Nandji Mishra Vs Commissioner of Central Excise (CESTAT Chandigarh)
Facts – Nandji Mishra, the appellant assessee was a contractor to the Government Departments and is engaged in providing services relating to the construction and maintenance of roads, buildings, and bridges. The assessee appealed against the order passed by the Commissioner for confirming the service tax demanded along with interest and imposed penalties as the Service Tax on “Management, Maintenance or Repair Service” related to non-commercial Government buildings had been exempted by insertion of Section 98 of Finance Act, 1994, through Finance Bills, 2012 and therefore, services rendered to Government buildings such as Government Residential Quarters was liable to be set aside for the entire period of the dispute. Whereas the other side firmly contented that the services rendered by the assessee to Government Departments were taxable in the category of “Commercial or Industrial Construction Service”, “Management, Maintenance or Repair Service”, Manpower Recruitment or Supply Agency Service” and “Supply of Tangible Goods”. The assessee failed to provide copies of the contract, which could have enabled to classify of the exact nature/ category of taxable services.
Conclusion- Held that it has been mentioned in the show-cause notice that majority of services provided by the Noticee fall under the category of Management, Maintenance or Repair Services; that as such in all the cases where the Noticee has failed to provide copies of contract, which could have been enabled to classify the exact nature/ category of taxable services, the same have been classified under the category of Management, Maintenance or Repair Services; that however, classification of service can be re-determined in adjudication proceedings based on copies of contract details etc. if provided by the Noticee in adjudication proceedings. The appeal was allowed by way of remand. It was directed that the Adjudicating Authority may decide the matter within sixteen weeks of receipt of this order, as far as it may be practicable, taking into account the observations as above and the submissions of the appellant. The appellants were directed to cooperate with the Adjudicating Authority.
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
Shri Nandji Mishra, the appellant, is a Contractor to the Government Departments and is engaged in providing services relating to construction and maintenance of roads, buildings and bridges; the appellant was issued a show-cause notice dated 20.10.2010 demanding Service Tax of Rs.64,98,510/-, for the period 2005-2010 for the services rendered by them; Adjudicating Authority vide OIO dated 02.09.2011 confirmed the duty demanded along with interest and imposed penalties. The appellants are before this Bench contesting the allegations of the Department that the services rendered by them to Government Departments were taxable in the category of “Commercial or Industrial Construction Service”, “Management, Maintenance or Repair Service”, Manpower Recruitment or Supply Agency Service” and “Supply of Tangible Goods”.
2. Shri R.K. Hasija, assisted by Shri ShivangPuri, learned Counsel appearing for the appellants submits, as far as the demand on “Management, Maintenance or Repair Service” is concerned, that the same is exempted for roads by Notification No.24/2009 dated 27.07.2009; for the period prior to this, Section 97 was introduced vide Finance Bill, 2012 to exempt the service of maintenance, repair of roads for the period 16th June, 2005 to 26th July, 2009 and therefore, the demand on this count, which forms the major portion of the total demand, is liable to be set aside.
3. Coming to the demand of Service Tax on “Management, Maintenance or Repair Service” related to non-commercial Government buildings, he submits that the same has been exempted by insertion of Section 98 of Finance Act, 1994, through Finance Bills, 2012 and therefore, services rendered to Government buildings such as SDM Office, Government Schools, Government Residential Quarters etc. is liable to be set aside for the entire period of dispute.
4. On the demand of Service Tax on construction of Government parking lots and public parks, he submits that the maintenance of parking lots and parks is incidental to the functioning of the Government and is for non-commercial purpose; Circular No. 80/10/2004-ST dated 17.09.2004 already clarified that the leviability of Service Tax would depend on primarily whether the building or civil structure “is used or to be used” for commerce or industry; therefore, the activity undertaken by the appellant resulting in a non-commercial activity, they are not liable to pay Service Tax; he relies on B.G. Shirke Construction Technology Limited- 2014 (33) STR 77 and submits that even if some amounts are charged for parking, they do not become buildings for commercial use; he submits that, moreover, the show-cause notice is issued for “Commercial and Industrial Construction Service”, it is no open to the Revenue to confirm tax on any other category; the show-cause notice is liable to be dropped as held in URC Construction (P) Ltd.- 2017 ()50 STR 147 (Tri. Chennai) and National Building Construction Corporation Ltd.-2022 (66) GSTL 476 (Tri. Kolkata). He submits that Composite Services are classifiable under Taxable Category of Works Contracts Service as held in the following cases:
