and that it is only subsequent to their construction activity nearing completion that BMTC had issued advertisement calling for expression of interest for renting the structures. We also note that the question posed to the General Manager ( Finance) that "Q 5. As per the provisions, prosecutions can be launched against the Company on account of wilful evasion and also the persons responsible for non payment of service tax and the person in charge for taxation matters. In your case Managing Director of the Company and you are the person responsible for non compliance to the provisions of law and therefore, it appears that you are liable for prosecution. Keeping these issues in view, can you tell me the services rendered by you attract the levy of service tax"
was met with a resolute reply that the services in question will not attract levy of service tax in view of the exemption to transport terminals and that the question of discharging service tax liability at this stage does not arise since the work as per their bonafide submissions and view point does not attract service tax at all since it is only for the development of transport infrastructure. We hold that such threats of prosecution at the stage of recording of statements when made are viewed seriously and invite adverse presumption regarding the voluntariness of the statement, rendering such statements irrelevant and inadmissible. Though, in the instant case the deponent appears to have been unfazed.15
Pertinently, even the statement of the Executive Engineer (Projects), M/s. BMTC corroborate the contentions of the statement of the Respondents' personnel, in that, the said Executive Engineer has also indicated that the area which is used for commercial purposes will be decided after completion of the project by the management.
25. Thus, evidently, when the agreement was entered, it was only for construction of TTMC, which for all purposes of the Respondent were bus Terminals/bus depots according to which the appellant has provided the works contract service. When BMTC itself has issued a notification only subsequently on 07.09.2010, inviting expression of interest while exploring options of operating and maintain the commercial space, that cannot be held to the detriment of the Respondent, as it cannot be attributed with the prescience to know what the service recipient, namely, BMTC, is intending to do with the structure it was contracted to construct. Incidentally, the said notification also reflects that BMTC itself has held out that the essential character of the TTMC is that of a Bus Terminal and Bus Depot to provide all facilities/services to the travelling public under a single roof and such portrayal by BMTC also independently corroborates the Respondent's contention that it was under the belief that it is being contracted to construct a bus terminal.
26. Unlike an exemption notification with conditions stipulated therein to claim the exemption, the benefit of which when claimed, puts the burden of proof on the claimant to satisfy firstly that it comes within the ambit of the exemption notification and then to satisfy that it had fulfilled the conditions stipulated therein to secure the benefits; there are no such requirements when the appellant contests taxability, on a belief stemming from the very statutory definition provided for "works contract service" in the Finance Act, 1994. On issues of taxability, to bring the prospective assessee within the ambit of the levy, the burden of proof is always on the revenue and that cannot be shifted onto the assessee. It is necessary to note the fundamental distinction between burden of 16 proof and onus of proof. The burden of proof lies with the person who has to prove a fact and it never shifts, but the onus of proof shifts. Onus means the duty of adducing evidence. Thus, if the Revenue seeks to tax the assessee under " Works Contract Service" and particularly deny the exclusion provided in the definition, then the burden of proof is on the Revenue to show that firstly, the law permits the Department to oust the assessee from the ambit of such exclusion by letting in evidence that the construction which the assessee has undertaken is not that of a Transport Terminal but of a building primarily for the purposes of commerce or industry, and if the law so permits, then secondly to let in such evidence. Once the Revenue is able to discharge its burden of proof, then if the assessee is contesting the taxability, the onus shifts on to the assessee to prove that it is not so. In the instant case when the appellant is under a belief that it is not within the ambit of the taxable service due to the exclusion in the definition, unlike an exemption notification which has mandated conditions which the appellant would have the burden to prove that it has fulfilled, the burden of proof on the appellant is only to show wherefrom such belief has stemmed. Once the appellant discharges its burden of proof in this regard, then the onus would shift on the Revenue to prove that the belief of the appellant is incorrect.
27. Therefore, when an assessee is under a belief that it does not come within the ambit of a definition of taxable service indicated in the statute, it only need to be shown wherefrom such a belief emanates and in this case demonstrably, the very definition of works contract service provides for exclusion of works contract for the purposes of Transport Terminals and the Respondent cannot be faulted for the bonafide belief rooted in the very plain words as provided in the aforementioned definition of what constitutes 'Works Contract Service' and the exclusions therefrom as stated in the statute. That being the case, when Revenue is alleging that TTMC is not a transport terminal, it is for the Revenue to prove the same. It is a settled principle of law that the onus to prove 17 rests heavily on the person who is alleging it. We find that there is no evidence let in by the Revenue that the law itself empowers revenue to embark on such a methodology of determination of what constitutes a Transport Terminal, much less an evidence let in also to show that the approved plan for construction of TTMC would reflect that the building is primarily to be used for commerce or industry.
28. In any event, we find that the very definition of works contract as reproduced supra, inter-alia, excludes works contract in respect of Transport Terminals from its ambit as a taxable service. When the definition has provided for such exclusion, the legislature has neither provided a definition for the term 'Transport Terminal' nor provided any specifications, restrictions or caveats defining the contours of the said term. In the absence of any such boundaries, the term ' Transport Terminal' cannot be subjected to further dissection in terms of determining its essential character as is being sought to be done by the Revenue. Few settled principles of interpretation of law as laid down by the Honourable Apex Court in Chief Commissioner of Central Goods and Service Tax v. Safari Retreats Private Limited, 2024 (90) GSTL 3 (SC), worthy of recapitulation at this juncture are in paragraph 25 of the said Judgement, reproduced below:
"25. Regarding the interpretation of taxation statutes, the parties have relied on several decisions. The law laid down on this aspect is fairly well-settled. The principles governing the interpretation of the taxation statutes can be summarised as follows :
(a) A taxing statute must be read as it is with no additions and no subtractions on the grounds of legislative intendment or otherwise;
(b) If the language of a taxing provision is plain, the consequence of giving effect to it may lead to some absurd result is not a factor to be considered when interpreting the provisions. It is for the legislature to step in and remove the absurdity;
(c) While dealing with a taxing provision, the principle of strict interpretation should be applied;18
(d) If two interpretations of a statutory provision are possible, the Court ordinarily would interpret the provision in favour of a taxpayer and against the revenue;
(e) In interpreting a taxing statute, equitable considerations are entirely out of place;
(f) A taxing provision cannot be interpreted on any presumption or assumption;
(g) A taxing statute has to be interpreted in the light of what is clearly expressed. The Court cannot imply anything which is not expressed. Moreover, the Court cannot import provisions in the statute to supply any deficiency;
(h) There is nothing unjust in the taxpayer escaping if the letter of the law fails to catch him on account of the legislature's failure to express itself clearly;
(i) If literal interpretation is manifestly unjust, which produces a result not intended by the legislature, only in such a case can the Court modify the language;
(j) Equity and taxation are strangers. But if construction results in equity rather than injustice, such construction should be preferred;
(k) It is not a function of the Court in the fiscal arena to compel the Parliament to go further and do more;
(l) When a word used in a taxing statute is to be construed and has not been specifically defined, it should not be interpreted in accordance with its definition in another statute that does not deal with a cognate subject. It should be understood in its commercial sense. Unless defined in the statute itself, the words and expressions in a taxing statute have to be construed in the sense in which the persons dealing with them understand, that is, as per the trade understanding, commercial and technical practice and usage." (emphasis supplied)
29. Ergo, when the definition itself does not crimp or confine the exclusion provided to a works contract in respect of Transport Terminal and states that it is to be decided on the basis of area of usage allocated to commercial purpose vis-a vis that utilised for transportation facilities/activities, it is not in the realm or remit of Revenue to impose any such artificial norms to deny the exclusion. We are of the considered view that the mere fact that the TTMC contains commercial areas let out does not divest TTMC of its essential character of a transport terminal, sans any such 19 prescription in the statute. It is a settled principle in law that what is specifically kept out of a levy by the legislature cannot be subjected to tax by the revenue administration under another entry. It is also equally settled that what cannot be done directly cannot be done indirectly. The constitution bench decision of the Honourable Apex Court in Somaiya Organics v. State of Uttar Pradesh, 2001 (13) ELT 3 (SC) refers.
30. It is further seen that the reliance placed by the Respondent on the decision in B.G.Shirke Construction Technology Pvt Ltd v CCE & ST, Pune-III,2020 (43) GSTL 242 (Tri-Mumbai) is apposite, and bolsters our aforesaid view. The Tribunal in the said decision has considered a similar contract issued by BMTC to the appellant therein for constructing 'Traffic and Transit Management Centre' at Shantinagar under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and the relevant portions of the said decision are reproduced below:
"The issue for determination in this appeal is the scope available to the adjudicating authority for elaborating upon an expression in the definition of the 'taxable service' in Finance Act, 1994 with intent to recover tax by qualifying such expression. The impugned activity undertaken by M/s. B.G. Shirke Construction Technology Pvt. Ltd. is that of 'works contract' in pursuance of tenders invited by Bangalore Metropolitan Transport Corporation for constructing 'Traffic and Transit Management Centre' at Shantinagar under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). The answer can only be one and, that too, resoundingly in the negative as the constitutional prerogative accorded to the supreme legislature is beyond the scope of encroachment by tax administration. This is abundantly clear from the decision of the Hon'ble Supreme Court in Commissioner of Sales Tax, Uttar Pradesh v. The Modi Sugar Mills Ltd. [AIR 1961 SC 1047//1961 SCR (2) 189] '10.......... In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The Court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed it. Cannot imply anything which is not 20 expressed it cannot import provisions in the statutes so as to supply any assumed deficiency.' To paraphrase an old aphorism, which is sauce for the gander is also sauce for the gosling. It is, therefore, appropriate to ascertain the circumstances that prompted the adjudicating authority to embark upon such a venture.
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4. The contract was awarded to the appellant on 30th July, 2009 for a total outlay of ` 1,07,21,63,815, as one of the many such across the city of Benguluru, and the demand pertains to the period up to August, 2011. The project was conceived for generating built-up space of 67862 m2 on a site area admeasuring 31862 m2; of the constructed space, the operational area for bus handling was to be 1145 m2, with the Corporation to occupy 10130 m 2 and the rest, admeasuring 56587 m2, to be leased out. Learned Authorised Representative pointed out that, according to the adjudicating authority, the substantial utilisation for commercial occupancy sufficed to bring the activity within the compass of '(b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry;' in Section 65(105)(zzzza) and that the expression 'transport terminal' should be read in conjunction with the other activities that were similarly excluded from tax. Even the submission of the noticee that the parking area of 22662 m2, if added to the built-up space occupied by the Corporation, would reduce the proportion of space intended to be leased out was found to be unacceptable as the parking facility was held to be a separate project. It was also held that airports, which are acknowledgably exclusions, cannot be compared with the impugned project even if comprising of space occupied by commercial tenants as access to airports is limited only to passengers.
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7. The generic expression 'transport terminal' must be read in the context of its usage for servicing means of public transport. While 'airports' may have been enumerated separately in the exclusions within the taxable entry, it too is a transport terminal as the distinguishing characteristic of such facilities is connectivity, interface and buffer. It is for the last of these, viz., buffer for stepping up or stepping down to capacity of the next level of interface, that space is constructed to offer a bouquet of services and goods to passengers 21 during the waiting time. Therefore, the utilisation of built-up space by commercial entities does not detract from the essential purpose of such terminals and, traditionally, every bus terminal has outlets serving the passengers. In the absence of legislative intent or legislative delegation, an artificial delineation of space, at the discretion of tax authorities, is not acceptable. It is also specious to argue that absence or limits of security restrictions, unlike that elaborately designed, for obvious reasons at airports, should disentitle bus terminal from application as exclusion. Thus, 'terminals', such as the one impugned before us, are, in the absence of express legislative intent to limit application on the basis of scale of use or scale of access, within the ambit of exclusion from tax.
8. In view of the above, we find that the demand in the impugned order fails the test of law and must be set aside. The appeal is allowed"
31. Ld. A.R has attempted to distinguish the said decision by stating that the contract was not considered therein. On a perusal of the said decision, we notice to the contrary. It is seen that the Tribunal notices the details of the contract in para 4 therein.
32. We are also not impressed by the vehement and vociferous submissions of the Ld. Authorised Representative on the perceived difference in the meaning of Transport Terminal and Traffic and Transit Management Centre (TTMC) premised on the nomenclatures. The reason being, even without evidence of their provenance by any authoritative citation/dictionary, the incontrovertible fact remains that neither the SCN, nor the grounds of appeal, contain any such differentiation or even any attempt at such differentiation. Again, the contentions of the Ld. A.R. regarding the perceived likeliness of the commercial/industrial components to a "commercial complex"
attracting tax under Section 65 (105) (zzq) (commercial or industrial construction) or (zzzh) (Construction of complex) advanced so as to deny the "transport terminal" character to the TTMC, are propositions that do not find any place in the proceedings below or in the grounds of appeal as preferred by the Revenue. Absent any such proposals in the SCN or such a contention raised in the grounds of appeal, premised on such 22 comparisons, Ld. Authorised Representative cannot argue beyond the case made out in the SCN or raised in the grounds urged in appeal, as that would be exceeding his remit. It is a settled principle of law that Revenue cannot argue in Court a case not made out in its show cause notice. CCE Bhubaneshwar-I v. Champdany Industries Ltd, 2009 (241) ELT 481 (SC) refers.
33. We also note that the SCN has alleged that despite the issuance of a notification by BMTC inviting expression of interest to utilize the TTMC premises for commercial purposes which was published in the leading newspapers and wide publicity given, the Respondent chose not to pay the service tax and this appears to show wilful misconduct and intention to evade the payment of service tax. It is also alleged that nonpayment of service tax and non-disclosure of details to the department also shows the intention to evade the payment of service tax. We find that the said allegations are devoid of substance. The records show that the statements of the personnel of the Respondent are exculpatory and they have stated their bonafide belief that TTMC being a bus terminal, was considered to be exempt from service tax liability. That being so, when their bonafide belief has not been dislodged/disproved, the allegation of non-disclosure of details by the Respondent, merits rejection. That apart, the Respondent has specifically contended in its reply that they were duly audited by the Internal Audit branch of the Department as well as CAG audit team from time to time. It has also been stated that all the payments were duly reflected in the ST 3 returns submitted to the department from time to time, as the value of services received for exempted services. Consequently, it was for the Department to make enquiries as to the nature of exempted services. Given that when the Revenue alleges suppression, the burden vests heavily on it to prove malafides, as per the law laid down by the Apex Court in the decision in Uniworth Textiles Ltd v CCE, Nagpur, 2013 (288) ELT 161 (SC). In the absence of any positive act of suppression or wilful misstatement with intent to evade payment of duty that is shown as indulged in by the 23 Respondent, we find the invoking of the extended period of limitation was, in any event, untenable.
34. In view of our aforesaid discussion and analysis above as well as in the light of the coordinate bench decision in B.G. Shirke's case cited supra, we do not find any palpable error in the order in original impugned. On the contrary, the adjudicating authority has passed a well-reasoned order that warrants no interference.
35. Before parting, we would like to observe that while the zest in presentation displayed by the learned Authorised Representative undoubtedly is appreciable and which we do appreciate, the zeal ought not to go overboard. We note that, on an earlier occasion, this Tribunal, speaking through one of us ( Shri. M. Ajit Kumar), in the case of M/s. Float Glass Centre v Commissioner of Customs, by Final Order Nos.40870-40987/2025 dated 02.09.2025, was constrained to observe as under:
"Before parting it must be said that the role of the Departmental Representative is not merely to represent revenue, but to maintain fairness and impartiality in discharging his duties as an officer of the Court and help in the administration of justice. The Hon'ble Apex Courts observations in the case of Public Prosecutors would also be applicable to them. The Apex Court in Captain Amarinder Singh Vs. Prakash Singh Badal [(2009) 6 SCC 260] held:
"We are also of the opinion that the public prosecutor cannot act on the dictates of the State Government, he has to act objectively as he is also an Officer of the Court."
36. Once the Tribunal has indicated its view and expressed that the submissions are not in line with the grounds raised, learned authorised representative should then desist from advancing further submissions by returning to repetition of the same, albeit couched differently. The Tribunal is conscious that its decisions are to be rendered only after due and proper consideration and is at all times cognizant of the arguments addressed before it. Persistence in pressing submissions after the Tribunal has expressed its inclination, serves no constructive purpose and is 24 incompatible with the decorous conduct of proceedings. It is incumbent upon the learned AR to strike an appropriate balance between his duty to the Revenue, and his duty to the Tribunal. We do not intend to pour cold water over the enthusiasm of the Ld. Authorised Representative, and are disinclined to castigate. Nevertheless, we emphasize that our observations ought to serve as a timely cautionary reminder that a course correction is warranted. The Ld. A.R. would be well advised to forthwith bear in mind that the enthusiasm to strenuously defend the cause of Revenue should not overtake prudence, and ought to be tempered with a willingness to imbibe the views being expressed by the bench. Submissions that are in excess of the brief, as well as needless semantics, ought to be eschewed as they invariably entail loss of precious time that could otherwise be productively utilized. The smooth administration of justice is best secured when the Bench and the representatives of the rival parties before the Tribunal act in concert, guided by mutual respect and adherence to the best traditions befitting the Tribunal. We hope and trust that these observations, that we are impelled to make to ensure conducive conduct during hearings, will henceforth be heeded.
In sum, the appeal preferred by the Revenue is rejected as devoid of merits.
(Order pronounced in open court on 10.11.2025)
(AJAYAN T.V.) (M. AJIT KUMAR)
Member (Judicial) Member (Technical)
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