Hari Construction & Associates Private Limited Vs Commissioner of CGST & Excise (CESTAT Kolkata)
Summary: The appellant, Hari Construction & Associates Private Limited, was engaged in construction of railway sidings under work orders awarded by M/s Rites Limited. During 01.04.2012 to 31.03.2016, it constructed railway tracks and railway sidings for NTPC, Bihar State Power Generation Company Limited (BSPGCL), Kanti Bijli Utpadan Nigam Limited (KBUNL), Barawni Thermal Power Station (BTPS) and SAIL. The activity was treated by the Revenue as “Works Contract Service” and a service tax demand, along with interest and penalty, was raised under the Finance Act, 1994.
For the post-01.07.2012 period, the activity was considered in the context of Section 65B(54) of the Finance Act, 1994 and Clause 14(a) of Notification No.25/2012-ST dated 20.06.2012. The appellant contended that construction of railways was exempt irrespective of whether the railway was used by a Government or private entity. For the pre-01.07.2012 period, the appellant relied upon Notification No.17/2005-ST dated 07.06.2005. TaxGuru has published the relevant works contract provision and Notification No.17/2005-ST.
The Revenue opposed the claim, submitting that the issue was whether railways used by a private party could qualify for the exemption under the cited notifications. The adjudicating authority confirmed the service tax demand, leading the appellant to approach the CESTAT.
