Custom, Excise & Service Tax Tribunal
Sai Shakthi Infratech Ltd vs Rangareddy - G S T on 23 July, 2025
(1) Appeal No. ST/20870/2014
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
HYDERABAD
REGIONAL BENCH - COURT NO. - I
Service Tax Appeal No. 20870 of 2014
(Arising out of Order-in-Appeal No.23/2014(H-IV) S.Tax dated 24.01.2014 passed by
Commissioner of Customs, Central Excise & Service Tax (Appeals-II), Hyderabad)
M/s Sai Shakthi Infratech Ltd., .. APPELLANT
Plot No. 107, Prashanthi Nagar,
Near I.E. Kukatpally,
Hyderabad,
Telangana - 500 072.
VERSUS
Pr. Commissioner, CGST .. RESPONDENT
Rangareddy - GST H.NO. 1-98-7-43, VIP Hills, Jaihind Enclave, Madhapur, Tilak Road, Ramkoti, Hyderabad, Telangana - 500 081.
APPEARANCE:
Shri B. Venugopal & Shri P. Sai Makarand, Advocates for the Appellant. Shri B. Sangameshwar Rao, AR for the Respondent. CORAM: HON'BLE Mr. A.K. JYOTISHI, MEMBER (TECHNICAL) HON'BLE Mr. ANGAD PRASAD, MEMBER (JUDICIAL) FINAL ORDER No. A/30257/2025 Date of Hearing:23.07.2025 Date of Decision:23.07.2025 [ORDER PER: A.K. JYOTISHI] M/s Sai Shakthi Infratech Ltd., (hereinafter referred to as appellant) are in appeal against the Order-in-Appeal dated 24.01.2014 whereby a demand of Rs. 12,05,409/- was upheld along with penalty and interest (impugned order).
2. The issue, in brief, is that the appellants are engaged in providing Works Contract Services (WCS). Department after examining the work order felt that the said service would be more appropriately classifiable as site formation service and not under the WCS. Accordingly, the demand was raised in relation to two separate work orders treating both of them as not falling under the WCS.
(2) Appeal No. ST/20870/2014
3. Learned Advocate has mainly contested that it is apparent from the work order placed on them by M/s Lanco Industries Ltd., that the scope of work also includes appropriation of material also and is not a simple site formation service, as alleged by the Department. He invites attention to the scope of the work at (i) where the scope for work by them for Phase-1 and Phase-2 has been discussed. He has fairly conceded that they had only completed Phase-1 and had not undertaken Phase-2 of the said contract. Similarly, he invites attention to another work order placed by M/s Lanco Industries Ltd., dated 02.01.2010, where also, certain works were allotted to them. He has fairly conceded that in so far as this work order is concerned, they would not fall under WCS and have infact paid the differential service tax and have also paid the penalty @ 25% of the said service tax. Therefore, they are not contesting this issue any further.
4. Learned AR reiterates the findings in the impugned order.
5. Heard both the sides and perused the records.
6. The short question for determination is whether in view of the work order dated 30.06.2008, the work carried out by the appellant was in the nature of WCS or Site Formation and Clearing Service (SFCS). We have gone through the scope of work, which is as under:
Phase-I: Scope of work includes clearing of bushes, filling of pits, digging of trenches, fencing of entire boundary of the site by laying concrete poles with cement concrete basements of 2' x 2' size at the interval of every two meters and laying double layer of barbed wire, etc. Phase-II: Laying of roads, erection of electrical poles, construction of drains, construction of temporary shed for workmen.
(3) Appeal No. ST/20870/2014 Therefore, it is obvious that it is not only confined to cleaning of bushes, site leveling etc., but it also includes fencing of the entire boundary of the site by laying concrete poles with cement concrete basement of 2'x2' size at an interval of 2 meters and laying double layer of barbed wire. A plain reading of the scope would obviously indicate that this is in the nature of composite contract wherein certain parts of the work also involves material portion. It is not the case of the Department that these materials were not used by the appellant in the execution of the said work order. Therefore, we find that the work executed by them pursuant to this work order was in the nature of WCS and therefore the service provided was in the nature of WCS. Admittedly, they had been paying the applicable service tax under the category of WCS. Thus, the differential demand in so far as this work order is concerned would not sustain and the impugned order to that extent is set aside.
7. In so far as the demand vis-à-vis work order dated 02.01.2010 discussed supra, since the appellants are not contesting in the given factual matrix, we hold that the Commissioner (Appels) has rightly held that the work order does not fall under the category of WCS. Therefore, to that extent, the order of the Commissioner (Appeals) is upheld.
8. Appeal allowed partly, with consequential relief, if any, as per law.
(Dictated and pronounced in open court) (A.K. JYOTISHI) MEMBER (TECHNICAL) (ANGAD PRASAD) MEMBER (JUDICIAL) jaya