Custom, Excise & Service Tax Tribunal
M/S Shailja Construction vs Cgst & Ce Agra on 20 February, 2026
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Service Tax Appeal No.70031 of 2026
(Arising out of Order-In-Appeal No. 335-ST-APPL-LKO-2025, dated -
29/09/2025 passed by Commissioner (Appeals) CGST & Central Excise,
Lucknow)
M/s Shailja Construction .....Appellant
(Bank Colony, New Abadi Premier Nagar,
Aligarh, Uttar Pradesh 202001)
VERSUS
Commissioner, CGST & Central Excise, Agra ....Respondent
(113/4 Sanjay Place, Agra, Uttar Pradesh 282002) APPEARANCE:
Shri Raj Kumar, F.C.A. for the Appellant Smt. Chitra Srivastava, Authorized Representative for the Respondent CORAM: HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) FINAL ORDER NO.-70044/2026 DATE OF HEARING : 12.02.2026 DATE OF DECISION : 20.02.2026 P. K. CHOUDHARY:
The present appeal has been filed by the Appellant assailing the Order-In-Appeal No. 335-ST-APPL-LKO-2025, dated
-29/09/2025 passed by Commissioner (Appeals), Customs, CGST & Central Excise, Lucknow.
2. Briefly stated, the facts of the case are that the Appellant M/s Shailja Construction is a partnership concern engaged in providing construction services of Road and Canal to Government and Local Authorities.
2 Service Tax Appeal No.70031 of 2026
3. The Appellant were under a bona fide belief that the services provided by them were exempted from the levy of Service Tax under Serial No.13(a) & 12(d) of Notification No.25/2012-ST dated 20.06.2012 respectively and thus, they neither obtained registration under the Finance Act, 1994 nor charged any Service Tax in their invoices.
4. On the basis of third party data received from the Income Tax Department, under the data sharing protocol, a Show Cause Notice1 dated 28.04.2021 was issued to the Appellant alleging that they had rendered taxable services during the Financial Year 2015-16 to 2016-17 and have not paid the applicable Service Tax as per the Table below:-
Year Gross Income Rate of S.Tax payable Service Tax Difference i.e. received as per data Service Tax paid by the Service tax short received from other noticee (as paid by the noticee sources per ST-3) 1 2 3 4 5 6 2015-16 3,03,21,360/- 14.5% 43,96,597/- 0 43,96,597/- 2016-17 3,59,03,464/- 15% 53,85,520/- 0 53,85,520/- TOTAL 6,62,24,824/- 97,82,117/- 0 97,82,117/-
5. The Adjudicating Authority vide the Order-In-Original dated 15.05.2024 observed as under:-
"06.3 The Noticee vide written submissions made on 24.11.2021 defended the allegations made against them in the impugned notice submitting that Noticee has done the government work i.e. for road construction work and canal construction work related to infrastructure works for public utility. These services covered under Negative List under Service Tax Act.
C6.4 The noticee vide their letter dated 24.11.2021 provided the copies of Balance sheet, form 26AS, & contract agreement for the financial year 2015-16 & 2016-17.
1SCN 3 Service Tax Appeal No.70031 of 2026 06.5 The details of receipt in 26AS in the F.Y. 2015-16 & 2016-17 under the head of 194C are as under;
Sr.No. Name of the F.Y. 2015-16 F.Y. 2016-17
Department Amount Amount
1 Irrigation division, Agra 1056131/- 980257
2 Ex Engi Madhya Ganga 157086/- 66268
Canal Aligarh
3: Upper Div Agra Canal 198680/- NA
Agra
4 Head Works Division x 19196123/- NA
Agra Canal Okhla New
Delhi 25
5 Kanpur Division Lower 3358640/- NA
Ganga Canai
6 Rampur Canal Division 6354700/- 1588224/-
7 Ex Engi Main Branch NA 19679/-
Div Garga Canal Mtr
Agra
8 Ex Engni Sichai Nirman NA 376914/-
Khand Shikokhabad
9 Irrigation Division NA 39458/-
Hathras
10 Head Works Division NA 32832664/-
Agra Canal Okhla New
Delhi
Total Amount 3,03,21,360/- 3,59,03,464
6.6 Further the details of work orders provide by the notice as under:-
Work Order Details F.Y. 2015-16 Sr.No Name of the Nature of the Work Work Order NO. Dated/ Amount Department Period
1. सहायक अभियन्ता गंगा सीवर सफाई कायय सी-07/ अनब ु ंध संख्या 25.05.2015 98088/-
नहर अलीगढ 03/सा. आ 4/
2. Strenthing bank of 08/AE-II/2015-16 24.06.2015 1,08,716/-
jalejar bandh
3. Strenthing bank of 01/AE-II/2015-16 16.06.2015 1,98,857
jalejar bandh
4 सहायक अभियन्ता नहर जंगल सफाई का कायय 17/AE-II/2015-16 10.11.2015 174368
खंड रामपुर
5 सहायक अभियन्ता नहर कतर बनाना का कायय 03/ सा. आ/2015-16 16.06.2015 7412058
खंड रामपरु
6 रामपुर नहर खंड वाद सुरक्षा का कायय 15/EE/2015-16 01.11.2015 3407700
Total 1,13,99,787/-
Sr. Name of the Department Nature of Work Order Dated/Period Amount
No. the Work NO.
1. Div. Account Construction 25/SE/2016- 12.08.2016 18288400
Officer Head works Dn Agra of service 17
Canal, Okhla New Delhi-25 road
2. Restoration 124/EE/2016- 30.08.2016 3714500 of yamnotri 17 premises
3. रामपरु नहर खंड वाद सरु क्षा का 34/सा. आ 24.08.2016 148575 4 Service Tax Appeal No.70031 of 2026 कायय /2015-16 4 सहायक अभियन्ता रामपरु ननमायण कायय 06/AE IV/16- 03.05.2016 65400 17 TOTAL 2,22,16,875/-
Sr.No Name of the Department Nature of the Work Order Dated/Period Amount Work NO.
1. अधीक्षण अभियंता कानपुर ननमायण कायय 08/S.E./2014 20.12.2014 59,85,536 2 Div. Account Officer Head works Dn Construction of 54/SE-III/2014- 28.02.2015 33141591 Agra Canal, Okhla New Delhi-25 road 15 3 अधीक्षण अभियंता भसंचाई कायय आगरा क्योपें का ननमायण 05/S.E.- 06.05.2014 4178775 3/2014-15 कायय Total Amount 43305902/-
(TABLE) 06.7 On perusal of the work orders received in the F.Y. 2014-15, 2015-16 & 2015-17, provided by the noticee, it is observed that the noticee had received total work orders for amounting to Rs. 7,67,15,760/- from various department, as referred in above tables, against work related to construction and renovation of road and canal related work. However, in the F.Y. 2015-16 & 2016-17, as per the form 26AS, the noticee have received total consideration amounting to Rs. 6,62,24,824/- from Irrigation division, Agra, Ex Engi Madhya Ganga Canal Aligarh, Upper Div Agra Canal Agra, Head Works Division Agra Canal Okhla New Delhi 25, Kanpur Division Lower Ganga Canal, Rampur Canal Division, Ex Engi Main Branch Div Ganga Canal Mtr Agra, Ex Engni Sichai Nirman Khand Shikokhabad, Irrigation Division Hathras & Head Works Division Agra Canal Okhla New Delhi against work related to construction of road & work related to canal, Further, it is observed that the noticee have not provided copy of farm 26AS for the F.Y. 2014-15, however, they have provided work order related to F.Y. 2014-15 from अधीक्षण अभियंता कानपूर, Div. Account Officer Head works Agra Canal, Okhla New Delhi-25 & अधीक्षण अभियंता भसचाई कायय आगरा against work related to against work related to construction of road & work related 5 Service Tax Appeal No.70031 of 2026 to canal. Now, it is observed that the instant show Causa Notice has been issued for the F.7. 2015-16 & 2016-17. So, I have to take up the receipts for 2015-16 & 2016-17 only, which have been shown by the Noticee in their ITR as well as reflecting in their Form 26AS. Further, the noticee has submitted neither any bifurcation/reconciliation of work orders nor any payment certificates issued from the respective department on the basis of which the receipts in the impugned years can be co-related with the specific work orders. Therefore, I am of the view that only those work orders which have been executed by the Noticee during 2015-16 & 2016-17 are liable to be considered against the impugned amount. Thus, it is concluded that the amount of Rs. 3,36,16,662/- (Rs. 1,13,99,787/- in the F.Y. 2015-16 & Rs. 2,22,16,875/ in the F.Y. 2016-17), against which work order have been executed in the financial year 2015-16 & 2016-17, are admittable against the demanded amount. And as all these work orders are related to construction of road & work related to canal which is exempted from levy of service tax in view of the Point no. 12 & 13 of the Notification no. 25/2012-ST dated 20.06.2012. The content of the said entry is as under:
12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of -
(d) canal, dam or other irrigation works;
13. Services provided by way of construction, erection, commissioning, installation, correlation, fitting out, repair, maintenance, renovation, or alteration of,-
(a) a road, bridge, tunnel, or terminal for road transportation for use by general public;
6 Service Tax Appeal No.70031 of 2026 In view of the above, demand of service tax on the receipt of Rs. 3,36,16,662/- is liable to be set aside and the rest receipt amounting to Rs.3,26,08,162/- (Rs. 6,62,24,824/- Rs. 3,36,16,662/-) is liable to be taxable.
07. Accordingly, the noticee is liable to pay due service tax on the receipt of Rs.1,89,21,573/- (Rs. 3,03,21,360/- Rs. 1,13,99,787/-), thus, service tax amounting to Rs.27,43,628/- (Rs.1,89,21,573/- 14.5%) is liable to be confirmed in the financial year 2015-16, further, the noticee is liable to pay due service tax on the receipt of Rs.1,36,86,589/- (Rs. 3,59,03,464/- Rs. 2,22,16,875/-), thus, service tax amounting to Rs.20,52,988/- (Rs. 1,36,86,589/- 15%) is liable to be confirmed in the financial year 2016-17. Thus, the noticee is liable to pay total due service tax amounting to Rs.47,96,616/- (Rs.27,43,628/- + R.20,52,988/-).
07.1 Hence, in view of the above, it is concluded that the demand of service tax amounting to Rs. 47,96,616/- is liable to be confirmed on the receipt of Rs.3,26,08,162/-for the financial year 2015-16 & 2016-17 and rest demand of service tax amounting to Rs. 49,85,501/- (Rs. 97,82,117/- Rs. 47,96,616/-) is liable to be dropped on the consideration amounting to Rs. 3,36,16,662/- for the financial year 2015- 16 & 2016-17 and demand of service tax."
6. Being aggrieved, the Appellant preferred appeal before the First Appellate Authority. However, the learned Commissioner (Appeals) chose not to interfere with the order of the Adjudicating Authority and upheld the same and dismissed the appeal. Hence, the present appeal before the Tribunal.
7. The learned Chartered Accountant appearing on behalf of the Appellant submitted that the impugned appellate order has 7 Service Tax Appeal No.70031 of 2026 been passed without considering the documents submitted in support of the appeal on mere finding "No reconciliation statement has been provided to indicate which of these documents were considered by the adjudicating authority or which were not." whereas the Appellant has submitted only those documents which were not considered by the Adjudication Authority related to the payment received in the year 2015-16 & 2016-17 against the work order executed with HWD Agra Canal, Okhla New Delhi vide WO No.54/SE-III/2014-15/ dated 28.02.2015 for Rs.3,31,41,591/- against which an amount of Rs. 3,36,08,162/- (Rs.1,89,21,573/- for 2015-16 and Rs.1,36,86,589/- for 2016-17) was disallowed by the adjudication authority, therefore, the impugned order is non- reasoned order, deserves to be set aside as passed in violation of principal of natural justice.
8. It is further submitted that the detailed reconciliation of the payment received during the year 2015-16 and 2016-17 as reflected in Form 26AS statement (TDS under Income Tax) against the said work order of HWD Agra Canal, Okhla New Delhi were submitted before the authorities below but all of them has not been considered and confirmed/upheld the demand of Service Tax of Rs.27,43,628/- for 2015-16 on the value of service of Rs.1,89,21,573/- and Rs.20,52,988/- for 2016-17 on the value of Services of Rs.1,36,86,589/- on hypothetical & arbitrary findings which is liable to be set aside.
9. It is also submitted that on records the entire case has been made on the basis of the value of receipts on which TDS u/s 194-C of the Income Tax Act has been deducted and the Services are exempted under Sr.No.13(a) of Mega Exemption Notification No. 25/2012-ST dated 20/06/2012 as reflected in Form 26AS, but authorities below failed to consider the payment received against the work order of HWD Agra Canal, Okhla New Delhi vide WO No.54/SE-III/2014-15/ dated 28.02.2015 for "
Construction of metalled road on left bank of Noida main drain"
8 Service Tax Appeal No.70031 of 2026 for Rs.3,31,41,591/- against which the payment is received as reflected as under but the said work order has not been considered mere on the finding that the same was executed in 2014-15 is not legal and justified:
Year Value as per Value Service Rate Service Tax Form 26AS confirmed statement 2015-16 1,91,96,123/- 1,89,21,573/- 14.5% 27,43,628/-
2016-17 3,28,32,664/- 1,36,86,589/- 15% 20,52,988/-
TOTAL 3,26,08,162/- 47,96,616/-
10.The learned Chartered Accountant further submitted that the above said order as executed with HWD Agra Canal, Okhla New Delhi vide WO No.54/SE-III/2014-15/ dated 28.02.2015 for "
Construction of metalled road on left bank of Noida main drain"
of the value of service Rs.3,31,41,591/- against which the payments received and duly reflected in Form 26AS statement for the F.Y. 2015-16 & 2016-17 are more than the demand confirmed for the value of service as mentioned in the Table-1 and arbitrarily confirmed the demand of service tax on the same on mere finding that "....said work order was executed in 2014-15 and instant show cause notice has been issued for the year 2015-16 & 2016-17. So I have to take up the receipts for 2015-16 & 2016-17 only..." .
11. It is also submitted that the aforesaid finding of the lower authorities in confirming and upholding the demand is neither legal nor justified, inasmuch as the entire proceedings have been initiated solely on the basis of the value of services received and reflected in Form 26AS statement for FY 2015-16 and FY 2016- 17, without examining whether such services were taxable or exempt, and without considering the actual year in which the relevant work orders were executed. Consequently, the demand of tax amounting to ₹47,96,616/- raised in respect of the work 9 Service Tax Appeal No.70031 of 2026 order executed during FY 2014-15 is unsustainable in law and on facts and is therefore liable to be set aside.
12. The Learned Chartered Accountant drew the attention of the Bench to the fact that the work order HWD Agra Canal, Okhla New Delhi vide WO No.54/SE-III/2014-15/ dated 28.02.2015 for " Construction of metalled road on left bank of Noida main drain" of the value of service Rs.3,31,41,591/- are unconditionally exempted vide Sr. No.13(a) of Mega exemption Notification No. 25/2012-ST dated 20/06/2012. Copy of Notification is enclosed.
13. Learned Departmental Representative has justified the impugned order and prayed that the appeal filed by the Appellant being devoid of any merits may be dismissed.
14. Heard both the sides and perused the appeal records.
15. I find that the Authorities below have admitted the fact that that Appellant has provided services of Road & Canal construction to Government and Local Authorities which were exempted from the levy of service tax under Sr. No. 13(a) and 12(d) of Notification No. 25/2012-ST dated 20.06.2012 respectively. The wordings of the services under the notification are as under:
"13. Service provided by way of construction, erection, commissioning, installation, fitting out. Repair, maintenance, renovation, or alteration of-
12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of -
10 Service Tax Appeal No.70031 of 2026
16. I find that entire demand of service tax has been made on the basis of Form 26AS statement under which TDS has been deducted u/s 194-C of the Income Tax Act on the payment received by the Appellant as released by the Govt. department for the exempted service against the work order executed for the relevant years and preceding years for which following is the reconciliation for the value of service and demand of service tax dropped & confirmed by the authorities below :
Table-1 Reconciliation of Value of Service Particulars Value of Value of Total Service-2015- Service 2016- 16 17 (A)Total Value of Services 3,03,21,360/- 3,59,03,464/- 6,62,24,824/- per 26 AS (B) Value of Services 1,13,99,787/- 2,22,16,875/- 3,36,16,662/-
Accepted and dropped the demand on it.
(C) Value of Service rejected 1,89,21,573/- 1,36,86,589/- 3,26,08,162/- and demand confirmed on it ST @ 14.5% ST@ 15% Demand ST (A-B) 27,43,628/- 20,52,998/- 47,96,616/-
Payment released by the 1,91,96,123/- 3,28,32,664/- 5,20,28,787/- Head Works Division, Agra Canal, Okhla, New Delhi -
25 as per 26-AS against their work order for the prior years 11 Service Tax Appeal No.70031 of 2026 Table-2 Reconciliation of Demand of Service Tax Particulars Demand of Demand of Total Service Tax Service Tax 2015-16 2016-17 (A)Total as per Show 43,96,597/- 53,85,520/- 97,82,117/- Cause Notice (B) Demand Dropped 16,52,969/- 33,32,532/- 49,85,501/-
(C) Demand Confirmed 27,43,628/- 20,52,998/- 47,96,616/- (A-B)
17. I also find that the Appellant has submitted all the above reconciliation to the authorities below along with the work order of Head Works Division, Agra Canal, Okhla, New Delhi - 25 against which, the payment have been received in the year 2015-16 and 2016-17 but they have not appreciated the same and confirmed the demand on the finding that the work order of the above said department is for the year 2014-15 and the impugned case is related to 2015-16 & 2016-17.
18. I find that the work order of HWD Agra Canal, Okhla New Delhi vide WO No.54/SE-III/2014-15/ dated 28.02.2015 for "
Construction of metalled road on left bank of Noida main drain" for Rs.3,31,41,591/- against which the payment is received more than the value of service on which demand is confirmed/uphold the demand of service tax on Rs.3,26,08,162/- in the impugned order, therefore, the demand of service tax on the same for Rs.47,96,616/- is liable to be set aside as services were exempted under Sr. No.13(a) of Mega exemption Notification No. 25/2012-ST dated 20/06/2012.
19. The authorities below have confirmed/upheld the demand merely on the basis of reconciliation of value of service received for the work orders prior to the impugned period but failed to substantiate & without examining whether such services were taxable or exempt, confirmed the demand of service tax for ₹47,96,616/- only on the basis of reconciliation of payment received as per Form 26AS statement.
12 Service Tax Appeal No.70031 of 2026
20. The impugned order and Order-In-Original suffers from various legal infirmities for which the same is liable to be set aside and the consequential demand of service tax for ₹ 47,96,616/- is also liable to be set aside, and I do so.
21. The demand including interest under Section 75, penalty under Section 77 for ₹20,000/-, and late fee under Rule 7C for ₹60,000/- are also unjustified and are accordingly set aside.
22. Further, I do not find any ingredient of suppression, willful misstatement etc. with an intent to evade payment of Service Tax, and accordingly, the penalty imposed under Section 78 of the Finance Act, 1994 is set aside.
23. Appeal is allowed in the above terms.
(Pronounced in open court on 20.02.2026) Sd/-
(P. K. CHOUDHARY) MEMBER (JUDICIAL) Nihal