Custom, Excise & Service Tax Tribunal
Commissioner, Central Excise & ... vs Rajendra Mittal Construction Company ... on 19 February, 2026
1
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI.
PRINCIPAL BENCH - COURT NO.III
E-Hearing
Service Tax Appeal No. 50773 of 2021 with Service
Tax Cross No.50516 of 2021
[Arising out of Order-in-Appeal No.28-29(SM)/ST/JPR/2021 dated
15.01.2021 passed by the Commissioner (Appeals), Central Excise & CGST,
Jaipur.]
Commissioner of Central Appellant
Excise & CGST,
Block A, Surya Nagar,
Alwar, Rajasthan-301 001.
VERSUS
M/s.Rajendra Mittal Construction Co. Respondent
Pvt. Ltd., 210-211, Optus Corporate Suites, Vasundhara Nagar, Bhiwadi, District-Alwar (Rajasthan)-301 019.
APPEARANCE:
Shri S.K. Meena, Authorised Representative for the Department. Shri Ajay Kumar Mishra, Advocate for the respondent.
CORAM:
HON'BLE MS. BINU TAMTA, MEMBER (JUDICIAL) HON'BLE MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) FINAL ORDER NO.50296/2026 DATE OF HEARING/DECISION: 19.02.2026.
BINU TAMTA:
1. Brief facts of the case are that the respondent is engaged in providing works contract service of civil construction for various Government departments/Universities/IITS/NITS. On scrutiny of records of the appellant by the Service Tax Department, it was 2 observed that the appellant in the capacity of "sub-contractor" had provided "Works Contract Service" in respect of construction of G+4 Building for extension of Electrical Department at National Institute of Technology (NIT), Patna and for construction of various types of buildings (Campus School, Community Centre and Houses etc.) at the Indian Institute of Technology (IIT), Mandi as per work awarded by the principal contractor, namely, M/s NBCC. NIT, Patna and IIT, Mandi had originally awarded work to NBCC vide MOU dated 23.07.2013 and 21.03.2014. The Appellant had not paid any service tax thereon on the belief that said services were exempted vide Entry at S.No.29(h) read with entry at S.No.12A of notification no.25/2012-ST dated 20.06.2012, since the recipients were Government Department/Governmental Authority. The Department, however, observed that NIT, Patna and IIT, Mandi were neither Government/local authority nor "governmental authority", hence, no exemption was available in respect of works contract service provided by the appellant to them. Show cause notices were issued to the appellants demanding service tax under Section 73(1) along with interest under Section 75 of Finance Act, 1994 and imposition of penalty under Section 76 of the Finance Act, 1994. On adjudication the demand of service tax was confirmed along with interest and penalty. The show Cause Notice dated 19.02.2019 and 28.03.2019 were adjudicated by the Additional Commissioner, CGST, Alwar vide common OIO dated 21.08.2019 confirming the demand of service tax along with interest and penalty.3
2. The appeals filed by the assessee was allowed by the Commissioner(Appeals) relying on the definition of „government authority‟ as defined under clause 2(s)of Notification No.25/2012- ST dated June 20, 2012, as amended vide notification No.2/2014- dated January 30, 2014 and also on the decision of the Patna High Court in the case of Shapoorji Pallonji and Company Private Ltd versus CC, C. EX.S.T., Patna1.
3. Heard both the sides and perused the records.
4. The learned Counsel for the respondent has also referred to the decision of the Apex Court confirming the decision of the Patna High Court. The learned Authorised Representative for the Department has very fairly conceded that the issue stands settled now by the Apex Court in favour of the appellant in Commissioner, Customs, Central Excise and Service Tax, Patna Vs. M/s. Shapoorji Pallonji and Company Pvt. Ltd. 2 dismissing the Revenue‟s appeal. While interpreting the definition of „government authority‟ as contained in Clause 2(s), the Court observed:-
"27. We are, therefore, of the opinion that the long line of clause 2(s) governs only sub-clause (ii) and not sub-clause
(i) because of the simple reason that the introduction of semicolon after sub- clause (i), followed by the word "or", has established it as an independent category, thereby making it distinct from sub-clause (ii). If the author wanted both these parts to be read together, there is no plausible reason as to why it did not use the word "and" and without the punctuation semicolon. While the Clarification Notification introduced an amended version of clause 2(s), the whole canvas was open for the author to define "governmental authority" whichever way it wished; however, "governmental authority" was re-defined with a purpose to make the clause workable in contra-distinction to the earlier definition. Therefore, we cannot overstep and interpret "or"
as "and" so as to allow the alternative outlined in clause 2(s) to vanish.
1 2016(42)STR 281(Pat.).
22023(79) GSTL 145 (SC), 4
28. Let us consider the problem from a different angle. The revised definition of "governmental authority" and the few punctuations in the definition (two semicolons and two commas) and the conjunction „or‟ have been noticed above. Literally read, the conjunction „or‟ between sub-clauses (i) and (ii) clearly divides the two clauses in two parts with the first part completely independent of the second part. The first part is by itself complete and capable of operating independently. A construction leading to an anomalous result has to be avoided and to so avoid, it has to be held that the long line of clause 2(s) starting with "with 90%" and ending with "Constitution" qualifies sub-clause (ii); and, if the conjunction „or‟ is to be read as „and‟, meaning thereby that the portion "with 90% ... Constitution" has to be read as qualifying both sub-clauses (i) and (ii), then the intention of re-defining "governmental authority" would certainly be defeated. As discussed earlier, the purpose for which "governmental authority" was re-defined must have been to make it workable. We cannot, therefore, resort to a construction that would allow subsistence of the unworkability factor. Assuming what Ms. Bagchi contended is right, it was incumbent for the appellants to bring to our notice, if not by way of pleading, but at least with reference to the relevant statutes, which of the particular authorities/boards/bodies are created by legislation - Central or State - "with 90% or more participation by way of equity or control by Government". Each word in the definition clause has to be given some meaning and merely because promoting educational aspects is one of the functions of a municipality in terms of Article 243W of the Constitution read with Schedule XII appended thereto is no valid argument unless equity or control by the Government, to the extent of 90%, is shown to exist qua the relevant authority/board/body. Incidentally, neither is there any indication in the petition nor has Ms. Bagchi been able to disclose the identity of any such authority/board/other body which is covered by her argument. No such identified authority/board/body covered by the aforesaid construction of the definition of "governmental authority" in clause 2(s) of the Clarification Notification, which the appellants appeal to us to accept, having been brought to our notice, we are unable to find any fault in the decisions of the Patna High Court and the Orissa High Court extending the benefit of the Exemption Notification to the educational institutions, and a fortiori, to SPCL."
55. As legal position is settled by the Apex Court, following the same, we do not find any reason to interfere with the impugned order, which is in conformity therewith. The appeal filed by the Revenue is, accordingly dismissed. Cross objection filed by the respondent stands disposed of.
[Operative portion of the order already pronounced in open court] (BINU TAMTA) Member (Judicial) (HEMAMBIKA R. PRIYA) Member (Technical) Ckp.