Yash Associates Vs Commissioner (CESTAT Allahabad)
Summary: The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad, in Yash Associates Vs Commissioner, CGST & Central Excise, Lucknow, considered the eligibility of works contract services relating to public road repair and renewal for exemption from service tax. The appellant, a proprietary concern of Shakuntala Yadav, had undertaken works for the Public Works Department, Lucknow, Government of Uttar Pradesh. Following receipt of third-party information from the Income Tax Department, the department initiated an inquiry for financial years 2014-15 to 2017-18 (up to June 2017). A show cause notice dated 11 November 2019 resulted in confirmation of service tax of Rs. 5,63,974, applicable interest, an equivalent penalty under Section 78 of the Finance Act, 1994, and penalties of Rs. 10,000 each under Sections 77(1)(c) and 77(1)(d). A separate demand of Rs. 27,83,571 was dropped.
The dispute concerned receipts of Rs. 45,62,894 during financial year 2014-15. The Commissioner (Appeals) rejected the appellant’s exemption claim after examining a PWD work order dated 28 April 2015 relating to financial year 2015-16, finding that it did not substantiate receipts in the earlier year. The appellant maintained that the disputed receipts arose from two separate PWD work orders for repair and renewal of public roads, supported by payment vouchers dated 24 March 2015 and 31 March 2015. The appellant also relied on Form 26AS statements to establish that the amounts had been received from the Government department in financial year 2014-15.
The Tribunal found that the disputed amount had been received in full by 31 March 2015 and related to public road repair and renewal undertaken for PWD Lucknow. It held that such services were covered by Entry No. 13(a) of Notification No. 25/2012-ST dated 20 June 2012, which exempted construction, repair, maintenance, renovation and alteration of roads, bridges, tunnels or terminals for public use. The Tribunal observed that the first appellate authority had examined a work order pertaining to a different financial year, while the relevant receipts were identifiable from the appellant’s Form 26AS and the work order details placed on record.
Accordingly, the Tribunal held that the appellant was not liable to pay service tax on the public road repair and renewal works. It set aside the impugned order and allowed the appeal with consequential relief. The decision confirms the applicability of the exemption to qualifying public road works undertaken for a government department.
FULL TEXT OF THE ORIGINAL JUDGMENT/ORDER
The present appeal has been filed by the Appellant assailing the Order-In-Appeal No. 35-ST-APPL-LKO-2022, dated 25.01.2022 passed by Commissioner (Appeals) CGST & Central Excise, Lucknow.
2. By the impugned order, the learned Commissioner (Appeals) has rejected the appeal filed by the Appellant before him by upholding the Order-In-Original.
3. The facts of the case in brief are that the Appellant M/s Yash Associates (Proprietor: Shakuntala Yadav) is engaged in providing ‘Works Contract Services’ and is duly registered with the Service Tax Department. The Show Cause Notice 1dated 11.11.2019 was issued on the basis of the third party information received from the Income Tax Department for the Financial Year 2014-15 and accordingly, inquiry was initiated to determine the Service Tax liability for the Financial Year 2014-15 to 2017-18 (upto June 2017). Reply to the SCN was filed. By the Order-In-Original dated 05.02.2021, demand of service tax amounting to Rs.5,63,974/- was confirmed alongwith the applicable interest and penalty of equal amount was imposed under Section 78 along with penalty of Rs.10,000/- each under Sections 77(1)(c) and 77(1)(d) of the Finance Act,1994 read with Sections 142,173 and 174 of the CGST Act, 2017. Service Tax demand of Rs.27,83,571/- was dropped. Being aggrieved, the Appellant-Assessee filed appeal before the First Appellate Authority and the learned Commissioner (Appeals) vide the impugned Order-In-Appeal, upheld the Order-In-Original and rejected the appeal before him. Hence, the present appeal before the Tribunal.
4. The learned Advocate appearing on behalf of the Appellant made the Bench go through the discussions and findings of the First Appellate Authority which is reproduced below for ready reference:-
“I have gone through the case records, grounds of appeal and submission made during the personal hearing. From the records I find that it is to be decided if the amount of Rs.45,62,894/- was received by the appellant from the Executive Engineer Construction, PWD against the exempt service?
The appellant submitted in their grounds of appeal that they enclosed a document namely “Issue of Notice to proceed with the work” along with other enclosures, viz. Bill of quantity and other documents issued by Office of the Superintending Engineer, Lucknow Circle PWD, Lucknow for Rs.54,18,912.50 to the appellant wherein the amount in question i.e. Rs.45,62,894/- is also included.
On perusal of this document, I find that this Work Order was awarded by office of the Superintending Engineer, Lucknow Circle, P.W.D. Lucknow in favour of the Appellant on 28.04.2015, wherein “Special Repair of Bijnaur-Parwar-Mati (ODR)” is mentioned as the name of the work, Rs.54,18,912.50 is mentioned as the estimated cost and 28.04.2015 is mentioned as the Date to start the work and 27.07.2015 is mentioned as the date of completion of the task. It is clear from this document that this Work order related to F.Y.2015-16 whereas receipt of Rs.45,62,894/- pertained to F.Y.2014-15. Further, I find that in Para 6.1(C) of the impugned order, the same work has already been considered by the original adjudicating authority for the F.Y.2015-16. In view of this, I am of the view that the appellant has no document pertaining to receipt of Rs.45,62,894/- in the F.Y.2014-15 and in the absence of any such Document/Contract/Work order, nature of service provided by them cannot be ascertained and the benefit of abatement as claimed by the appellant in terms of Rule 2A of Service Tax (Determination of Value) Rules, 2006 extended. Consequently, I find no infirmity in the O-I-O No. 30/AC/LKO-II/Yes Associates/20-21 dated 05.02.2021 passed by the original adjudicating authority.
In the light of above discussion, I reject the appeal of the appellant.”
5. It is the case of the Appellant-Assessee that the amount of Rs.45,62,894/- has been received by her for the Financial Year 2014-15. The detail of the work order and amount received is as under:-
| Sl. No. | Work Order No. and Date | Voucher No. and Date | Amount (in Rs.) |
|---|---|---|---|
| 1. | 81/EE Dated 22.01.2014 for repair of road issued by the PWD Dept. | 116 Dt. 24.03.2015 | 10,37,344/- |
| 2. | 68/EE Dated 21.03.2015 for renewal of road by the PWD Dept. | 214 Dt. 31.03.2015 | 35,25,550/- |
| TOTAL | 45,62,894/- |
6. The learned Advocate appearing on behalf of the Appellant-Assessee vehemently argued that the Work Orders referred supra relates to ‘Repair and Renewal of Public Road’ and the work order is allotted by the Construction Division of PWD Lucknow. It is his submission that the Appellant-Assessee has provided ‘Works Contract Services’ to the Construction Division of P.W.D. Lucknow, Government of Uttar Pradesh. It is also submitted that on going through Form 26AS statement for the Financial Year 2014-15 and 2015-16, it is quite evident that the Appellant-Assessee received the amount from the P.W.D. Department, Government of Uttar Pradesh which is instrumental in executing development work relating to construction/civil works.
7. The learned Advocate also submitted that the ‘Construction and Repair of Road’ has been exempted under Notification No.25/2012-ST dated 20.06.2012 vide Entry No.13 of the said Notification.
8. Learned Departmental Representative appearing on behalf of the Revenue justified the impugned order and prayed that the appeal filed by the Appellant, being devoid of any merits, may be dismissed.
9. Heard both the sides and perused the appeal records.
10. We find that it is not in dispute that the amount of Rs.45,62,894/- has been received by the Appellant for the F.Y. 2014-15 and the entire amount has been received by 31.03.2015 as per the details in Para 5 of this order since the entire amount received in consideration of the ‘Works Contract Services’ provided to the P.W.D. Lucknow. The services provided by the Appellant to P.W.D. Lucknow are exempt as per Entry No.13 of Notification No.25/2012-ST dated 20.06.2012. I find from the grounds of appeal filed by the Appellant before the Tribunal that the learned Commissioner (Appeals) has discussed the work order of P.W.D. Lucknow pertaining to F.Y. 2015-16 whereas the amount under dispute pertains to F.Y. 2014-15. The facts can be verified from the Form 26AS statements wherein the amount of Rs.45,62,894/- is reflected in the Form 26AS statement for the F.Y. 2014-15 which is part of the appeal paper books.
11. The Appellant has undertaken repair and renewal of public road and the relevant work was allotted by the Government i.e. Executive Engineer P.W.D. The construction and repair of road has been exempted under Notification No. 25/2012-ST dated 20.06.2012 vide Entry No. 13 of the said Notification. The relevant text is reproduced as under:-
“(13) Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,-
(a) a road, bridge, tunnel, or terminal for road transportation for use by general public;
(b) ……………………………………
(ba) ………………………………….
(bb) …………………………………
(c) ………………………………….
(d) …………………………………”
Hence the Appellant would not be liable for payment of Service Tax on the work relating to repair and renewal of the public road as the same is exempted under the above Notification.
12. In view of the above discussion the impugned order cannot be sustained and is accordingly set aside. The appeal filed by the Appellant is allowed with consequential relief, as per law.
(Pronounced in open court on 14.10.2026)
